Royal Dutch Shell November 9, 2016
Royal Dutch Shell plcNovember 9, 2016
Brazil Shareholder visit 2016Re-shaping Shellto create a world-class investment case
“Let’s make the future”
Royal Dutch Shell November 9, 2016 3
Definitions & cautionary note
Reserves: Our use of the term “reserves” in this presentation means SEC proved oil and gas reserves.
Resources: Our use of the term “resources” in this presentation includes quantities of oil and gas not yet classified as SEC proved oil and gas reserves. Resources are consistent with the Society of Petroleum Engineers (SPE) 2P + 2C definitions.
Discovered and prospective resources: Our use of the term “discovered and prospective resources” are consistent with SPE 2P + 2C + 2U definitions.
Organic: Our use of the term Organic includes SEC proved oil and gas reserves excluding changes resulting from acquisitions, divestments and year-average pricing impact.
Shales: Our use of the term ‘shales’ refers to tight, shale and coal bed methane oil and gas acreage.
Underlying operating cost is defined as operating cost less identified items. A reconciliation can be found in the quarterly results announcement.
The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities. In this release “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 release 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 as “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 release 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 release, 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. There can be no assurance that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this release 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, 2015 (available at www.shell.com/investor and www.sec.gov ). These risk factors also expressly qualify all forward looking statements contained in this release and should be considered by the reader. Each forward-looking statement speaks only as of the date of this release, November 9, 2016. 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 release.
With respect to operating costs synergies indicated, such savings and efficiencies in procurement spend include economies of scale, specification standardisation and operating efficiencies across operating, capital and raw material cost areas.
We may have used certain terms, such as resources, in this release 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.
Royal Dutch Shell November 9, 2016 4
Deep waterWorld class position
Shell’s deep water heartlands
244
206
13335
Production 618 kboe/d
17% RDS total
Gulf of Mexico
Malaysia
Nigeria
Brazil
2016 YTD production kboe/d
Safety
Deep waterRDS
TRCF/million working hours
0
0.5
1
1.5
2
12 13 14 15 16Q2
Royal Dutch Shell November 9, 2016 5
Deep water capabilities
Leading deep water developer
Success through innovation and leveraging technology
Brazil in moderate depth
Auger 1993
Mars1996
Olympus2014
Ram-Powell1997
Bonga 2005
Cognac 1978
Malikaiin progress
Ursa1999
Gumusut-Kakap2014
BC-102010
Na Kika2003
Perdido2010
Stones2016
Bullwinkle1998
LulaNon-operated
Appomattoxin progress
Royal Dutch Shell November 9, 2016 6
Advantaged portfolio
EUR = estimated ultimate recovery of resources versus first oil view
% increase
Current EUR versus first oil view
Cumulative resources added million boe
Exploration in Gulf of Mexico
Near field exploration and tie-backs to fill hubs
New heartland discoveries for growth
0%
100%
200%
300%
0 5 10 15 20
Auger
Mars + Mars B
Ursa
Ram PowellBrutus
Perdido
Bonga
0
500
1000
2010 2011 2012 2013 2014 2015 Q32016
AppomattoxVito
Cardamom South Deimos
VicksburgVito appraisal
Appomattox appraisal
RydbergKaikias
Powernap
Kaikias appraisalPowernap appraisal
Kepler NorthFort Sumter
years since start-up
Royal Dutch Shell November 9, 2016
0
200
400
600
800
1000
2015 2020
Portfolio shift and structural cost reduction lowering the future project break even prices
Production and free cash flow growth
0
2
4
6
8
10
13 14 15 2016E 2017/18
7
Competitive growth Thousand boe per day
Production
$ billion
$6-7 billion
Capital investment
Pre-FID funnel break even price $ per barrel
Capital discipline
2016
2014
BrazilGulf of Mexico Other
2013-15 capital investment excludes BG
% of outstanding capitalUnder constructionOn-stream FEED
0
10
20
30
40
50
60
70
80
0% 50% 100%
Royal Dutch Shell November 9, 2016 8
Production excellence $ per boe
Deep water direct unit operating costs
%
Deep water availability
Structural operating cost reductions
Disciplined approach to maximize availability
0
5
10
15
2014 2015 2016E
-30%
80
85
90
2013 2014 2015 2016 YTD
Royal Dutch Shell November 9, 2016 9
Norphlet case study $ per boe breakeven price
Appomattox potential
Shell leaseDiscovery
Fort Sumter
Rydberg
VicksburgAppomattox
future Appo TLP
Mississippi canyon Desoto canyon
TLP
0
20
40
60
2015FID
Futuretie-backs
PotentialCurrentestimate
CompetitiveScoping
+Efficient
Execution+
Supply ChainTransformation
Advantaged portfolio: new discoveries allow
opportunity to further lower BEP
Competitive growth: continue to reduce costs
since investment decision
Production excellence: driving top quartile
performance through “Fit for the future”
program
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Shell deep water Brazil
Shell operated mature assets in Campos Basin
Petrobras operated growth assets in Santos Basin
Future exploration potential
BC-10
BJSA
Santos
Basin
Campos
Basin
Lula
Sagitario
(exploration)
Lapa
Sapinhoá
Berbigão, Sururu
and Atapu
Libra
BMS-54
(exploration)
Iracema
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Brazil: Campos Basin Legacy operated assets
80% Shell operator
On-stream in 2003
Maximize economic life and abandon efficiently
Bijupira Salema
50% Shell operator
On-stream in 2009
Focus on reducing opex and infill opportunities
BC-10
Shell deep water Brazil operating experience
Production ~30 kboe/d
Royal Dutch Shell November 9, 2016
0
10
20
30
40
50
Santos Basin UKNorth Sea
Gulf of MexicoDeepwater
AngolaDeepwater
NigeriaDeepwater
Produced
12
1 Source: Wood Mackenzie Upstream Data Tool August 2016 for the produced / remaining reserves and Exploration Tool March 2016 for the yet to find resource
Industry off-shore resource base1
Significant growth and resource potential
Santos basin top tier deep water acreage
early in life-cycle
Significant learning curve potential and
upside
Billion barrels
RemainingTotal including yet to find
Brazil: Santos BasinAdvantaged portfolio
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1 The Berbigão, Sururu and Atapu accumulations are subject to unitisation agreements
Petrobras operated
Significant development in progress
Impressive delivery track record
BM-S-50
BM-S-09
BM-S-11
BM-S-11
1
2
3
Iracema25%
Leased FPSO commissioning
Sapinhoá30%
4
Replicant FPSO under construction
9
8
7
6
5
Sururu25%1
Lula25%
Lapa30%
BM-S-09
Future Leased FPSO
Leased FPSO producing
BM-S-11
Berbigão25%1
Atapu25%1
Committed FPSO
Oilcapacity(Kbbl/d)
1st oil
1 Lula Pilot 100 On stream
2 Sapinhoá South 120 On stream
3 Lula NE 120 On stream
4 Sapinhoá North 150 On stream
5 Iracema South 150 On stream
6 Iracema North 150 On stream
7 Lula Alto 150 On stream
8 Lula Central 150 On stream
9 Lapa 100 2016
10 Lula South 150 2017
11 Lula North 150 2017
12 Berbigão 150 2018
13Lula ExtremeSouth
150 2018
14 Atapu South 150 2019
15 Atapu North 150 2021+
%Shell share interest
Brazil: Santos BasinCompetitive growth
Royal Dutch Shell November 9, 2016
0 15 30 45
14
Brazil: Santos BasinCompetitive growth
Average number of days
Drill and complete time
$ per barrel forward looking breakeven price
Brazil pre-salt breakeven price
Top 10 pre-salt producer wells - ANP
Well performance
Learning curve resulting in significant cost reduction
Exceptional well productivity
Low breakeven prices
0
100
200
300
2010 2013 2016
Lula #1Lula #2Lula #3
JubarteLula #4
Sapinhoa #1Lula #5
Lula #6Sapinhoa #2Sapinhoa #3
Shell equity No Shell equity Flow rate in kboe per day
-70%
Lula FPSO Cidade de Saquarema0
10
20
50
40
30
Future volumes
Producing assets Development assets
100%50%0%
Royal Dutch Shell November 9, 2016
Former BG assets driving free cash flow
through competitive growth and production
excellence
15
Brazil: Santos Basin
Capital investment and production excludes Libra + Campos Basin
$ billion
0
1
2
3
2016 2017 2018 2019
Capital investment
Thousand boe per day
0
200
400
2016 ~2020
Production
P66 FPSO BrasFELS Shipyard
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Brazil: Libra
Libra
Shell Interest
Libra EWT FPSO
Petrobras operated with 5 company
consortium
Shell interest 20%
Strong partnership with close collaboration
EWT 50kboe/d FPSO first oil expected in
2017
Lula
2ANP2A
C-1
C-2
NW-5
NW-4
NW-1
NW-3
NW-2
NW-7
Drilled Wells
Ongoing Wells
Royal Dutch Shell November 9, 2016 17
Partnering with Petrobras
Deepening the partnership between the top two deep water
players in industry
Leveraging Shell’s global experience in the pre-salt
Joint efforts to unlock additional value from assets
Royal Dutch Shell November 9, 2016 18
Deep water summary
Strong deep water capabilities combined with advantaged
portfolio
Brazil pre-salt best in class deep water basin
Disciplined investment in competitive growth with a strong
focus on production excellence
Positioned for 2020s cash engine with free cash flow delivery
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