Escolar Documentos
Profissional Documentos
Cultura Documentos
Re-shaping Shell,
to create a world-class investment case
Downstream
John Abbott Downstream Director
Istvan Kapitany EVP Retail
John Abbott Istvan Kapitany
Integrated Gas
Maarten Wetselaar Integrated Gas Director
Steve Hill EVP Gas and Energy Marketing & Trading
Maarten Wetselaar Steve Hill
Substantial +
long lasting World needs
shifts in energy more energy;
less CO2
landscape 2000 2050
$
2005 2010 Q1 2016
New sources OPEC, shales, shorter price cycles Requires new value creation
New energy carriers models
New business models
Losses + Oil
4.3
btoe transformation
0
2000 2013 2030
IEA 450
* The net asset value, in line with accounting standards, is determined by reference to oil and gas prices, as reflected in the prevailing market view on the day of completion.
Oil and gas prices are based on the forward price curve for the first two years (2016: $38, 2017:$44), and subsequent years based on the market consensus price view @ 15 Feb 2016
2013 Today
300
Corporate
BG acquisition:
Corporate
Deep water + LNG growth accelerated Integrated Gas
200
Integrated Gas
~500 kboed start-ups + 13 FIDs
Restructured conv. oil + gas, Nigeria, shales
& oil products
Upstream Upstream
100
Reduced and re-phased pre-FID options
Cancelled Carmon Creek + Alaska
Divested Woodside (part), Australia
Downstream Downstream
downstream, proceeds from MLP, others
0
in multiple time Funds dividends + balance sheet Cash engines 2020+ Material value + upside
horizons
Affordable growth in
Competitive + resilient Path to profitability
advantaged positions
Strong free cash flow and returns FCF + ROACE pathway Managed exposure
$2 billion
Investment $11 billion
(cash) $24 billion
Slide shows end 2015 capital employed and 2013-15 cumulative CFFO and FCF $64 billion
Capital
$ billion
50
Oil products 3 3-4
allocation -35%
Conventional
5 5-6
oil + gas
Cash
engines
Integrated gas 6 4-5
25
25 Deep water 8 6-7
Growth
priorities
Chemicals 3 3-4
Shales 2 2-3
Future
Reducing capital investment opportunities
New energies <1 <1
More predictable
development flow Total ~29 25-30
0
2014 2016E 2017 - 20 avg
Shell BG
Integrated Gas
Oil Products
20
Chemicals
profitable 8
1000
growth 800
6
600
4
400
2 200
0 0
2015 2020 2015 2020
On-stream Under construction On-stream Under construction FEED
Growth outlook driven by Advantaged feed stocks + Shell technology Building on GOM exploration + BG Brazil
discovered oil & gas and Pennsylvania chemicals: polyethylene Brazil pre-salt: 15 FPSOs ~2020
established chemicals Gulf Coast expansion: alpha olefins Gulf of Mexico: Stones + Appomattox developments
positions
China expansion: EOG, SMPO/POD
New energies
Mobility Renewables
transition growth
New fuels
GROWTH PRIORITIES
Deep water -1 10 ~5 ~10 Deep water delivering
Chemicals 1 15 ~0 ~10 free cash flow; Chemicals
Growth priorities ~20% 0 11 ~25% ~5 ~10 continues to grow
FUTURE OPPORTUNITIES
Shales -4 -12 ~0 <5
Transitioning to
New energies - - ~0 <5
growth businesses
Future opportunities ~5% -4 -12 ~5% ~0 <5
Organic FCF 5 20-25
Divestments 7 ~5
Dividends + Attractiveness,
Buybacks resilience Multi-year timescales and planning
Balance Sheet
Positioning to cover dividends in down-cycle,
0 30% gearing and generate excess free cash flow in up-cycle
through cycle
25 2
0 0
Shell + BG Exxon Chevron Total BP Exxon Shell + BG Chevron Total BP
Shell BG
* Shells reserves are calculated on a SEC basis and BGs 1P reserves are calculated on a PRMS basis, as published by the SPE
600
2
400
1
200
0 0
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2014 2015 2016 2014 2015 2016
Source: BG
Joint integration Deliver safe, efficient operations Combine best practices and retain best staff
planning team
established Management announcements + talent review Staffing of combined organisation
Early preparation for Understand BG business & practices Integrated business plan
successful integration
UK + US office footprint Transition teams move to business as usual
1
Exploration Reduced activity via BG combination
0
2016 2017 2018
2018 synergies increased
Costs synergies Synergies target as per
from $3.5 bln to $4.5 billion -1 Exploration synergies prospectus
projects construction
1200 15
0 0
2014-15 2016-17 2018+
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
predictable 60 58
capital 47 -35%
investment 40 36
$25-30 billion
29
20
0
2013 2014 2015 2016E 2017 - 20 avg
operating cost 60
50
48
46
-20%
40
40
20 $40 billion
0
2013 2014 2015 end-2016
run-rate
Shell BG
financial
framework
Projects start-up post-2014 ~10 billion +/- $10 Brent = ~5 billion CFFO
n/a ~$2 billion
(CFFO) by 2018*
Improve our financial Differentiated products Full integration with trading Feedstock plays
performance Brand leverage + customer offer Improve retained assets Capacity growth
Upgrading our portfolio Selective growth Reducing refining capacity
Returns + free cash flow
improvement
Chemicals growth priority
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 capital
Refining & trading ROACE (RHS) Working capital movements Free cash flow
Capital employed
$49 billion as at end Q116 Contribute sustainable and growing cash surplus
Deliver competitive returns
Refining & trading
Marketing
Chemicals
3 6 6
2 4 4
1 2 2
0 0 0
Refining capacity Marketing volumes 2007 2015
Attractiveness
manufacturing Shell Chile
Singapore fuels
Exit: LPG Northwest Europe
Motiva JV restructuring 2 Norway
Australia others
others
Denmark UK retail sites
Harburg LPG France
Italy MLP
Refinery
Exit from JV with Saudi Aramco Sale of ~33% of Showa Shell Sekiyu KK to Idemitsu
Integrate retained assets with Shell ~$1.4 billion
Brand licensing agreement Lubricants and fuel brand licensing agreements
Completion expected in 2016
2
10% 10% 10%
1
0% 0 0% 0%
2012 2013 2014 2015 16Q1 2012 2013 2014 2015 16Q1 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016
4Q 4Q YTD YTD
rolling rolling
Shell V-Power is the worlds most Leveraging GTL base oils with
widely sold premium fuel (68 Pureplus
markets)
Top 3 in critical markets, #1 in
#1 or #2 in high quality fuels China.
across 90% of our markets
North America
2016 Europe
300 Asia Pacific & Middle East
100
Strengthening our core
2016
Liquid
Growing our footprint Gas
Crackers + derivatives
0
2005 2015 2020
6
New liquids cracker and
derivatives units
Capacity: ~1.2 million tonnes
ethylene per annum
4 Nanhai, China
50/50 JV CNOOC
43
2006 Nanhai 2010 USGC go-light strategy 2010 Singapore 2016+ China + USA
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
15%
20
10%
10
5%
0 0%
2011 2012 2013 2014 2015 Q1 2016 2011 2012 2013 2014 2015
Downstream: Earnings on local GAAP basis adjusted for inventory valuation differences and excluding identified items; Peer group: Chevron, Total, BP, XOM, RDS
Chemicals: Earnings excluding identified items; peer group: XOM, LBI, DOW, BP, RDS Source brand preference: Ipsos Global Customer Tracker (covering 30+ markets)
Deliver profitable growth Production: 1.8 mboe/d Production: 0.6 mboe/d Production: 0.26 mboe/d
0 0 0
-5 -60 -5
2013 2014 2015 16Q1 2012 2013 2014 2015 16Q1
4Q rolling 4Q rolling
Conventional oil + gas Shales Rest of the world Americas
Deep water Other Brent (RHS)
+ improving $ billion
15
$ per barrel
30
-8%
performance -15%
Reduce costs + headcount 2014+
Upstream
>5,000 staff + contractor positions
10 20
Exit tail assets
5 10
- 0
2014 2015 2016E
-35%
80% 80%
10
60% 60%
40% 40% 0
0 15 30 45 60 0 10 20 2014 2015 2016E
Direct unit operating costs $/boe1 Direct unit operating costs $/boe1
2014 2015 2016 Q1 2014 2015 2016 Q1 Direct operating costs Direct overhead
4
25% liquids, 75% gas 160
Liquids Gas
0 0 0 0
2014 2013/14 Brazil
Current Current Appo Kaikias Coulomb Vito
Pre-salt
2015 2020
baseline baseline
4. Sapinho N.
Berbigo
3. Lula NE. Lapa Libra EWT /Sururu2 Lula W.
Libra 2. Sapinho S. Lula Central Lula ext S. Atapu S.2 Libra pilot
(20%)
BM-S-54
(80%) 1. Lula 7. Lula Alto Lula S Lula N Atapu N.2
Sagitrio
2010-15 2016 2017 2018 2019 2020+
(20%) Berbigo/
Iracema
Sururu/Atapu2
(25%)
(25%) Strong flow rates and performance
Lapa Lula
(25%) Top 10 pre-salt producer wells - ANP
(30%) Iracema #1
Sapinho Iracema #2
(30%)
Sapinho #1
100 km Iracema #3
Sapinho #2
Strong partnership with Petrobras Jubarte
Lula #1
Libra consortium continues appraisal work Iracema #4
Sapinho #3
High well productivity Lula #2
Average 25,000 boe/d 0 15 30 45
Flow rate in kboe per day
Shell equity No Shell equity
1 Operators view
2 The Berbigo, Sururu and Atapu accumulations subject to unitisation agreements
1 Block MC943
0
2014-15 2016-17 2018-19 ~2020
Schiehallion FPSO Start-ups: 2014-15 2016-17 2018+
Capital investment
$ billion
10
-30%
5
Substantial growth 17-19
Drives improved free cash
0
flow 2013-2015 2016-18
Kashagan, Kazakhstan
exploration
Netherlands Germany
Frontier Canada
Albania
strategy USA
Egypt
Oman China
Trinidad
&Tobago Nigeria Brunei
Malaysia
Tanzania
Prospect Time to
size production
Resources added 2010-2015 (million boe) (years)
Deliver profitable growth Production: 1.8 mboe/d Production: 0.6 mboe/d Production: 0.26 mboe/d
LNG Gas-to-Liquids
Oil + gas production
Sakhalin LNG
Liquefaction
Pearl GTL
Qatargas 4
Marketing & trading
Muscat LNG
Regasification
Focus on:
Cash + returns Hazira, India:
LNG jetty
Create + secure new
demand IOC leadership in growing market Operational excellence Energy transition
Moderate growth BG integration benefits Building GTL product premium Leverage adjacencies
New energies opportunities Moderate growth Explore + invest
performance 10
In service
Under construction
0
2012 2013 2014 2015 2016 Q1
4Q rolling
10 20 90
5 10 80
0 0 70
2012 2013 2014 2015 2016 Q1 Q115 Q215 Q315 Q415 Q116
4Q rolling
Cash flow
ROACE (RHS)
200
100
~55% Established LNG markets
0
2000 2005 2010 2015 2020 2025 2030
In operation Under construction Demand forecasts 2015
2020 to 2030
Asia continues as main growth area
Majority of new supplies from North America and potentially East Africa
Sabine Pass
QG-4
Oman
Nigeria Brunei
Atlantic LNG
Equatorial
Guinea Malaysia
50
20
40
15
30
Term contracts 10
20 (2-20 years)
~80%
5
10
0 0
Continued demand for oil + Sources Deliveries 2005 2007 2009 2011 2013 2015
Transport Regasification
The Netherlands
UK
Spain
Gibraltar China
Qatar
Kakinada
Vietnam
Hazira Philippines
Myanmar
Capacity rights
Proposed
LNG truck re-fuelling station Rotterdam,
Netherlands LNG for transport project Singapore
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
QCLNG T3 others*
Tanzania LNG
Prelude 2018
Option recycled
Gorgon 2016
* Offtake rights
New fuels
Integrated
Connected
energy
customer
solutions
ROACE 8% ~10%
CREATE A
WORLD CLASS
INVESTMENT CASE Organic free cash flow $5 billion p.a. $20-25 billion p.a.
Improving our metrics: Simpler company: Exit $30bn divestments: Energy transition:
FCF/share; ROCE; ~10% production; Innovative deals like CO2 footprint & new
net debt 5-10 countries Motiva, Showa energies strategy
and MLP
construction
kboe/d
2016-17 Forcados Yokri Interagted Project (FYIP) Nigeria 30 50 Conventional oil + gas
Gbaran-Ubie Ph2 Nigeria 30 150 Conventional oil + gas
Geismar AO4 United States 100 425 kta alpha olephins Chemicals
Kashagan ph1 Kazakhstan 17 300 Conventional oil + gas
Lapa Brazil 30 79 Deep water
Lula Central Brazil 25 131 Deep water
Lula Extreme South Brazil 25 142 Deep water
Lula South Brazil 25 145 Deep water
Malikai Malaysia 35 60 Deep water
ML South Brunei 35 35 Conventional oil + gas
NA LRS / tight gas USA/Canada various 82 Shales
Pernis solvent deasphalting Netherlands 100 7.2 kbpd Oil Products
Schiehallion Redevelopment United Kingdom 55 125 Conventional oil + gas
Scotford HCU debottleneck Canada 100 14 kbpd Oil Products
Stones United States 100 50 Deep water
2018+ Appomattox United States 79 175 Deep water
Atapu North** Brazil 25 148 Deep water
Atapu South** Brazil 25 147 Deep water
Baronia / Tukau Timur Malaysia 40 65 Conventional oil + gas
Berbigo/Sururu** Brazil 25 134 Deep water
Conventional oil + gas Clair Ph2 United Kingdom 28 100 Conventional oil + gas
Integrated Gas Coulomb United States 100 20 Deep water
Lula North Brazil 25 147 Deep water
Oil sands mining
Nanhai China Chemicals China 50 1200 kta C2 Chemicals
Oil Products Pennsylvania cracker United States 100 1500 kta C2 Chemicals
Deep water Prelude FLNG Australia 68 110 3.6 1.7 mtpa NGLs Integrated gas
Chemicals Rabab Harweel Integrated Project Oman 34 40 Conventional oil + gas
Southern Swamp AG Nigeria 30 30 Conventional oil + gas
Shales
Tempa Rossa Italy 25 45 Conventional oil + gas
New energies
** TheBerbigo,SururuandAtapuaccumulations subjecttounitisationagreements
kboe/d
SELECT Kaikias United States 100 40 Deep water
Libra pilot FPSO Brazil 20 150 Deep water
LNG Canada T3-4 Canada 50 13 Integrated gas
DEFINE Bonga South West Nigeria 43 205 Deep water
Bokor Malaysia 40 12 Conventional oil + gas
Changbei II China 50 57 Integrated gas
Deer Park OP3 United States 100 ~800 kta C2 Oil Products
Lake Charles United States 100 15 Integrated gas
LNG Canada T1-2 Canada 50 13 Integrated gas
Penguins Redevelopment United Kingdom 50 40 Conventional oil + gas
Sakhalin T3 Russia 28 ~5 Integrated gas
Val d'Agri Ph2 Italy 39 60 Conventional oil + gas
Vito United States 51 100 Deep water
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
TRCF Working hours (RHS)
Excludes BG
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
20
10 Integrated business + results
10
Lower oil prices
0 0
2012 2013 2014 2015 16Q1
4Q rolling
Dividend declared End period gearing (RHS)
Buyback
0 50 100
Delaware Basin %
300
+130%
200
100
0
2013 2014 2015
TEXAS
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
7,000
Mexico
Retail presence in 70
countries + 43,000 sites
Quest carbon capture + storage (CCS) start-up 2015 Pernis: aromatics project
40 -50%
4
20
2
0 0
2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 Q116
Cash operating cost excl. energy DD&A (clean)
Energy
16.3 mtpa LNG 8.5 mtpa LNG 15.6 mtpa LNG 5.3 mtpa LNG + NGLs
150 30 150
1st LNG Train 1
Dec 2014
100 20 100
50 10 50
0 0 0
2015-Jan 2016-Jan 2014-Jan 2015-Jan 2016-Jan
production Number of cargoes delivered in the quarter (RHS)
Source: BG