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1 Copyright of Royal Dutch Shell plc 28/7/2011
ROYAL DUTCH SHELL PLC SECOND QUARTER 2011 RESULTS
THE HAGUE JULY 28, 2011
2 Copyright of Royal Dutch Shell plc 28/7/2011
ROYAL DUTCH SHELL PLC SECOND QUARTER 2011 RESULTS
PETER VOSER CHIEF EXECUTIVE OFFICER
3 Copyright of Royal Dutch Shell plc 28/7/2011
DEFINITIONS AND CAUTIONARY NOTE
The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate 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 in which Royal Dutch Shell either directly or indirectly has control, by having either a majority of the voting rights or the right to exercise a controlling influence. The companies in which Shell has significant influence but not control are referred to as “associated companies” or “associates” and companies in which Shell has joint control are referred to as “jointly controlled entities”. In this presentation, associates and jointly controlled entities are also referred to as “equity-accounted investments”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect (for example, through our 24% shareholding in Woodside Petroleum Ltd.) 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‟‟, „„ intend‟‟, „„may‟‟, „„plan‟‟, „„objectives‟‟, „„outlook‟‟, „„probably‟‟, „„project‟‟, „„will‟‟, „„seek‟‟, „„target‟‟, „„risks‟‟, „„goals‟‟, „„should‟‟ 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 potential litigation and regulatory measures as a result of climate changes; (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. 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 factors that may affect future results are contained in Royal Dutch Shell‟s 20-F for the year ended 31 December, 2010 (available at www.shell.com/investor and www.sec.gov ). These factors also should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, 28 July 2011. Neither Royal Dutch Shell 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. There can be no assurance that dividend payments will match or exceed those set out in this presentation in the future, or that they will be made at all. We use certain terms in this presentation, such as discovery potential, that the United States Securities and Exchange Commission (SEC) guidelines strictly prohibit us from including in 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. You can also obtain these forms from the SEC by calling 1-800-SEC-0330.
4 Copyright of Royal Dutch Shell plc 28/7/2011
PERFORMANCE
STRATEGY PRIORITIES
Competitive performance – Profitable growth – Sharper delivery
• Q2 2011 CCS earnings $6.6 billion • Growth performance • Asset sales progress
• Started up three major projects: Qatargas 4, Pearl GTL Train1, AOSP-1
• Innovation, full value chain, long-life returns
• New upstream investment for medium term growth • Raízen joint venture
Q2 & H1 SUMMARY
EARNINGS CCS BASIS EXCLUDING IDENTIFIED ITEMS
5 Copyright of Royal Dutch Shell plc 28/7/2011
PERFORMANCE FOCUS CONTINUOUS IMPROVEMENT
50/50 JV with CNPC • Tight gas development requires „000‟s of wells • Sourcing rigs, services and drilling equipment from
China • Integrated plan to drill and complete repeatable,
low cost wells
EXAMPLE: TIGHT GAS WELLS MANUFACTURING JV
5
Continuous improvement
Cost focus
Operational excellence
Capital efficiency
Simplification
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DIVESTMENT PROCEEDS ASSET SALES PROGRESS 2011 YTD
PERFORMANCE FOCUS CAPITAL EFFICIENCY
$ BLN - CUMULATIVE
DOWNSTREAM
UPSTREAM
CORPORATE
Allocating capital to high impact growth
Exit from late-life + non-core positions
Divestment /exit announced
Downstream
Stanlow
14 countries Africa
Chile
GOM Assets
Cano Sur
Wildcat Hills /Woodenhouse
Clyde
Pakistan South Texas
Upstream
U.S. Car Care
Nigeria
Deal Complete
LPG business worldwide
Harburg refinery
Altamira
BM-S-8
Dominican Republic
7 Copyright of Royal Dutch Shell plc 28/7/2011
DELIVERING NEW GROWTH PROJECT START-UPS 2011 NEW START-UPS IN 2011
* PEAK PRODUCTION; SHELL SHARE: $80 OIL PRICE SCENARIO
• Successful ramp-up of 7.8 mtpa project • > 30 cargoes shipped to 11 countries • Part of Shell‟s 20.5 mtpa world-wide LNG portfolio
• Mine expansion on-stream Q3 2010; Upgrader Q2 2011 • Full ramp-up expected H2 2011 • Next steps: debottlenecking of 255,000 b/d project; Quest CCS
• Train 1 ramping up; 6 of 12 GTL reactors on stream • First shipments of GTL products June 2011 • Train 2 start-up by end 2011
7
Qatargas 4
Canada oil sands: AOSP-1 Upgrader
Qatar: Pearl GTL
>400,000 boe/d* for Shell ~ $30 bln capital investment
Innovative technology, full value chain, long-life returns
8 Copyright of Royal Dutch Shell plc 28/7/2011
NA Tight Gas • Continued growth programmes
AOSP DEBOTTLENECKING: 1st FID • 10 kboe/d; Shell 60%; Shell operated
SABAH GAS KBB FID • 130 kboe/d; Shell 30% • Part of Kebabangan Cluster PSC
MATURING NEW OPTIONS H1 2011 DELIVERY
PRELUDE FLNG FID • 110 kboe/d; Shell 100%; Shell operated • 3.6 mtpa LNG, 1.3 mtpa condensate, 0.4 mtpa LPG
CARDAMOM FID • 50 kboe/d; Shell 100%; Shell operated • Production through Auger platform
UPSTREAM
Cardamom/Auger platform Gulf of Mexico
DOWNSTREAM
Raízen, Brazil
Prelude, Australia RAIZEN • 50/50 Shell/Cosan JV • Biofuels in Brazil; ~4500 retail stations • Shell 2nd generation biofuels technology
2010 – H1 2011 investment decisions > 400,000 boe/d* potential
* PEAK PRODUCTION; SHELL SHARE: $80 OIL PIRCE SCENARIO
UK RETAIL ACQUISITION • 254 sites; improved network
SCHIEHALLION REDEVELOPMENT FID • 145 kboe/d; Shell 36%
9 Copyright of Royal Dutch Shell plc 28/7/2011
MATURING NEW PROJECTS BRAZIL MARKETING AND BIOFUELS
Raízen – Sugarcane harvesting
Marketing JV
• ~4,500 retail sites; ~10% of Shell world-wide portfolio
• Rebranding and enhanced customer offering
• Synergies + growth potential
Biofuels JV
• Leading Brazil and Top 5 global ethanol player
• > 30 kbd ethanol production capacity
• > 80 kbd potential ~ 5 years
• Shell world-wide trading opportunities
• Next generation technologies
Retail Brazil
50-50 SHELL-COSAN
10 Copyright of Royal Dutch Shell plc 28/7/2011
ROYAL DUTCH SHELL PLC SECOND QUARTER 2011 RESULTS
SIMON HENRY CHIEF FINANCIAL OFFICER
11 Copyright of Royal Dutch Shell plc 28/7/2011
$/BARREL $/MSCF
SHELL OIL & GAS REALISATIONS
INDUSTRY REFINING MARGINS
PRICES AND MARGINS
$/BARREL
INDUSTRY CHEMICALS MARGINS
• Q2 2011 CHEMICAL MARGINS: BASED ON AVAILABLE PRICES/MARGINS AT THE END OF THE QUARTER
$/TONNE
11
US WEST COAST
US GULF COAST COKING ROTTERDAM COMPLEX
SINGAPORE
US ETHANE
WESTERN EUROPE NAPHTHA
NE/SE ASIA NAPHTHA
GAS (RHS)
OIL
* Q211 SINGAPORE MARGIN IS ZERO
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Q2 2011 FINANCIAL HIGHLIGHTS CCS EARNINGS ($ BILLION) Q2 2010 TO Q2 2011
EARNINGS CCS BASIS, EARNINGS AND EPS EXCLUDING IDENTIFIED ITEMS
Q2 11 Q210
UPSTREAM 5.4 3.3
DOWNSTREAM (CCS) 1.1 1.2
BUSINESS SEGMENTS TOTAL 6.5 4.4
CORPORATE & MINORITIES 0.1 (0.2)
CCS NET EARNINGS 6.6 4.2
CCS EARNINGS, $ PER SHARE 1.05 0.69
CASH FROM OPERATIONS 10.0 8.1
DIVIDENDS 2.6 2.4
DIVIDEND, $ PER SHARE 0.42 0.42
$ BILLION
13 Copyright of Royal Dutch Shell plc 28/7/2011 13
UPSTREAM PERFORMANCE
EARNINGS OIL & GAS PRODUCTION
$ BILLION MILLION BOE/D
OTHER UPSTREAM INTEGRATED GAS
EXCLUDING IDENTIFIED ITEMS
CONTROLLABLE
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DOWNSTREAM PERFORMANCE
CCS EARNINGS AVAILABILITY AND SALES VOLUMES
EXCLUDING IDENTIFIED ITEMS
$ BILLION % AVAILABILITY VOLUME
OIL PRODUCTS CHEMICALS
OIL PRODUCT SALES (MLN BBLS/D) CHEMICALS AVAILABILITY
REFINERY AVAILABILITY CHEMICALS SALES (MLN TONNES)
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CASH PERFORMANCE 12 MONTHS
BUSINESSES GROUP
CASH FLOW FROM OPERATIONS EXCL. NET MOVEMENTS IN WORKING CAPITAL
$ BILLION $ BILLION
PAY-OUT ASSET SALES
CAPEX (EXCL. ACQUISITIONS) + EQUITY ACC. INVESTMENTS ACQUISITIONS
UPSTREAM DOWNSTREAM
SOURCES
USES
SOURCES
USES
SOURCES USES
16 Copyright of Royal Dutch Shell plc 28/7/2011
$ Bln 2009
2010 H1 2011 2011 Target
Organic investment 31 24 10 ~28
Acquisitions 1 7 2 ~2.5
Disposals (3) (7) (4) ~(5)
Net Capital Investment
29 24 8 ~25-27
Gearing %
BALANCE SHEET CAPITAL INVESTMENT
INVESTMENT AND BALANCE SHEET
Gearing range
Sustained growth investment $25 - $27 bln net capex 2011 – 2014 Prudent balance sheet management
17 Copyright of Royal Dutch Shell plc 28/7/2011
ROYAL DUTCH SHELL PLC SECOND QUARTER 2011 RESULTS
PETER VOSER CHIEF EXECUTIVE OFFICER
18 Copyright of Royal Dutch Shell plc 28/7/2011
SUMMARY
• Q2 2011 CCS earnings $6.6 bln (EPS +52% Q2-Q2) • Oil and gas volumes 3.0 mln boe/d; + 2% Q2-Q2 excluding disposals • $4.4 billion asset sales year-to-date
• Start-ups: Qatargas 4, Pearl GTL Train 1, AOSP-1 • > 400 kboe/d*; $30 bln investment • Innovation, full value chain, long-life returns
• > 400 kboe/d* new projects launched 2010-H1 2011 • Raízen joint venture
EARNINGS CCS BASIS EXCLUDING IDENTIFIED ITEMS * PEAK PRODUCTION; SHELL SHARE: $80 OIL PRICE SCENARIO
19 Copyright of Royal Dutch Shell plc 28/7/2011
ROYAL DUTCH SHELL PLC SECOND QUARTER 2011 RESULTS
Q&A
20 Copyright of Royal Dutch Shell plc 28/7/2011
ROYAL DUTCH SHELL PLC SECOND QUARTER 2011 RESULTS
THE HAGUE JULY 28th, 2011