Brazil Shareholder visit 2016 Re-shaping Shell to create a world-class investment case

Transcription

1 Brazil Shareholder visit 216 Re-shaping Shell to create a world-class investment case Royal Dutch Shell plc November 9, 216 Let s make the future Royal Dutch Shell November 9, 216

2 Wael Sawan EVP Deepwater Royal Dutch Shell plc Royal Dutch Shell November 9, 216

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 thirdparty 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. Forwardlooking 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 2-F for the year ended December 31, 215 (available at and ). 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, 216. 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 2-F, File No , available on the SEC website Royal Dutch Shell November 9, 216 3

4 Deep water World class position Shell s deep water heartlands Safety TRCF/million working hours 2 Gulf of Mexico 1.5 Nigeria Q2 RDS Deep water 133 Malaysia 35 Production 618 kboe/d 17% RDS total 26 Brazil 216 YTD production kboe/d Royal Dutch Shell November 9, 216 4

5 Deep water capabilities Cognac 1978 Bullwinkle 1998 Malikai in progress Auger 1993 Mars Olympus Ram- Powell 1997 Bonga 25 Ursa 1999 Gumusut- Kakap 214 BC-1 21 Na Kika 23 Lula Non-operated Appomattox in progress Perdido 21 Stones 216 Leading deep water developer Success through innovation and leveraging technology Brazil in moderate depth Royal Dutch Shell November 9, 216 5

6 Advantaged portfolio Current EUR versus first oil view % increase 3% Exploration in Gulf of Mexico Cumulative resources added million boe Mars + Mars B 1 Kepler North Fort Sumter 2% Perdido Ursa Auger Vicksburg Vito appraisal Kaikias appraisal Powernap appraisal Near field exploration and tie-backs to fill hubs New heartland discoveries for growth 1% % Bonga Ram Powell Brutus years since start-up 5 Appomattox Vito Cardamom South Deimos Appomattox appraisal Rydberg Kaikias Powernap Q3 216 EUR = estimated ultimate recovery of resources versus first oil view Royal Dutch Shell November 9, 216 6

7 Competitive growth Capital discipline Pre-FID funnel break even price $ per barrel Capital investment $ billion 1 Production Thousand boe per day $6-7 billion % 5% 1% % of outstanding capital E 217/18 Gulf of Mexico Brazil Other On-stream Under construction FEED Portfolio shift and structural cost reduction lowering the future project break even prices Production and free cash flow growth capital investment excludes BG Royal Dutch Shell November 9, 216 7

8 Production excellence Deep water direct unit operating costs $ per boe 15-3% Deep water availability % Structural operating cost reductions Disciplined approach to maximize availability E YTD Royal Dutch Shell November 9, 216 8

9 Norphlet case study Appomattox Vicksburg Appomattox potential $ per boe breakeven price 6 future Appo TLP Shell lease Discovery TLP Fort Sumter Mississippi canyon Rydberg Desoto canyon Advantaged portfolio: new discoveries allow 4 2 Competitive Scoping + Efficient Execution + Supply Chain Transformation Future tie-backs opportunity to further lower BEP Competitive growth: continue to reduce costs since investment decision Production excellence: driving top quartile 215 FID Current estimate Potential performance through Fit for the future program Royal Dutch Shell November 9, 216 9

10 Shell deep water Brazil BC-1 BJSA Campos Basin Shell operated mature assets in Campos Basin Petrobras operated growth assets in Santos Basin Future exploration potential Santos Basin Sagitario (exploration) BMS-54 (exploration) Iracema Libra Berbigão, Sururu and Atapu Lapa Lula Sapinhoá Royal Dutch Shell November 9, 216 1

11 Brazil: Campos Basin Legacy operated assets Bijupira Salema BC-1 Shell deep water Brazil operating experience Production ~3 kboe/d 8% Shell operator On-stream in 23 Maximize economic life and abandon efficiently 5% Shell operator On-stream in 29 Focus on reducing opex and infill opportunities Royal Dutch Shell November 9,

12 Brazil: Santos Basin Advantaged portfolio Industry off-shore resource base 1 Billion barrels Santos basin top tier deep water acreage early in life-cycle Significant learning curve potential and upside Santos Basin UK North Sea Gulf of Mexico Deepwater Angola Deepwater Nigeria Deepwater Produced Remaining Total including yet to find Significant growth and resource potential 1 Source: Wood Mackenzie Upstream Data Tool August 216 for the produced / remaining reserves and Exploration Tool March 216 for the yet to find resource Royal Dutch Shell November 9,

13 Brazil: Santos Basin Competitive growth Committed FPSO Oil capacity (Kbbl/d) 1 st oil BM-S-11 Sururu 25% 1 Atapu 25% 1 1 Lula Pilot 1 On stream 2 Sapinhoá South BM-S-5 12 On stream 3 Lula NE 12 On stream Berbigão 25% 1 BM-S-11 4 Sapinhoá North 15 On stream 5 Iracema South 15 On stream 6 Iracema North 15 On stream Iracema 25% 6 5 Petrobras operated Significant development in progress Impressive delivery track record 7 Lula Alto 15 On stream 8 Lula Central 15 On stream 9 Lapa Lula South Lula North Berbigão Lula Extreme South Atapu South Atapu North BM-S-9 Lapa 3% 2 4 Sapinhoá 3% BM-S Lula 25% BM-S-11 Shell share interest Leased FPSO producing Leased FPSO commissioning Replicant FPSO under construction % Future Leased FPSO 1 The Berbigão, Sururu and Atapu accumulations are subject to unitisation agreements Royal Dutch Shell November 9,

14 Brazil: Santos Basin Competitive growth Drill and complete time Average number of days 3-7% Well performance Top 1 pre-salt producer wells - ANP Lula #1 Lula #2 Lula #3 Jubarte Lula #4 Sapinhoa #1 Lula #5 Lula #6 Sapinhoa #2 Sapinhoa # Shell equity No Shell equity Flow rate in kboe per day Learning curve resulting in significant cost reduction Exceptional well productivity Low breakeven prices Brazil pre-salt breakeven price $ per barrel forward looking breakeven price 5 Producing assets Development assets % 5% 1% Future volumes Lula FPSO Cidade de Saquarema Royal Dutch Shell November 9,

15 Brazil: Santos Basin Capital investment $ billion 3 Production Thousand boe per day ~22 Former BG assets driving free cash flow through competitive growth and production excellence P66 FPSO BrasFELS Shipyard Capital investment and production excludes Libra + Campos Basin Royal Dutch Shell November 9,

16 Brazil: Libra 2ANP2A NW-5 NW-4 NW-3 NW-2 NW-1 C-2 Libra NW-7 C-1 Drilled Wells Lula Ongoing Wells Shell Interest Libra EWT FPSO Petrobras operated with 5 company consortium Shell interest 2% Strong partnership with close collaboration EWT 5kboe/d FPSO first oil expected in 217 Royal Dutch Shell November 9,

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,

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 22s cash engine with free cash flow delivery Royal Dutch Shell November 9,

19 Questions & Answers Royal Dutch Shell November 9, 216

20 Wael Sawan EVP Deepwater Royal Dutch Shell plc Royal Dutch Shell November 9, 216

21 Brazil Shareholder visit 216 Re-shaping Shell, to create a world-class investment case Royal Dutch Shell plc November 9, 216 Let s make the future Royal Dutch Shell November 9, 216