ROYAL DUTCH SHELL PLC SPDC FLARES REDUCTION PORT HARCOURT OCTOBER 10, 2012 Copyright of Royal Dutch Shell plc 10 October, 2012 1
SPDC FLARES REDUCTION PROGRAMME MUHAMMAD SHITTU GM FLARED GAS Copyright of Royal Dutch Shell plc 10 October, 2012 2
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 23% 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, 2011 (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, 10 October 2012. 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 resources, 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. Copyright of Royal Dutch Shell plc 10 October, 2012 3
NIGERIA NATURAL GAS PRODUCTION AND UTILISATION 41% EXPORT LNG 3.2 bcf/d (Shell operated 56%: 1.8bcf/d) 32% RE-INJECTION & OTHER OPERATIONAL USAGE 2.5 bcf/d (Shell operated 4%: 0.1bcf/d) GAS WELLS PRODUCTION 7.8 bcf/d (Shell operated 35%: 2.8 bcf/d) 15% 12% GAS FLARING 1.2 bcf/d (Shell operated 18%: 0.2bcf/d) DOMESTIC CONSUMPTION 0.9 bcf/d (power & industries) (Shell operated 67%: 0.6bcf/d) Copyright of Royal Dutch Shell plc 10 October, 2012 4
IMPROVEMENTS IN FLARING PERFORMANCE SPDC JV FLARE VOLUMES & INTENSITY FLARING PERFORMANCE MMscf per day 900 Mscf/bbl 1.20 MMscf per day 300 1.00 600 0.80 200 0.60 300 0.40 100 0.20 0 0.00 0 2010 ACTUAL 2011 ACTUAL 2012 YTD Historical associated gas flared (MMscf/d) Flaring intensity Active associated gas gathering Inactive associated gas gathering No associated gas gathering facilities Non associated gas EA (Sea eagle) Copyright of Royal Dutch Shell plc 10 October, 2012 5
SOUTHERN SWAMP ASSOCIATED GAS (AG) /DOMESTIC GAS PROJECT SCOPE/DEVELOPMENT PLAN AG compression systems in 4 flow stations (75 MMscf/d) Gas gathering pipelines Gas processing plant at Tunu 70 MMscf/d central compression system 160 MMscf/d dew pointing and export system Offshore pipeline to riser platform A Drilling and completion of 2 NAG wells Drilling and completion of 18 Oil wells Proposed gas plant at Tunu To Forcados Terminal PRODUCTION 70 kbbl/d of oil to Forcados via Trans Ramos pipeline 100 mmscf/d to domestic gas market FID 2012 ONSTREAM 2014/2015 OGBOTOBO 45 Mbpd 10MMScf/d EA RISER PLATFORM E 8 x 16 km 16 x 32 km BRASS CREEK MANIFOLD 15MMScf/d TUNU 80MMscfd AG CPF BENISEDE 60Mbpd 20MMScf/d 12 x 16 km 12 x 24 km Dodo N. 10 x 10 km 120 MMScf/d NAG Slug Catcher 160 MMScf/d HCDP With provision of bays for future expansion) OPUKUSHI 90 Mbp 30MMScf/d EXISTING OIL PIPELINES NEW GAS GATHERING LINE EXPORT PIPELINE TO OGGS DISUSED LINES Copyright of Royal Dutch Shell plc 10 October, 2012 6
74,75,78,87 C/S K M ANI FOLD COM PRE. STN ALT. SI TE 2 76,85 COM PRESSOR STN BUFFER ZONE FORC-51,72,73,90 J F/S ADD. ACQUISITION Asisagbene LI VI NG ACCOMM. AREA COM PRE STN ALT. SI TE 3 HELI PAD 79 77,108 I FORC-53 115,116 F/L TRACE FORC-103,104,105,106,107 FORC-69,70,71,82,83 FORC-30,57,58,5963 H FORC-21 FORC-11,39,40,41,91,92 G FORC-9,54,55,56 FORC-95,97,98,101 FORC-52,64,65,68 F 113 FORC-31,48.49,50 FORC-4,32,33,34 FORC-5,22,23,24 E FORC-121,122,123,124 D FORC-1,37,38,89 C FORC-10 FORC-42,60,61,62 FORC-2,27,28,29 B F/S FORC-3,25,26,66 A Guogbene FORC-93,94 FORC-120 13,14,17,19 15 8" FORC. N. BANK D/L FORC-12 80 F/S GROUNDBED CAM P SITE LONG TERM - SHORE PROTECTION MEASURES GROUNDED SI TE IN- LINE DEHYDRATION SITE SCHOOL JUNIOR STAFF CLUB KANTU 3 JETTY 7 8 6 APRON FORCADOS TERMI NAL AREA 9 5 1 10 4 2 H CABLE RUN SITE SHORELINE 13-8-76 GROUNDED SI TE UNIT- 1 RE - LOCATION AGIP FACILITIES FORCADOS YOKRI INTEGRATED PROJECT ORIGINAL SCOPE 4 new flow stations with gas gathering Central processing facility (CPF) 25 wells 6 new platforms in estuary ADDITIONAL SCOPE Switch from LNG to domestic gas market 1 non-associated gas wells Renew estuary platforms & subsea bulk lines 51A YOKRI B i g h t o f B e n i n Yokri Egbe Sokobolo FORC-67 FORC-18,20,43,44 45,46,47 JA / JB 128 52A NEW ESTUARY FLOW STATION 5A LOCATION 3A SOUTH BANK NORTH BANK FS, FLB & CCP/CPF Obotobo F O R C A D O S R I V E R Ogulaha FORCADOS TERMINAL PRODUCTION 90 kbbl/d to Forcados terminal 60 mmscf/d to domestic gas FID 2012 ONSTREAM 2014/2015 Partially Completed North Bank CCP/CPF Copyright of Royal Dutch Shell plc 10 October, 2012 7
FLARING SUMMARY SUBSTANTIAL PROGRESS MADE SPDC JV committed to reduce continuous flaring in Nigeria, and complies with Nigerian laws and regulations on flaring Flaring and flare intensity dropped by ~60% since 2002 SPDC JV spent >$3bln to gather ~60% of its associated gas (AG) production since 2000 Closing in high gas to oil ratio wells Further ~$4bln on oil & gas projects, gathering a further 35% by 2014/2015, taking SPDC JV flaring intensity below current global average Sustained funding, security and investment in gas infrastructure and deregulated gas pricing are required in order to significantly grow domestic gas industry Partially Completed North Bank CCP/CPF Copyright of Royal Dutch Shell plc 10 October, 2012 8
SPDC FLARES REDUCTION QUESTIONS & ANSWERS Copyright of Royal Dutch Shell plc 10 October, 2012 9