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ROYAL DUTCH SHELL PLC
BUILDING NEW HEARTLANDS
SECOND QUARTER 2008 RESULTS
31 JULY 2008
ROYAL DUTCH SHELL PLC
BUILDING NEW HEARTLANDS
JEROEN VAN DER VEER
CHIEF EXECUTIVE
DEFINITIONS AND CAUTIONARY NOTE
Reserves: Our use of the term “reserves” in this presentation means SEC proved oil and gas reserves and SEC proven mining 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 or SEC proven mining
reserves. Resources are consistent with the Society of Petroleum Engineers 2P and 2C definitions.
Organic: Our use of the term Organic includes SEC proved oil and gas reserves and SEC proven mining reserves excluding changes resulting from acquisitions, divestments and
year-end pricing impact.
In this presentation, excluding in the financial statements, we have aggregated our equity position in projects for both direct and indirect interest (for example, we have aggregated
our indirect interest in North West Shelf LNG via our 34% shareholding in Woodside Energy Ltd).
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. Also included as a forward looking statement is our disclosure of reserves, proved oil
and gas reserves, proven mining reserves, organic reserves, net reserves and resources. 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 the Group’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserve estimates; (f) loss of market 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 effects arising from recategorisation of reserves; (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 December 31, 2007 (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 July 31, 2008. 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.
The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has
demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We may use certain
terms in this announcement that the SEC's guidelines strictly prohibit us from including in filings with the SEC. US Investors are urged to consider closely the disclosure in our Form
20-F, File No 001-32575 and disclosure in our Forms 6-K, File No 001-32575, available on the SEC’s website www.sec.gov. You can also obtain these forms from the SEC by
calling 1-800-SEC-0330.
2
Q2 2008 HIGHLIGHTS
COMPETITIVE RESULTS
• CCS earnings $7.9 billion; EPS +15%*
• Strong oil & gas prices; weaker downstream environment
• Good operating performance
INVESTING IN NEW ENERGY SUPPLIES
• Building new capacity: 1mboe/d upstream, 0.3mb/d downstream
• Increased spending in new growth options; increased disposals
STRATEGY ON TRACK
• Maintaining capital discipline; creating long-term shareholder value
• Competitive cash flow + shareholder returns
3 * EPS excluding Identified Items
KEY PROJECTS UNDER CONSTRUCTION
PERDIDO SPAR HULL SAKHALIN II LNG TRAIN 1
GJOA
HALFDAN PHASE IV
CORRIB
KASHAGAN
AOSP
N AMERICA TIGHT GAS SAKHALIN II
PORT ARTHUR PEARL GTL
QATARGAS 4
PERDIDO
GUMUSUT
URSA/PRINCESS OMAN
WATERFLOOD NIGERIA
SINGAPORE CHEMICALS
AFAM
NORTH RANKIN B
BC-10 PLUTO
NWS T5 / ANGEL
2008-09 START-UP
BC-10 FPSO NWS LNG TRAIN 5
4 OIL & GAS REFINING & CHEMICALS INTEGRATED UPSTREAM/DOWNSTREAM
EXPLORATION & BUSINESS DEVELOPMENT
H1 2008 UPDATE
CCS WEYBURN-MIDALE IOGEN BIOFUELS
SWITZERLAND RETAIL CHINA REFINERY &
CHUKCHI
PETROCHEMICALS LOI
VIRENT BIOFUELS
TECHNOLOGY
DUVERNAY OFFER
USA
HAYNESVILLE
USA
HYDROGEN LA
STONES
BRUNEI
GULF OF MEXICO
NIGERIA MLJ2-06
DEEPWATER
AUSTRALIA
COLOMBIA LLANOS ESTE IAGO-2
ARROW
COAL BED METHANE
EXMOUTH
PERU MOU BPZ
DRILLING: NEW POSITIONS:
5 DISCOVERY APPRAISAL SUCCESS UPSTREAM DOWNSTREAM NEW ACREAGE
SHELL & TIGHT GAS
PERFORMANCE: PINEDALE OPTIMISED SURFACE FACILITIES
KBOE/DAY DAYS
50 60
40 50
SHARED
> 4 KM DEPTH
PRODUCTION
30 40 FACILITY ON
SURFACE PAD:
~1 KM RADIUS
20 30
MULTIPLE WELLS
FROM ONE PAD
10 20
SANDSTONE GAS
RESERVOIRS
0 10
2002 2003 2004 2005 2006 2007 H1
2008
PRODUCTION PER DAY (KBOE/D)
DRILLING TIME PER WELL (DAYS)
6
ROYAL DUTCH SHELL PLC
BUILDING NEW HEARTLANDS
PETER VOSER
CHIEF FINANCIAL OFFICER
PRICES AND MARGINS
OIL & GAS PRICES REFINING MARGINS CHEMICALS MARGINS*
$/BBL $/MMBtu $/BBL $/T
130 12 28 700
120 11 24 600
110 10 20 500
100 9 16 400
90 8 12 300
80 7 8 200
70 6 4 100
60 5 0 0
Q207 Q307 Q407 Q108 Q208 Q207 Q307 Q407 Q108 Q208 Q207 Q307 Q407 Q108 Q208
BRENT JCC* US WEST COAST ROTTERDAM US ETHANE
WTI HENRY HUB ($/MMBtu) US GULF COAST SINGAPORE WESTERN EUROPE NAPHTHA
NORTH EAST ASIA NAPHTHA
* Q2 2008 indicative: based on available prices/margins at the end of the quarter.
8
Q2 2008 FINANCIAL HIGHLIGHTS
$ BLN
EARNINGS ($ BLN) Q2 08 Q2 07 Q2 2008 VERSUS Q2 2007 ($ BILLION)
- EXPL. & PRODUCTION 5.8 2.9
- GAS & POWER 0.6 0.5 10
- OIL SANDS 0.4 0.2
- OIL PRODUCTS 0.9 2.7 9
- CHEMICALS 0.1 0.5
BUSINESS SEGMENTS TOTAL 7.7 6.9
8
NET EARNINGS 7.8 6.9
7
EARNINGS PER SHARE ($) 1.27 1.10
DIVIDEND PER SHARE ($) 0.40 0.36
6
Q2 08 Q2 07
CASH FROM OPERATIONS* 15.9 10.6 5
SHARE BUY BACKS 1.4 0.9
DIVIDENDS 2.5 2.3 4
NET CAPITAL SPENDING 5.7 (0.5)
8
M
IN
M
7
20
20
EA
EA
M
Q
* Excluding working capital movements.
Q
R
R
.&
ST
ST
RP
N
UP
W
CO
9 Earnings CCS basis, Earnings and EPS excl. Identified Items
DO
UPSTREAM PERFORMANCE
EARNINGS OIL & GAS PRODUCTION
$ BILLION MLN BOE/D MLN TONNES
7 4 4
6
3 3
5
4
2 2
3
2
1 1
1
0 0 0
Q207 Q307 Q407 Q108 Q208 Q207 Q307 Q407 Q108 Q208
EXPLORATION & PRODUCTION OIL SANDS OIL EQUITY LNG SALES (MLN TONNES)
GAS & POWER GAS
10 Excluding Identified Items
DOWNSTREAM PERFORMANCE
CCS EARNINGS AVAILABILITY AND SALES VOLUMES
$ BILLION % AVAILABILITY VOLUME
4 100 7
3 95 6
2 90 5
1 85 4
0 80 3
Q207 Q307 Q407 Q108 Q208 Q207 Q307 Q407 Q108 Q208
OIL PRODUCTS CHEMICALS REFINERY AVAILABILITY OIL PRODUCT SALES (MLN BBLS/D)
CHEMICALS CHEMICALS SALES (MLN TONNES)
AVAILABILITY
11 Excluding Identified Items
DISPOSALS STRATEGY ON TRACK
H1 2008 UPDATE
CUMULATIVE DIVESTMENT PROCEEDS H1 2008 PERFORMANCE
$ BILLION
30
RAINBOW EUROPE UPSTREAM
PIPELINE
25 BEB
20
FRENCH
15 REFINERIES
BOOMVANG
10
NIGERIA
OFFSHORE NWS
OIL ASSETS
5
0
2004 2005 2006 2007 H108
UPSTREAM DOWNSTREAM OTHER ANNOUNCED COMPLETED
UPSTREAM
DOWNSTREAM
12
CASH PERFORMANCE
BUSINESS CASH GROUP CASH
$ BILLION $ BILLION
UPSTREAM DOWNSTREAM
40 60
SOURCES USES
SOURCES
35 ASSET SALES
50
CORPORATE
30
DOWNSTREAM ACQUISITIONS
USES 40
25
PAYOUT
20 30
SOURCES
15
20
UPSTREAM ORGANIC
10 CAPITAL
SPENDING
USES 10
5
0 0
EXPLORATION & :PRODUCTION OIL PRODUCTS ASSET SALES
GAS & POWER CHEMICALS ACQUISITIONS
OIL SANDS ORGANIC CAPITAL SPENDING
13
Rolling 12 months, excluding working capital movements.
CAPITAL SPENDING UPDATE
NET CAPITAL SPENDING ($ BLN) DEBT RATIOS (%)
2007 H1 2008 2008E
20%
ORGANIC 25.5 13.4 ~30-31
ACQUISITIONS 8.2 2.7 ~10 15%
DISPOSALS (9.9) (2.7) ~ (5)
NET CAPITAL SPENDING 23.8 13.4 ~35-36
10%
•INCREASED A&D 5%
•2008 DRILLING OPPORTUNITIES
0%
2005 2006 2007 H108
•INDUSTRY INFLATION + FX
NET DEBT INCLUDING OFF-BALANCE SHEET ITEMS
14
DELIVERING STRONG RETURNS
COMPETITIVE PAY-OUT (CUMULATIVE) COMPETITIVE GROWTH & RETURNS
$ BILLION $ BLN RETURN %
70 35 35%
60 30 30%
50 25 25%
40 20 20%
30 15 15%
20 10 10%
10 5 5%
0 0 0%
2004 2005 2006 2007 H1 '08 2004 2005 2006 2007 H1'08
CAPITAL UNDER CONSTRUCTION
DIVIDEND SHARE BUY-BACK ROACE UPSTREAM
RETURN ON CAPITAL IN SERVICE DOWNSTREAM
15
Q2 2008 HIGHLIGHTS
COMPETITIVE RESULTS
• CCS earnings $7.9 billion; EPS +15%*
• Strong oil & gas prices; weaker downstream environment
• Good operating performance
INVESTING IN NEW ENERGY SUPPLIES
• Building new capacity: 1mboe/d upstream, 0.3mb/d downstream
2008-09 capacity increase >250kboe/d + 3.6mtpa LNG
•
• Increased spending in new growth options; increased disposals
• 2008 net spending +$10 billion to $35-$36 billion; ~50% increase from 2007
STRATEGY ON TRACK
• Maintaining capital discipline; creating long-term shareholder value
• Competitive cash flow + shareholder returns
• $3.8 billion returned to shareholders H1 2008
16
* EPS excluding Identified Items
ROYAL DUTCH SHELL PLC
BUILDING NEW HEARTLANDS
Q&A
ROYAL DUTCH SHELL PLC
BUILDING NEW HEARTLANDS
SECOND QUARTER 2008 RESULTS
31 JULY 2008
APPENDIX: KEY PROJECTS
START UP PROJECT COUNTRY SHELL PEAK LNG 100% PRODUCTS CATEGORY SHELL
SHARE PRODUCTION CAPACITY OPERATED
% kboe/d mtpa
2008- 2009 AFAM GAS SUPPLY NIGERIA 30 46
BC 10 BRAZIL 50 100
NW SHELF LNG T5 /ANGEL AUSTRALIA 22.3 145 4.4
PERDIDO USA 35.4 130
SAKHALIN II /LNG T1-2 RUSSIA 27.5 395 9.6
URSA PRINCESS WATERFLOOD USA 45.4 30
2010-2011 AOSP EXP 1 CANADA 60 100
BONGA NW NIGERIA 55 59
CORRIB IRELAND 45 58
FORCADOS YOKRI IP NIGERIA 30 82
GBARAN UBIE PH 1 NIGERIA 30 160
GJOA NORWAY 12 107
HALFDAN PH4 DENMARK 46 23
HARWEEL OMAN 34 44
PEARL QATAR 100 320 140 kbbls/d GTL+
PLUTO LNG AUSTRALIA 31 124 4.3
QARN ALAM EOR OMAN 34 44
QATARGAS 4 LNG QATAR 30 280 7.8
SHELL EASTERN PETROCHEMICALS SINGAPORE 100 800 kta ethylene+ DS
PORT ARTHUR REFINERY EXPANS. USA 50 325 DS
2012+ GUMUSUT-KAKAP MALAYSIA 33 135
KASHAGAN PHASE 1 KAZAKHSTAN 16.8 300
NORTH RANKIN B AUSTRALIA 22.3 465
CHOICES AMAL STEAM OMAN NIGERIA LNG T7 NIGERIA
AOSP CANADA OLOKOLA LNG NIGERIA
BONGA SW NIGERIA PEACE RIVER / CARMON CREEK CANADA
BISENI SAMABRI FOD NIGERIA TEMPA ROSSA ITALY
CAESAR/TONGA USA VAL D’AGRI ITALY
GBARAN UBIE PH 2 NIGERIA
GORGON LNG AUSTRALIA
KASHAGAN PH 2&3 KAZAKHSTAN
PSC volumes shown on a gross basis TRADITIONAL TIGHT/SOUR
LNG GTL
ONSTREAM DEEPWATER HEAVY OIL & EOR
19
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