BUILDING AN ENERGY FUTURE INVESTORS’ HANDBOOK ROYAL DUTCH SHELL PLC FINANCIAL AND 12'4#6+10#.+0(14/#6+10s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ƂPKPINQECVKQPU 19 +PVGITCVGFICU 40 'WTQRG 77 1KNUCNGUCPFTGVCKNUKVGU 21 9KPF 42 #HTKEC 78 %JGOKECNUCPFOCPWHCEVWTKPI 22 'WTQRG 44 #UKC NQECVKQPU 23 #HTKEC 48 1EGCPKC 24 #UKC KPENWFKPI/KFFNG'CUVCPF4WUUKC 49 #OGTKECU 27 1EGCPKC 28 #OGTKECU 80 ADDITIONAL INVESTOR 52 INFORMATION CONSOLIDATED DATA 30 80 5JCTGKPHQTOCVKQP DOWNSTREAM 52 'ORNQ[GGU 81 &KXKFGPFU 53 %QPUQNKFCVGFƂPCPEKCNFCVC 82 $QPFJQNFGTKPHQTOCVKQP 31 /CPWHCEVWTKPI 83 (KPCPEKCNECNGPFCT 32 5WRRN[CPFFKUVTKDWVKQP 32 $WUKPGUUVQ$WUKPGUU $$ 33 4GVCKN 33 .WDTKECPVU 33 .0)HQTVTCPURQTV 34 %JGOKECNU 34 6TCFKPI 34 $KQHWGNU 35 2QTVHQNKQCEVKQPU ABOUT THIS PUBLICATION 6JKU+PXGUVQTUo*CPFDQQMEQPVCKPUFGVCKNGFKPHQTOCVKQPCDQWV QWTCPPWCNƂPCPEKCNCPFQRGTCVKQPCNRGTHQTOCPEGQXGTXCT[KPI VKOGUECNGUHTQOVQ9JGTGXGTRQUUKDNGVJGHCEVU CPFƂIWTGUJCXGDGGPOCFGEQORCTCDNG6JGKPHQTOCVKQP KPVJKURWDNKECVKQPKUDGUVWPFGTUVQQFKPEQODKPCVKQPYKVJVJG PCTTCVKXGEQPVCKPGFKPQWT#PPWCN4GRQTVCPF(QTO( #NNKPHQTOCVKQPHTQOVJKUCPFQWTQVJGTTGRQTVUKUCXCKNCDNGHQT QPNKPGTGCFKPICPFFQYPNQCFKPICVJVVRTGRQTVUUJGNNEQO #NKUVQHCDDTGXKCVKQPUWUGFKPVJKUJCPFDQQMECPDGHQWPFQP VJGKPUKFGDCEMEQXGT reports.shell.com | Shell Investors’ Handbook 1 INTRODUCTION FROM THE CEO “SHELL HAS THE SCALE AND PORTFOLIO CHOICES TO MANAGE A THROUGH-CYCLE INVESTMENT STRATEGY FOR SUSTAINABLE GROWTH. INNOVATION AND A COMPETITIVE MINDSET IS AT THE HEART OF WHAT WE DO.” At Shell we recognise the importance of demand as the population grows and living communicating with investors, ensuring standards rise, especially in fast-growing that they understand the Company, its economies. We estimate that by 2050, progress and its plans for the future. Our world energy demand could rise as much Investors’ Handbook plays an important as 80% from current levels. Innovation role. It includes fi nancial data going back and technology will be vital in accessing fi ve years, giving a broad view of the and transporting harder-to-reach resources Company, and explains our businesses and as more available forms of energy are operations. Importantly, it explains how depleted. Shell has the scale and portfolio our businesses work together to provide choices to manage a through-cycle enduring advantages. investment strategy for sustainable growth. Innovation and a competitive mindset is at In 2012, we made good progress in the heart of what we do. improving our performance, and we are on target to meet our strategic objectives. Our work in natural gas, which now Our 2012 earnings on a current cost of accounts for nearly 50% of our production, supplies basis were $27 billion. Cash provides an example. We see integrated fl ow from operating activities was $46 gas, comprising LNG and GTL, as a billion, or $43 billion excluding working particular area with future growth potential. capital movements. Net capital investment Our Pearl GTL plant illustrates our ability amounted to $30 billion, as we build a to create and operate very large scale solid foundation for future growth. projects working with national partners. Its output of fuels and other liquid products We produced 3.3 million barrels of made from natural gas help Qatar diversify oil equivalent per day in 2012, up its national revenues. 3% from 2011 excluding the effect of divestments and exits. There were important In 2012, we cut the fi rst steel for the hull contributions from our Pearl GTL plant in of our fl oating LNG facility for the Prelude Qatar, which is now ramped up, and the gas fi eld offshore Australia. It will liquefy Pluto LNG Project in Australia, through our gas far out at sea and deliver it to tankers participation in Woodside Petroleum Ltd. for export. By eliminating the need for Our equity LNG sales volumes of 20.2 pipelines to shore, it will demonstrate a million tonnes were up 7% compared with concept that could help us reach remote gas 2011. fi elds elsewhere in the world. Over the past three years our growth To conclude, we are making good progress rates in earnings per share and operating towards our objectives. We continue cash fl ow have surpassed those of our to work hard to improve our operating competitors. And we continue to focus on performance, and we have clear strategic further improving our competitiveness. priorities to drive growth and value for our shareholders. I hope you will fi nd plenty of Our recent progress means that the growth information on these plans in this Investors’ agenda set out at the beginning of 2012 is Handbook. on track. Peter Voser Looking to the future, the world faces Chief Executive Offi cer the challenge of meeting rising energy 103585_SHE_Investors Handbook_V98_Cleaned_JD.indd 1 08-05-13 14:51 COMPANY OVERVIEW OUR BUSINESSES UPSTREAM INTERNATIONAL Upstream International manages the Upstream businesses outside the Americas. It explores for and recovers crude oil, natural gas and natural gas liquids, liquefi es and transports gas, and operates the upstream and midstream infrastructure necessary to deliver oil and gas to market. Upstream International also manages Shell’s LNG and GTL businesses. Since January 2013, it manages its operations primarily by line of business, with this structure overlaying individual country organisations. This organisation is supported by activities such as Exploration and New Business Development. Previously activities were organised primarily by geographical location. UPSTREAM AMERICAS Upstream Americas manages the Upstream businesses in North and South America. It explores for and recovers crude oil, natural gas and natural gas liquids, transports gas and operates the upstream and midstream infrastructure necessary to deliver oil and gas to market. Upstream Americas also extracts bitumen from oil sands that is converted into synthetic crude oil. Additionally, it manages the US-based wind business. It manages its operations by line of business, supported by activities such as Exploration and New Business Development. DOWNSTREAM Downstream manages Shell’s refi ning and marketing activities for oil products and chemicals. These activities are organised into globally managed classes of business, although some are managed regionally or provided through support units. Refi ning includes manufacturing, supply and shipping of crude oil. Marketing sells a range of products including fuels, lubricants, bitumen and liquefi ed petroleum gas (LPG) for home, transport and industrial use. Chemicals produces and markets petrochemicals for industrial customers, including the raw materials for plastics, coatings and detergents. Downstream also trades Shell’s fl ow of hydrocarbons and other energy-related products, supplies the Downstream businesses, governs the marketing and trading of gas and power, and provides shipping services. Additionally, Downstream oversees Shell’s interests in alternative energy (including biofuels but excluding wind) and CO2 management. PROJECTS & TECHNOLOGY Projects & Technology manages the delivery of Shell’s major projects and drives the research and innovation to create technology solutions. It provides technical services and technology capability covering both Upstream and Downstream activities. It is also responsible for providing functional leadership across Shell in the areas of safety and environment, and contracting and procurement. 103585_SHE_Investors Handbook_V98_Cleaned_JD.indd 2 08-05-13 14:51 reports.shell.com | Shell Investors’ Handbook 3 Company overview BUILDING AN ENERGY FUTURE Global energy demand is rising and so are consumer expectations – more people want energy from cleaner sources. At Shell we work with others to unlock new energy sources and squeeze more from what we have. We do this in responsible and innovative ways. In building a better energy future we all have a part to play. Shell is doing its part. Producing oil Extracting Exploring for oil and gas bitumen and gas Mining Refining oil oil sands into fuels and lubricants Producing petrochemicals Supply and Developing distribution fi elds Shipping and trading Converting gas to liquid products (GTL) Producing biofuels Shipping and trading Liquefying gas by cooling (LNG) Generating wind power B 2B sales CHEMICAL Regasifying PRODUCTS Retail sales LNG for plastics, Retail sales coatings, detergents B 2B sales FUELS AND LUBRICANTS for transport SHELL IS AN GAS for cooking, heating, INNOVATION-DRIVEN electrical power GLOBAL GROUP OF ENERGY AND PETROCHEMICAL COMPANIES. 103585_SHE_Investors Handbook_V98_Cleaned_JD.indd 3 08-05-13 14:51 4 Shell Investors’ Handbook | reports.shell.com Company overview HIGHLIGHTS 2012 FIRST Appraisal success at Appomattox discovery CNPC and Shell sign fi rst shale gas production QUARTER Shell announced a successful appraisal operation at sharing contract in China its Appomattox discovery in deep water in the Gulf CNPC and Shell signed a production sharing contract of Mexico with resources potential of about 500 for shale gas exploration,