DELIVERY & GROWTH FIVE-YEAR FACT BOOK - Shell

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REVIEW OF THE YEAR OUR STRATEGY Maintaining safe and sustainable operations is our top priority. Long-term supply-demand fundamentals in oil and gas create a positive investment climate for Shell. The company is well positioned in upstream and downstream heartlands today, and we are rejuvenating the portfolio with long-term investments to create long-term shareholder value. Our ambitious capital spending programme is focused on upstream, with some 1 million boe/d of production and 6.5 mtpa of LNG capacity under construction, and measured growth in capital employed. In downstream, we have a more concentrated investment programme, with some 0.3 million b/d of new refining capacity under construction, and selected growth in petrochemicals and marketing. LONG-TERM INDUSTRY FUNDAMENTALS [A] billion toe 18 12 6 1980 2000 Oil [B] Gas [B] Coal Nuclear Hydro 2015 2030 [A] Source World Energy Outlook 2008, IEA. [B] Shell activity. Biomass/waste [B] Other renewables [B] LONG-LIFE SHELL ASSETS UNDER DEVELOPMENT million boe/d 1.2 0.6 Long-life Other 4 Shell Financial and Operational Information 2004–2008 INDUSTRY DOWNTURN INTO 2009 $/b Refining $/b 120 12 80 8 40 4 Global refining margin Brent Our strategy is underpinned by strong capital discipline, integration across the company, and industry-leading investment in technology. Upstream, Shell had some 3.2 million boe/d of oil and gas production in 2008, from 37 countries, generating among the highest cash margins in the industry. New capacity is under construction to offset natural field decline, which is running at some 5% per year. This new capacity covers a range of technology themes: deep water, LNG, tight gas, GTL, heavy oil and traditional plays. Our new positions under construction, in a global portfolio, will more than offset the natural decline of today’s heartlands fields, and deliver growth early in the next decade, to 2012. INDUSTRY COST DEVELOPMENT Upstream cost index (2000=100) [A] 2003 2004 2005 2006 2007 2008 2003 2004 2005 2006 2007 2008 PRODUCTION IMPACT OF SHELL KEY START-UPS million boe/d 2008 2009–10 2011–12 2013+ 2008 2009–10 2011–12 2013+ 1.2 0.6 2007–08 Start-ups 2009–10 Start-ups 2011–12 Start-ups 2013+ Start-ups 250 200 150 100 Sakhalin Salym Ormen Lange Kashagan Corrib Shell key project FID [A] CERA/IHS Changbei Afam Gbaran Ubie Gjoa Bonga NW Angel Perdido BC-10 Ursa QG4 Pearl SHELL OIL AND GAS PRODUCTION million boe/d 4 2 00 02 Gas Oil Disposal Europe North America Middle East, Russia, CIS AOSP Exp 1 North Rankin B Gumusut-Kakap Pluto (Woodside) 04 06 08 11–12 11–12 Africa Asia-Pacific Other
Downstream, Shell has a refining and chemicals portfolio concentrated in the USA, Europe, Asia-Pacific and the Middle East, with global marketing and trading activities in oil products and petrochemicals. New refining capacity is under construction at Port Arthur in the US Gulf Coast, and in Qatar with Pearl GTL. New petrochemicals facilities are under construction at Shell’s Bukom refinery in Singapore. The investments will increase refining capacity by some 7% in 2012, compared to 3.9 million b/d at the end of 2008. This industry-leading portfolio of new projects offers attractive returns to shareholders. Projects that are post-final investment decision and are now under construction will have higher unit cash flow than the portfolio today, with development costs of around $7 per boe of resources, including LNG, GTL and oil sands facilities. The industry has seen strong inflation in supply chain costs across 2007–2008. To mitigate these costs, and meet the challenges of maintaining capital spending, Shell has slowed down the launch of new projects in 2008 and early 2009. This protects shareholders from cost inflation, and creates the opportunity to launch projects at a later stage, potentially when industry costs are more attractive. The company is following a value creation strategy, and is therefore not targeting precise growth rates beyond 2012. Looking at potential beyond 2012, Shell has leading positions in global exploration – which has averaged annually over 1 billion boe of new resources additions this decade – alongside North America tight gas and heavy oil, and new LNG, notably in Australia. Shell has some 1 million boe/d of new projects under design, which could underpin further upstream growth to 2020, subject to the timing of new investment decisions. SHELL REFINING CAPACITY million boe/d 5 2.5 00 02 Refining and GTL Disposal 04 06 08 11–12 11–12 Europe North America Middle East/ Asia-Pacific Other PROFITABILITY OF NEW SHELL PROJECTS IRR% 30 20 10 $50/b IRR/Profitability – Portfolio averages Post-FID key projects 2008–12 start-ups Includes GTL, oil sands upgrader, LNG liquefaction, refining, chemicals. Shell aims to maintain a through-cycle capital spending programme, to ensure the safe and reliable operation of assets, and the right levels of investment for future growth. Capital discipline underpins the financial strategy of the company. Shell has a long history of creating competitive returns for shareholders, driven by strong financial performance from the portfolio, a long-term conservative balance sheet, and global portfolio management. So far this decade, Shell has sold some 0.9 million b/d or around 20% of the refining capacity; and 0.3 million boe/d, or 9% of the upstream portfolio at the end of 2008. Asset sales in upstream have been dominated by late-life fields, and in downstream by smaller refineries lacking access to Shell marketing positions, and marketing portfolios with limited growth potential. These disposals come alongside a continuous focus on cost structure, and ensuring the best prices from third-party supply chains. Shell will continue to look for opportunities to sell non-core assets to create value for shareholders. Acquisitions also play an important role in strategy. In recent years, the company has made selective acquisitions, typically in underdeveloped oil and gas resources, or downstream positions in growth markets, where Shell can add value with integration, investment, technology and scale. Examples include North America heavy oil and tight gas positions, and growth downstream in China and Eastern Europe. Technology is at the heart of Shell’s strategy, with research and development spending in 2008 of $1.3 billion, the highest in our industry. Our technology investment focuses on safe and reliable operations today, and differentiated applications for future growth, where Shell can offer unique and creative solutions to industry challenges, for example in integrated gas, deep water, and exploration. With this multi-pronged approach, Shell continues to create shareholder value with investments for the long term. $70/b $90/b Others Long-life projects 0.5 1 1.5 2 0.5 1 1.5 2 30 20 10 Traditional Profitability index Profitability index Deep-water Integrated gas Downstream Oil sands IRR/Profitability – Thematic averages 2004–05 Environment: ~$50/b crude and ~$10/b USGC 2006–07 Environment: ~$70/b crude and ~$15/b USGC 2007–08 Environment: ~$90/b crude and ~$13/b USGC Shell Financial and Operational Information 2004–2008 5
Page 1 and 2: oyal dutch shell p l c financial an
Page 3 and 4: OUR BUSINESS MINING OIL SANDS ON AN
Page 5: MARKET OVERVIEW PRICE AND MARGIN IN
Page 9 and 10: SHARE INFORMATION CLASS A AND CLASS
Page 11 and 12: FINANCIAL CALENDAR FINANCIAL CALEND
Page 13 and 14: KEY DEVELOPMENT PROJECTS UNDER CONS
Page 15 and 16: ENHANCED OIL RECOVERY When an oil f
Page 17 and 18: DOWNSTREAM TECHNOLOGY GAS TO LIQUID
Page 19 and 20: CONSOLIDATED BALANCE SHEET $ millio
Page 21 and 22: ADDITIONAL SEGMENTAL INFORMATION [A
Page 23 and 24: EARNINGS BY BUSINESS SEGMENT $ mill
Page 25 and 26: QUARTERLY CCS EARNINGS BY BUSINESS
Page 27 and 28: FINANCIAL RATIOS 2008 2007 2006 200
Page 29 and 30: CAPITAL EMPLOYED [A] (At December 3
Page 31 and 32: EMPLOYEES Shell employs 102,000 peo
Page 33 and 34: HIGHLIGHTS • Production of 3.2 mi
Page 35 and 36: SIGNIFICANT 2008 EXPLORATION ACREAG
Page 37 and 38: LNG LEADERSHIP mtpa, year-end capac
Page 39 and 40: EUROPE HIGHLIGHTS • Shell’s Eur
Page 41 and 42: SWEDEN Shell was awarded an explora
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Page 45 and 46: A " " Coalinga Coalinga San Ardo Sa
Page 47 and 48: OTHER AMERICAS BRAzIL Shell Brazil
Page 49 and 50: NIGERIA Shell is the largest intern
Page 51 and 52: C PORTUGAL D MAURITANIA MAURITANIA
Page 53 and 54: Shell participates in the developme
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C BLOCK BLOCK XV XV JORDAN JORDAN S
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ASIA-PACIFIC HIGHLIGHTS • Shell
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A Goodwyn Goodwyn Goodwyn South Goo
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F IPOH IPOH THAILAND THAILAND 0 25
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OIL AND GAS ACREAGE [A][B][C] (At D
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EARNINGS FROM OIL AND GAS EXPLORATI
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PROVED AND PROVEN RESERVES CHANGES
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OIL, GAS AND OIL SANDS PRODUCTION C
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GAS & POWER DATA LNG REGASIFICATION
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HIGHLIGHTS • Refinery availabilit
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SUPPLY AND DISTRIBUTION Supply and
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LUBRICANTS Lubricants is part of Sh
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TRADING Shell Trading comprises a n
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LOCATION, PERCENTAGE OF SHELL INTER
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REVENUE AND SHIPPING REVENUE $ mill
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MANUFACTURING LOCATIONS LOCATION AN
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BIOFUELS Shell is one of the world
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COnTaCT InfORmaTIOn REGISTERED OffI
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DELIVERY & GROWTH FIVE-YEAR FACT BOOK - Shell

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