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18 Shell Investors’ Handbook Upstream INTEGRATED GAS Shell integrated gas projects that came on-stream over the past few years include Pearl GTL, Pluto LNG Train 1 (Woodside), Qatargas 4 and Sakhalin-2. The Prelude floating LNG project as well as the Greater Western Flank Phase 1, Gorgon, North Rankin 2 and Wheatstone projects are currently under construction and are expected to come on-stream within the next few years. Shell has also started considering GTL and LNG options to monetise natural gas in North America. These would be projects that involve the entire natural gas value chain and so play very much to Shell’s strengths as an integrated player, but they are still in very early stages of assessment. Integrated gas earnings are part of the Upstream segment and incorporate LNG (including LNG marketing and trading) and GTL operations. In addition, the associated upstream oil and gas production activities from the projects Sakhalin-2, North West Shelf, Pluto LNG Train 1 (Woodside), Qatargas 4 and Pearl GTL are included in integrated gas earnings, as well as power GLOBAL BAL B AL LNG LLNG NG PORTFOLIO PPORTFOLIO ORTFO I [A] A] KEY �� LNG NG – i in n o operation p pe at o �� LNG NG – under uunder nde construction cconstruction o t uc io �� Regasifi fication – in operation [A] As of March 2012. generation and coal gasification activities. In 2011, integrated gas accounted for around 30% of our Upstream earnings. LNG Our expertise in the LNG industry is based on the more than 45 years of technical advice that we have provided for gas liquefaction plants around the world – including the world’s first commercial plant, GLOBAL LNG CAPACITY GROWTH mtpa 50 25 0 Current On-stream Under construction Options Gorgon T1-3 NIGERIA LNG Wheatstone and Prelude Others ~2020+ which came on-stream in 1964 in Algeria. LNG is fast becoming a truly global commodity and will continue its rapid expansion in the years ahead, with global demand potentially doubling in the next decade. This will be driven by the growing gas import needs of China, India, the Middle East and Europe – but also by new importers such as Malaysia, the Philippines, Singapore, Thailand and Vietnam. LNG LEADERSHIP [A] year-end mtpa 30 20 10 0 QATARGAS 4 MALAYSIA LNG Shell ExxonMobil Chevron 2011 2017 BG [A] Projects in operation or under construction. OMAN LNG AND QALHAT LNG BRUNEI LNG Total SAKHALIN-2 PRELUDE FLNG PLUTO (WOODSIDE) GORGON WHEATSTONE NORTH WEST SHELF BP
At Shell, we are proud of our leadership in this sector of the industry. In recent years, ventures in which Shell participated have supplied as much as 30% of global LNG. We have around 21 mtpa of Shellshare liquefaction capacity currently in operation in Australia, Brunei, Malaysia, Nigeria, Oman, Qatar and Russia. Qatargas 4, a joint venture between Qatar Petroleum (70%) and Shell (30%), was brought on-stream in early 2011 with a single mega train delivering approximately 7.8 mtpa of LNG and a peak production of 280 thousand boe/d. The project opened up new markets for Qatari LNG in China and Dubai, with agreements signed in 2008. Our total LNG sales volume in 2011 was 18.8 million tonnes – up 12% from 2010. This increase mainly reflected the increase in sales volumes from Qatargas 4. Sales volumes were also higher from Nigeria LNG, helped by a stable gas supply, and from the Sakhalin-2 project, where production reached 10 mtpa. These increases were partly offset by the reduction in the Shell share of LNG production from Woodside Petroleum Ltd – the result of Shell’s sale of part of its shareholding in the company in November 2010. During 2011, total LNG sales contracts were signed for some 6 mtpa. These longterm contracts of up to 25 years are linked to oil prices and will be fulfilled by Shell’s global LNG portfolio. At an oil price of $110 per barrel the contracts would deliver revenues of around $100 billion on an undiscounted basis. Three LNG projects are currently under construction in Australia, totalling around 7 mtpa: Prelude FLNG (Shell interest 67.5%), Gorgon Trains 1-3 (25%) and Wheatstone (6.4%). We are also assessing an additional 15 mtpa in future options with projects involving Arrow Energy, Gorgon Train 4 and the Browse and Greater Sunrise fields offshore Australia as well as the Abadi field of Indonesia. FLOATING LNG We believe that floating liquefied natural gas (FLNG) will write the next chapter in the history of the industry. In the coming years, Shell will start to produce and liquefy natural gas at sea, enabling the development of gas resources ranging from clusters of smaller and more remote offshore fields to potentially larger fields. FLNG can open up new business opportunities for countries looking to develop their natural gas resources. Shell Investors’ Handbook Upstream www.shell.com/preludefl ng_video In May 2011, Shell announced the world’s first final investment decision to build an FLNG facility. The facility will be used to develop the Prelude gas field, 200 km off Australia’s north-west coast (see also page 9). LNG FOR TRANSPORT LNG has the potential to provide real economic and environmental benefits for operators of fleets of large, heavy-duty trucks, ships and trains. As a transport fuel, it lowers emissions of sulphur, particulates and nitrogen oxides, and the energy density of LNG means that it can offer the distance range that operators need. The potential cost advantage in using gas rather than oil products can reduce the payback time for investment in infrastructure, and LNG used in trucks and other heavy duty vehicles can mean quieter traffic, which � The Prelude FLNG facility will be the largest offshore facility in the world. 19
Page 1 and 2: BUILDING AN ENERGY FUTURE INVESTORS
Page 3 and 4: INTRODUCTION FROM THE CEO My collea
Page 5 and 6: HIGHLIGHTS 2011 FIRST QUARTER SECON
Page 7 and 8: Shell Investors’ Handbook Summary
Page 9 and 10: FINANCIAL FRAMEWORK assuming that t
Page 11 and 12: KEY PROJECT S UPDATE AOSP DEBOTTLEN
Page 13 and 14: RESULTS 2007-2011 REVENUE $ million
Page 15 and 16: She Sh She Shell ll l In Inve ves e
Page 17 and 18: PHILIPPINES In October 2010, Shell
Page 19: TIGHT GAS AND LIQUIDS-RICH SHALES A
Page 23 and 24: PROVED RESERVES In 2011, Shell adde
Page 25 and 26: AFRICA HIGHLIGHTS � Production am
Page 27 and 28: since October 2001. A pipeline expa
Page 29 and 30: OCEANIA HIGHLIGHTS � Production a
Page 31 and 32: The 2010 drilling moratorium in the
Page 33 and 34: DOWNSTREAM HIGHLIGHTS � Made good
Page 35 and 36: SUPPLY AND DISTRIBUTION A network o
Page 37 and 38: LUBRICANTS For the fifth consecutiv
Page 39 and 40: growth projects with partners and d
Page 41 and 42: In 2011, Shell and Cosan launched t
Page 43 and 44: Shell’s growth profile has recent
Page 45 and 46: CORPORATE SEGMENT The Corporate seg
Page 47 and 48: NORTH- WEST EUROPE ICELAND Corrib "
Page 49 and 50: GABON SAO TOME AND PRINCIPE SÃO TO
Page 51 and 52: SYRIA AND TURKEY [A] ANTALYA Antaly
Page 53 and 54: BRUNEI AND EAST MALAYSIA " " " " "
Page 55 and 56: AMERICAS NORTH-WEST USA Washington
Page 57 and 58: GREENLAND 0 100 200 300 400 km PANA
Page 59 and 60: CONSOLIDATED FINANCIAL DATA Shell I
Page 61 and 62: CONSOLIDATED STATEMENT OF CASH FLOW
Page 63 and 64: Shell Investors’ Handbook Consoli
Page 65 and 66: CAPITAL EMPLOYED [A] (AT DECEMBER 3
Page 67 and 68: UPSTREAM DATA UPSTREAM EARNINGS 201
Page 69 and 70: OIL AND GAS EXPLORATION AND PRODUCT
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2007 $ MILLION Revenue: OIL SANDS U
Page 73 and 74:
Changes The tables present changes
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OIL, GAS, SYNTHETIC CRUDE OIL AND B
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TOTAL PRODUCTION AVAILABLE FOR SALE
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OIL AND GAS ACREAGE [A][B] (AT DECE
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DOWNSTREAM DATA OIL PRODUCTS AND RE
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OIL SALES AND RETAIL SITES OIL PROD
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SHELL SHARE PRODUCTION CAPACITY BY
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DIVIDENDS POLICY Shell’s policy i
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FINANCIAL CALENDAR Financial year e
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ADDRESSES REGISTERED OFFICE Royal D
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