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Shell + BG Presentation April 8
Shell + BG Presentation April 8
WITH BG GROUP
8 APRIL 2015
ROYAL DUTCH SHELL PLC
8 April, 2015
JORMA OLLILA
CHAIRMAN
ROYAL DUTCH SHELL PLC
8 April, 2015
ANDREW GOULD
CHAIRMAN
BG GROUP PLC
8 April, 2015
8 April, 2015
8 April, 2015
Synergies + high-grading
BC-10, Brazil
Atlantic LNG
The issue of Shell B shares is subject to the conditions set out in the announcement made by Shell dated 8 April, 2015
Based on 90 day trading volume weighted average price per Shell B and per BG share on 7 April, 2015
3 Based on Shell B share closing price on 7 April, 2015
4 Per share impacts assume Brent oil prices 2016 $67/bbl; 2017 $75/bbl; 2018-2020 $90/bbl (all on a 2014 real terms basis)
1
2
8 April, 2015
Atlantic
basin
LNG
Brazil
deep water
Australia
LNG
Shell
BG
Complementary fit
Main BG office locations
Key uplift
* Reported under Rule 28.1 of the Takeover Code: reports can be found in the announcement made by Shell on 8 April, 2015
Copyright of Royal Dutch Shell plc
8 April, 2015
BG impact
million boe/d
Key BG
producing assets
FUTURE
OPPORTUNITIES1
RESOURCES
PLAYS
DEEP WATER
INTEGRATED
GAS
UPSTREAM
ENGINE
Kazakhstan
2%
Lower 48
(9)%
Brazil
Growth priorities:
12%
New equity
supply + trading
18%
27%
Upstream engine:
North Sea
Asia
Africa
South America
ROACE 2014
Longer term:
Combination
(2014 pro-forma)
8 April, 2015
QG4
Pearl GTL
Sakhalin
Pluto LNG
North Rankin
Repsol LNG
Earnings + ~470%
Earnings
CFFO
ROACE (RHS)
Downstream
engine
Upstream engine
Deep water
Resources plays
Future opportunities
2014 ROACE (%)
8 April, 2015
Nigeria LNG
Sakhalin
10
Shell
BG
Combination
Equity LNG
liquefaction
capacity (mtpa)
26
33
LNG delivered
volumes (mtpa)
Regas terminals
(#)
UK
Cove Point
Elba
Sabine Pass
34
11
45
Baja
Lake Charles
Altamira
QG-4
Egypt
Nigeria
Equatorial
Guinea
Atlantic LNG
Sakhalin
Spain
Oman
Hazira
Singapore
Malaysia
LNG Peru
Gorgon
Shell
Shell regasification
BG equity LNG
BG regasification
BG LNG offtake
Overlap
Brunei
Prelude
NWS
Pluto
QCLNG
Shell and
BG
combined
2014
2018
8 April, 2015
11
Upstream gas
Shell
BG
Overlap
BG LNG offtake
Pre-FID
LNG in Canada
Upstream gas
W. Canada gas
Appalachia
Gulf
Coast options
Haynesville
Sabine Pass
Elba
Lake Charles
North America
Nigeria
NLNG
Venezuela
Atlantic basin
Elba
Sabine Pass
Shell
BG
Overlap
BG LNG offtake
Pre-FID
Atlantic LNG,
Trinidad + Tobago
Trading opportunities
Equatorial
Guinea
8 April, 2015
12
Queensland
Australia - Queensland
Prelude
Browse
Gorgon
BG Bowen
Shell Bowen
QCLNG
Arrow Energy
BG:
~8 mtpa: QCLNG
ramping up (BG average
interest 73.8%)
BG Surat
Shell Surat
Shell:
Upstream gas
Shell
BG
Pre-FID
Tanzania
Tanzania
Shell:
exploration
BG:
greenfield LNG
tcf discovery (100%)
BG 60%, operator
LNG plant in pre-FEED
16
Shell
BG
MoU for
potential
LNG site
Block 04
Block 03
Block 01
8 April, 2015
13
CFFO in billion $
Downstream
engine
Upstream engine
Deep water
Resources plays
Future opportunities
ROACE (%)
2014
size of bubble represents 2014
year-end capital employed
8 April, 2015
GOM
Nigeria
Brazil
Malaysia
14
Bijupir-Salema: 2003
BC-10: 2009
2014: 52 kboe/d
8 April, 2015
15
BC-10
Production
thousand boe per day
Bijupir-Salema
Shell:
3 exploration
/appraisal wells
drilled
8-12 billion boe
potential (ANP)
Source IHS
BM-S-54
Lapa
(30%)
BG:
On-stream ~78 kboed 2014
New FPSOs + growth
3.5 billion boe potential (BG
share)
Iara
(25%)
Lula
(25%)
Shell
BG
Combination
Libra
Sapinho
(30%)
8 April, 2015
16
Shell
BG
BG*
(kboe/d)
Shell
(kboe/d)
UK
105
90
Norway
28**
160
Bolivia
48
India
18
Thailand
39
Tunisia
32
Other
1,132
270
1,382
overlap
new production
for Shell
Integrated gas
Downstream
engine
Upstream engine
Deep water
Resources plays
Future opportunities
8 April, 2015
17
Impact of BG combination
Grow
Fix
Attractiveness
160 kboe/d
start-ups +
LNG
Restructuring
~$77 billion
capital employed
Growth, returns,
scale
Exit
New
Marks
~$17 billion
asset sales
e.g. Iraq,
Nigeria onshore
Heavy oil
Resources plays
Resilience
Performance
and risk
8 April, 2015
18
SIMON HENRY
CHIEF FINANCIAL OFFICER
ROYAL DUTCH SHELL PLC
8 April, 2015
19
Equity increase:
BC-10, Brazil
8 April, 2015
20
Proved reserves
Production
million boe
million boe/d
+20%
+25%
Shell/
BG*
Shell/
BG
ROACE
$ billion
+15%
Shell
Combination
Shell/
BG
Shell
BG
other majors
* Shells reserves are calculated on a SEC basis and BGs 1P reserves are calculated on a PRMS basis, as published by the SPE
ROACE underlying: European companies: CCS basis excluding identified items. US companies: as reported earnings excluding special non-operating items
Copyright of Royal Dutch Shell plc
8 April, 2015
21
Dividend policy
1. Debt reduction
2. Dividends
Financial Framework
Cash
performance
Pay-out
Investment
Balance
sheet
8 April, 2015
22
Synergies
~$2.5 billion in
2018*
Asset sales
~$30 billion
2016-2018
Additional upside
potential
Capital
investment
Reduce organic
spend <$40 billion
2016
Growth
Shell programmes
Reduce exploration
spend
* Reported under Rule 28.1 of the Takeover Code: reports can be found in the announcement made by Shell on 8 April, 2015
Copyright of Royal Dutch Shell plc
8 April, 2015
23
SG&A
Procurement
Marketing &
shipping
Reduced costs
presence in 15 countries
Shell + BG capabilities
$ billion
Reducing
Includes
exploration activity
identified synergies
Shell
BG
8 April, 2015
Combination
24
$ billion
Shell
Combination
8 April, 2015
25
$ billion
Shell (organic)
BG
Combination
8 April, 2015
26
$ billion
Longer term1
Review + reduce
Shell
2014
Deep water
Growth
priorities
Integrated
Gas
Downstream
+
upstream
engine
CFFO potential
~ 2020
Restructuring +
selective growth
Iraq, Nigeria onshore (SPDC), Kazakhstan, Arctic, heavy oil, resources plays.
8 April, 2015
27
$ billion
Track
record
Expected
dividend
2015 $1.88/share
Scrip
Dividends announced
Shell buybacks
$ billion
Buyback
Offset
Financed
Buybacks (cumulative)
* Subject to progress with debt reduction and Brent oil prices recovering towards the middle of Shells long term planning range of $70-$90-$110/bbl
Copyright of Royal Dutch Shell plc
8 April, 2015
28
EXPECTED TIMELINE
Early 16:
2016:
2017-2020:
8 April, 2015
29
8 April, 2015
30
PRIORITIES 2015+
Shell priorities unchanged
Competitive financial
performance
Capital efficiency
Project delivery
Shell 2015+
8 April, 2015
2016/17 growth
Deep water + LNG priority
BG combination
Accelerates strategy
~$30 billion asset sales
~$25 billion buyback
Shell capabilities + BG
assets
31
8 April, 2015
Synergies + high-grading
32
8 April, 2015
33
8 April, 2015
34
RECOMMENDED COMBINATION
WITH BG GROUP
8 APRIL 2015
ROYAL DUTCH SHELL PLC
8 April, 2015
35