2nd Quarter and Half Year 2013 Unaudited Results

ROYAL DUTCH SHELL PLC 2ND QUARTER AND HALF YEAR 2013 UNAUDITED RESULTS * Royal Dutch Shell's second quarter 2013 earnings, on a current cost of supplies (CCS) basis (see Note 1), were $2.4 billion compared with $6.0 billion in the same quarter a year ago. Second quarter 2013 earnings included an identified net charge of $2.2 billion after tax, mainly reflecting impairments (see page 6). * Second quarter 2013 CCS earnings excluding identified items (see page 6), were $4.6 billion and included a combined negative impact of $0.7 billion after tax related to the impact of the weakening Australian dollar on a deferred tax liability and the impact of the deteriorating operating environment in Nigeria. Compared to the second quarter 2012, CCS earnings excluding identified items were also impacted by higher operating expenses and depreciation as well as increased exploration well write-offs. Second quarter 2012 CCS earnings excluding identified items were $5.7 billion. * Basic CCS earnings per share excluding identified items decreased by 21% versus the same quarter a year ago. * Cash flow from operating activities for the second quarter 2013 was $12.4 billion, compared with $13.3 billion in the same quarter last year. Excluding working capital movements, cash flow from operating activities for the second quarter 2013 was $8.4 billion, compared with $9.5 billion in the second quarter 2012. * Capital investment for the second quarter 2013 was $11.3 billion. Net capital investment (see Note 1) for the quarter was $10.9 billion. * Total dividends distributed in the quarter were $2.8 billion, of which some $0.8 billion were settled under the Scrip Dividend Programme. During the second quarter some 56.2 million shares were bought back for cancellation for a consideration of $1.9 billion. * Gearing at the end of the second quarter 2013 was 10.3% (see Note 2). * A second quarter 2013 dividend has been announced of $0.45 per ordinary share and $0.90 per American Depositary Share ("ADS"), an increase of 5% compared with the second quarter 2012. SUMMARY OF UNAUDITED RESULTS Quarters $ million Half year Q1 Q2Q2 2013 2013 20121 %2 2013 20121 % Income attributable to1,737 8,176 4,083 -57 shareholders 9,913 12,820 -23 Current cost of supplies (CCS)657 (225) 1,901 adjustment for Downstream 432 841 2,394 7,951 5,984 -60 CCS earnings 10,345 13,661 -24 (2,206) 431 245 Less: Identified items3 (1,775) 625 CCS earnings excluding identified4,600 7,520 5,739 -20 items 12,120 13,036 -7 Of which: 3,526 5,648 4,527 Upstream 9,174 10,797 1,168 1,848 1,296 Downstream 3,016 2,418 Corporate and Non-controlling(94) 24 (84) interest (70) (179) Cash flow from operating12,444 11,559 13,305 -6 activities 24,003 26,744 -10 0.38 1.26 0.96 -60 Basic CCS earnings per share ($) 1.64 2.19 -25 0.76 2.52 1.92 Basic CCS earnings per ADS ($) 3.28 4.38 Basic CCS earnings per share0.73 1.19 0.92 -21 excl. identified items ($) 1.92 2.09 -8 Basic CCS earnings per ADS excl.1.46 2.38 1.84 identified items ($) 3.84 4.18 0.45 0.45 0.43 +5 Dividend per share ($) 0.90 0.86 +5 0.90 0.90 0.86 Dividend per ADS ($) 1.80 1.72 1 Restated for accounting policy change (see Note 2) 2 Q2 on Q2 change 3 See page 6 Royal Dutch Shell Chief Executive Officer Peter Voser commented: "Our cash flow pays for Shell's dividends and investment in new projects toensure affordable and reliable energy supplies for our customers, and to addvalue for our shareholders." Shell's underlying CCS earnings were $4.6 billion for the quarter, a 21%decrease in CCS earnings per share from the second quarter of 2012. "Higher costs, exploration charges, adverse currency exchange rate effects andchallenges in Nigeria have hit our bottom line. These results were underminedby a number of factors - but they were clearly disappointing for Shell",continued Voser. Oil theft and disruptions to gas supplies in Nigeria are causing widespreadenvironmental damage, and could cost the Nigerian government $12 billion inlost revenues per year. "We will play our part, but these are problems Shellcannot solve alone," Voser said. "We've made substantial improvements to our portfolio in the last few years.Today, Shell is rich with new investment opportunities and is capitalconstrained - the opposite position to where the company was in the middle ofthe last decade." "Shell is investing in new capacity worldwide, to generate profitable growthfor shareholders. In the next 18 months we expect to see five major projectstart-ups, which should add over $4 billion to our 2015 cash flow1. We've embedded rigorous portfolio management into Shell, to improve our capitalefficiency and refresh the portfolio for growth. We have completed some $21billion of divestments in the last three years and some $4 billion in the last12 months alone, with more to come. Shell is entering a new phase of more substantial portfolio change, which willlead to a higher rate of divestments in the coming years. We have recently launched strategic portfolio reviews in both Nigeria onshoreand North America resources plays, which will lead to further focus anddivestments there, as we continue to shape the company for the future. Our strategy is to deliver sustainable growth in cash generation through thebusiness cycle, underpinning Shell's competitive dividends and returns. We arenot targeting oil and gas production volumes; rather we are focusing onfinancial performance." Voser concluded, "Shell's sustained investment in new growth projects willdrive our financial performance. Dividends are Shell's main route for returningcash to shareholders and we have distributed more than $11 billion of dividendsin the last 12 months. So far this year, we have repurchased more than $3billion of shares, and we are on track for $4-5 billion of share buy-backs in2013. This underlines our commitment to shareholder returns." 1 Projects comprised of Mars B and Cardamom in deep-water Gulf of Mexico,Gumusut-Kakap in deep-water Malaysia, Kashagan Phase 1 in Kazakhstan and thecompletion of the acquisition of part of Repsol S.A.'s LNG portfolio. Cash flowfrom operations addition outlook assumes that the Brent oil price is $100 perbarrel. SECOND QUARTER 2013 PORTFOLIO DEVELOPMENTS1 Upstream In Abu Dhabi, Shell was selected by the Abu Dhabi National Oil Company toparticipate in a 30-year joint venture (Shell interest 40%) to develop the Babsour gas reservoirs in the Emirate of Abu Dhabi. The two companies will nowenter a period of commercial and technical work leading to the development ofthe Bab sour gas reservoir, potentially for 0.5 billion standard cubic feet perday ("scf/d") of sales gas. In Indonesia, Shell acquired an additional 5% interest in the Masela block inthe Arafura Sea, increasing its interest to 35%. The Masela production-sharingcontract ("PSC") contains the Abadi gas discovery, for which a 2.5 milliontonnes per annum ("mtpa") floating LNG facility is in the front-end engineeringand design ("FEED") phase. In Iraq, the Basrah Gas Company ("BGC"), a 25-year incorporated joint venture(Shell interest 44%), officially commenced operations. BGC captures associatedgas that is currently being flared from three oil fields in southern Iraq. BGCwill be dedicated to the rehabilitation and upgrade of current facilities aswell as building new assets, which is expected to increase the productioncapacity from currently 0.4 billion scf/d to potentially 2 billion scf/d. In Nigeria, Shell announced the final investment decisions for the Trans NigerPipeline loop-line ("TNPL") and the Gbaran-Ubie Phase Two projects (Shellinterest 30%), both in the eastern Niger Delta. The TNPL project includesimprovements as a result of which the pipeline will be better protected againstcrude oil theft and sabotage, and additional wells which are expected to addpeak production of some 45 thousand barrels of oil per day ("b/d"). TheGbaran-Ubie Phase Two project consists of five gas supply and infrastructureprojects, with an expected peak production of 215 thousand barrels of oilequivalent per day ("boe/d"), for continued gas supply to Nigeria LNG and theGbaran-Ubie domestic power plant. Shell also announced the intention of a strategic review, consultation withpartners and the potential exit from interests it holds in some further onshoreleases in the eastern part of the Niger Delta, subject to partner andregulatory approvals. The review could lead to divestment of some 80 to 100thousand boe/d of Shell share production. In the Philippines, Shell announced commencement of FEED for an LNG importfacility in Batangas. The floating storage and regasification unit is expectedto have an annual capacity of approximately 4 mtpa. In the United States, Shell announced the final investment decision for theStones deep-water project (Shell interest 100%) in the Gulf of Mexico. Thefirst phase of development has an expected peak production of 50 thousand boe/d. The Stones field was discovered in 2005 in the Gulf of Mexico's LowerTertiary geologic trend. In North American resources plays, a strategic review of Shell's portfolio isunderway, following recent acreage build and well results. This strategicreview will lead to divestments and a refocusing of investment into fewerplays, with growth potential. During the second quarter 2013, Shell announced the Vicksburg oil discovery(Shell interest 75%) in the deep-water Gulf of Mexico. This discovery adds tothe nearby Appomattox discovery (Shell interest 80%). Shell also participatedin the successful appraisal Zabazaba-4 (Shell interest 50%) offshore Nigeria. As part of its global exploration programme Shell added new acreage positionsduring the second quarter 2013, including offshore positions in the Gulf ofMexico, the Norwegian Barents Sea, the Turkish Black Sea, and in the AustralianExmouth basin. Shell also expanded certain positions in the United KingdomNorth Sea, and onshore Albania. In July, Shell announced the final investment decision for the offshore BC-10Phase 3 project (Shell interest 50%) in Brazil. The project will include theinstallation of subsea infrastructure at the Massa and Argonauta O-Southfields. The project is expected to reach a peak production of 28 thousand boe/d. Shell also announced the final investment decision for a redevelopment atthe offshore Bijupirá/Salema fields (Shell interest 80%), which is expected toboost production to a peak of 35 thousand boe/d. 1 See page 22 for first quarter 2013 portfolio developments. Downstream In Poland, Shell completed the acquisition of Neste Oil Corporation's networkof 105 retail sites. In July, Shell announced it will build a lubricant plant, a grease plant andother related facilities in Tuas, Singapore. When completed, the new plantswill replace Shell's Woodlands plants in Singapore. KEY FEATURES OF THE SECOND QUARTER 2013 * Second quarter 2013 CCS earnings (see Note 1) were $2,394 million, 60% lower than for the same quarter a year ago. Second quarter 2013 earnings included an identified net charge of $2.2 billion after tax, mainly reflecting impairments (see page 6). * Second quarter 2013 CCS earnings excluding identified items (see page 6) were $4,600 million compared with $5,739 million in the second quarter 2012, a decrease of 20%. Second quarter 2013 CCS earnings excluding identified items were reduced by some $450 million due to the impact of the weakening Australian dollar on a deferred tax liability and by at least $250 million impact from the deteriorating operating environment in Nigeria. The combined impact of these items on earnings excluding identified items was $0.7 billion after tax for the second quarter 2013, compared to a $0.1 billion after tax impact in the second quarter 2012. Compared with the second quarter 2012, CCS earnings excluding identified items were also impacted by higher operating expenses and depreciation as well as increased exploration well write-offs. * Basic CCS earnings per share decreased by 60% versus the same quarter a year ago. * Basic CCS earnings per share excluding identified items decreased by 21% versus the same quarter a year ago. * Cash flow from operating activities for the second quarter 2013 was $12.4 billion, compared with $13.3 billion in the same quarter last year. Excluding working capital movements, cash flow from operating activities for the second quarter 2013 was $8.4 billion, compared with $9.5 billion in the same quarter last year. * Net capital investment (see Note 1) for the second quarter 2013 was $10.9 billion. Capital investment for the second quarter 2013 was $11.3 billion and divestment proceeds were $0.4 billion. Net capital investment for the full year 2013 is expected to be around $40 billion, including some $3 billion of non-cash items. These estimates also include the impact of the agreement to acquire part of Repsol's LNG portfolio, as announced in February 2013. * Total dividends distributed in the second quarter 2013 were $2.8 billion of which $0.8 billion were settled by issuing some 23.6 million A shares under the Scrip Dividend Programme for the first quarter 2013. * Under our share buyback programme some 56.2 million B shares were bought back for cancellation during the second quarter 2013 for a consideration of $1.9 billion. * Return on average capital employed (see Note 9) on a reported income basis was 12.1% at the end of the second quarter 2013. * Gearing was 10.3% at the end of the second quarter 2013 versus 8.6% at the end of the second quarter 2012 (see Note 2). * Oil and gas production for the second quarter 2013 was 3,062 thousand boe/ d, a decrease of 1% compared with the second quarter 2012. The deteriorating operating environment in Nigeria impacted production volumes by some 100 thousand boe/d in the second quarter 2013, and by 65 thousand boe/d compared to the second quarter 2012. Excluding the impact of the deteriorating operating environment in Nigeria, divestments and PSC price effects, second quarter 2013 production volumes were 2% higher than in the same period last year. * Equity LNG sales volumes of 4.68 million tonnes for the second quarter 2013 were 2% higher than in the same quarter a year ago. * Oil products sales volumes for the second quarter 2013 were 2% lower than in the second quarter 2012. Chemicals sales volumes in the second quarter 2013 decreased by 10% compared with the same quarter a year ago. * Comparative information in this Report has been restated following the adoption of revised IAS 19 Employee Benefits on January 1, 2013, with retrospective effect (see Note 2). Comparative information was not restated for other accounting policy changes (see Note 1) for which the impacts are not significant, including the adoption of IFRS 11 Joint Arrangements on January 1, 2013, which results in certain previously equity-accounted entities now in effect being proportionately consolidated. * Supplementary financial and operational disclosure for the second quarter 2013 is available at www.shell.com/investor. SUMMARY OF IDENTIFIED ITEMS Earnings in the second quarter 2013 reflected the following items, which inaggregate amounted to a net charge of $2,206 million (compared with a net gainof $245 million in the second quarter 2012), as summarised in the table below: * Upstream earnings included a net charge of $1,845 million, including impairments of $2,071 million, predominantly related to liquids-rich shales properties in North America, reflecting the latest insights from exploration and appraisal drilling results and production information. This was partly offset by the net impact of fair value accounting of commodity derivatives and certain gas contracts of $69 million, divestment gains of $41 million and other items of $116 million, mainly comprised of the release of a tax provision related to prior years. Upstream earnings for the second quarter 2012 included a net gain of $181 million. * Downstream earnings included a net charge of $365 million, reflecting impairments of $331 million, predominantly related to businesses in Italy, redundancy and restructuring charges of $22 million and other items of $12 million. Downstream earnings for the second quarter 2012 included a net gain of $64 million. * Corporate results and Non-controlling interest included a net gain of $4 million. Earnings for the second quarter 2012 did not include any identified items. SUMMARY OF IDENTIFIED ITEMS Quarters $ million Half year Q2 2013 Q1 20131 Q2 2012 2013 2012 Segment earnings impact of identified items: (1,845) 173 181 Upstream (1,672) 634 (365) (160) 64 Downstream (525) 262 Corporate and Non-controlling4 418 - interest 422 (271) (2,206) 431 245 Earnings impact (1,775) 625 1 See page 23 These identified items are shown to provide additional insight into segmentearnings and income attributable to shareholders. From the first quarter 2013onwards, identified items include the full impact on Shell's CCS earnings ofthe following items: * Divestment gains and losses * Impairments * Fair value accounting of commodity derivatives and certain gas contracts (see Note 8) * Redundancy and restructuring Further items may be identified in addition to the above. Prior periodcomparatives have not been restated. EARNINGS BY BUSINESS SEGMENT UPSTREAM Quarters $ million Half year Q2 2013 Q1 2013 Q2 2012 %2 2013 2012 % Upstream earnings excluding3,526 5,648 4,527 -22 identified items1 9,174 10,797 -15 1,681 5,821 4,708 -64 Upstream earnings1 7,502 11,431 -34 Upstream cash flow from8,143 9,705 9,830 -17 operating activities 17,848 18,618 -4 9,549 7,370 5,293 +80 Upstream net capital investment 16,919 9,065 +87 Liquids production available for1,502 1,640 1,612 -7 sale (thousand b/d) 1,570 1,647 -5 Natural gas production available9,050 11,132 8,647 +5 for sale (million scf/d) 10,085 9,745 +3 Total production available for3,062 3,559 3,103 -1 sale (thousand boe/d) 3,309 3,327 -1 Equity LNG sales volumes4.68 5.15 4.57 +2 (million tonnes) 9.83 9.74 +1 1 Second quarter 2012 and half year 2012 comparatives restated for accountingpolicy change (see Note 2) 2 Q2 on Q2 change Second quarter Upstream earnings excluding identified items were $3,526 millioncompared with $4,527 million a year ago. Identified items were a net charge of$1,845 million, compared with a net gain of $181 million in the second quarter2012 (see page 6). Second quarter 2013 Upstream earnings excluding identified items were reducedby some $450 million due to the impact of the weakening Australian dollar on adeferred tax liability and by at least $250 million impact from thedeteriorating security situation onshore Nigeria and blockade of Nigeria LNG.The combined impact of these items on the second quarter 2013 earnings was $0.7billion after tax, compared to a $0.1 billion after tax impact in the secondquarter 2012. Compared with the second quarter 2012, earnings were also impacted by higheroperating expenses, higher exploration expenses, increased depreciation andlower liquids realisations. Second quarter 2013 operating expenses includedsome $400 million of feasibility expenses for projects in the pre-finalinvestment decision stage. Exploration expenses increased to $1,228 million dueto exploration well write-offs of some $600 million in the second quarter 2013.Compared with the second quarter 2012, earnings benefitted from the ramp-up ofPearl GTL, a dividend from an LNG venture and higher gas realisations. Upstream Americas excluding identified items incurred a loss, mainly as aresult of higher exploration expenses and well write-offs, and increasedoperating expenses. Under current oil and gas price conditions, UpstreamAmericas is expected to remain in a loss position during at least the secondhalf year 2013. Global liquids realisations were 9% lower than for the second quarter 2012. InCanada, synthetic crude oil realisations were 10% higher than for the sameperiod last year. Global natural gas realisations were 17% higher than for thesame quarter a year ago, with a 90% increase in the Americas and a 12% increaseoutside the Americas. Second quarter 2013 production was 3,062 thousand boe/d compared with 3,103thousand boe/d a year ago. Liquids production decreased by 7% and natural gasproduction increased by 5% compared with the second quarter 2012. Thedeteriorating operating environment in Nigeria impacted production volumes bysome 100 thousand boe/d in the second quarter 2013, and by 65 thousand boe/dcompared to the second quarter 2012. Excluding the impact of the deterioratingoperating environment in Nigeria, divestments and PSC price effects, secondquarter 2013 production was 2% higher than for the same period last year. New field start-ups and the continuing ramp-up of fields, in particular PearlGTL in Qatar and Pluto LNG in Australia, contributed some 190 thousand boe/d toproduction for the second quarter 2013, which more than offset the impact offield declines. Equity LNG sales volumes of 4.68 million tonnes increased by 2% compared to thesame quarter a year ago, reflecting the contribution from Pluto LNG, which waspartly offset by lower volumes from Nigeria LNG. Shell share Nigeria LNGvolumes were some 0.15 million tonnes lower due to reduced feedgas supply, as aresult of the deteriorating security situation onshore, and due to a blockadeof Nigeria LNG operations by the Nigerian Maritime Administration and SafetyAgency. Half year Upstream earnings excluding identified items were $9,174 millioncompared with $10,797 million in the first half year 2012. Identified itemswere a net charge of $1,672 million, compared with a net gain of $634 millionin the first half year 2012 (see page 6). Compared with the first half year 2012, Upstream earnings excluding identifieditems reflected higher operating expenses, lower liquids realisations, higherexploration expenses and well write-offs as well as increased depreciation.Earnings were also reduced by the impact of the weakening Australian dollar ona deferred tax liability and by the deteriorating operating environment inNigeria. This was partly offset by the contribution of Pearl GTL, higher gasrealisations and increased LNG trading contributions. Global liquids realisations were 8% lower than for the first half year 2012. InCanada, synthetic crude oil realisations were in line with the same period lastyear. Global natural gas realisations were 11% higher than for the first halfyear 2012, with a 46% increase in the Americas and a 8% increase outside theAmericas. Half year 2013 production was 3,309 thousand boe/d compared with 3,327 thousandboe/d for the same period a year ago. Liquids production was down 5% andnatural gas production increased by 3% compared with the first half year 2012.Production volumes were significantly impacted by the deteriorating operatingenvironment in Nigeria. Excluding the impact of divestments, PSC price effectsand the deteriorating operating environment in Nigeria, production volumes inthe first half year of 2013 were 2% higher than in the same period last year. Equity LNG sales volumes of 9.83 million tonnes were 1% higher than in thefirst half year 2012, reflecting the contribution from Pluto LNG, which waspartly offset by lower volumes from Nigeria LNG due to reduced feedgas supplyas a result of the deteriorating operating environment in Nigeria. DOWNSTREAM Quarters $ million Half year Q2 2013 Q1 2013 Q2 2012 %2 2013 2012 % Downstream CCS earnings1,168 1,848 1,296 -10 excluding identified items1 3,016 2,418 +25 803 1,688 1,360 -41 Downstream CCS earnings1 2,491 2,680 -7 Downstream cash flow from3,761 365 3,265 +15 operating activities 4,126 6,473 -36 Downstream net capital1,328 820 967 +37 investment 2,148 1,753 +23 Refinery processing intake2,914 2,890 2,810 +4 (thousand b/d) 2,902 2,796 +4 Oil products sales volumes6,212 6,004 6,321 -2 (thousand b/d) 6,109 6,140 -1 Chemicals sales volumes4,211 4,143 4,671 -10 (thousand tonnes) 8,354 9,350 -11 1 Second quarter 2012 and half year 2012 comparatives restated for accountingpolicy change (see Note 2) 2 Q2 on Q2 change Second quarter Downstream earnings excluding identified items were $1,168million compared with $1,296 million for the second quarter 2012. Identifieditems were a net charge of $365 million, compared with a net gain of $64million for the second quarter 2012 (see page 6). Compared with the second quarter 2012, Downstream earnings excluding identifieditems benefited from increased contributions from marketing and trading,reflecting strong performance from these businesses, which was more than offsetby lower realised refining margins. Realised refining margins reflected weakdemand in Europe and the impact of the narrowing price differential betweenNorth American crude oil markers and the Brent crude oil marker oncontributions from refineries in North America, partly offset by betterrefining margins in Asia. Contributions from Chemicals were lower as a resultof the industry environment in Europe, as well as higher maintenance activityin North America and Europe, partly offset by Shell's improved operatingperformance in Asia. Oil products sales volumes decreased by 2% compared with the same period a yearago, mainly as a result of lower trading volumes, partly offset by the effectof an accounting policy change (see Note 1b). Chemicals sales volumes decreased by 10% compared with the same quarter lastyear, mainly as a result of an accounting policy change (see Note 1b), as wellas higher maintenance activity and contract expirations. Chemicalsmanufacturing plant availability decreased to 88% from 89% for the secondquarter 2012, as a result of higher planned maintenance, partly offset byimproved operating performance. Refinery intake volumes were 4% higher compared with the same quarter lastyear, mainly as a result of an accounting policy change (see Note 1b). Refineryavailability was 92%, in line with the second quarter 2012. Half year Downstream earnings excluding identified items were $3,016 millioncompared with $2,418 million in the first half year 2012. Identified items werea net charge of $525 million, compared with a net gain of $262 million in thefirst half year 2012 (see page 6). Compared with the first half year 2012, Downstream earnings excludingidentified items reflected higher contributions from marketing and trading, andimproved realised refining margins during the first quarter of 2013. This waspartly offset by higher depreciation. Chemicals contributions were broadlysimilar to the first half year 2012. Oil products sales volumes were broadly similar to the same period a year ago,reflecting lower marketing volumes, offset by higher trading volumes and theeffect of an accounting policy change (see Note 1b). Chemicals sales volumes decreased by 11% compared with the first half year2012, mainly as a result of an accounting policy change (see Note 1b), as wellas higher maintenance activity and contract expirations. Chemicalsmanufacturing plant availability decreased to 90% from 92% for the first halfyear 2012, as a result of higher planned maintenance, partly offset by improvedoperating performance. Refinery intake volumes were 4% higher compared with the first half year 2012,mainly as a result of an accounting policy change (see Note 1b). Refineryavailability decreased to 92% from 93% for the same period a year ago, as aresult of higher planned maintenance. CORPORATE AND NON-CONTROLLING INTEREST Quarters $ million Half year Q2 2013 Q1 2013 Q2 2012 2013 2012 Corporate and Non-controlling interest(94) 24 (84) excl. identified items1 (70) (179) Of which: (77) 88 (36) Corporate1 11 (66) (17) (64) (48) Non-controlling interest (81) (113) (90) 442 (84) Corporate and Non-controlling interest1 352 (450) 1 Second quarter 2012 and half year 2012 comparatives restated for accountingpolicy change (see Note 2) Second quarter Corporate results and Non-controlling interest excludingidentified items were a loss of $94 million, compared with a loss of $84million in the same period last year. Identified items for the second quarter2013 were a net gain of $4 million, whereas earnings for the second quarter2012 did not include any identified items (see page 6). Compared with the second quarter 2012, Corporate results excluding identifieditems mainly reflected lower tax credits and adverse currency exchange rateeffects, partly offset by lower net interest expense. Half year Corporate results and Non-controlling interest excluding identifieditems were a loss of $70 million compared with a loss of $179 million in thefirst half year 2012. Identified items for first half year 2013 were a net gainof $422 million, compared with a net charge of $271 million in the first halfyear 2012 (see page 6). Compared with the first half year 2012, Corporate results excluding identifieditems mainly reflected lower net interest expense and lower costs, partlyoffset by adverse currency exchange rate effects. FORTHCOMING EVENTS Third quarter 2013 results and third quarter 2013 dividend are scheduled to beannounced on October 31, 2013. UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF INCOME Quarters $ million Half year Q2Q2 2013 Q1 2013 20121 %2 2013 20121 % 112,669 112,810 117,068 Revenue 225,479 236,988 Share of profit of1,433 2,303 1,514 equity-accounted investments 3,736 4,454 246 401 1,304 Interest and other income 647 2,218 Total revenue and other114,348 115,514 119,886 income 229,862 243,660 88,901 86,603 95,041 Purchases 175,504 189,110 Production and manufacturing7,000 6,458 6,366 expenses 13,458 12,404 Selling, distribution and3,661 3,587 3,432 administrative expenses 7,248 7,091 305 294 287 Research and development 599 581 1,228 648 862 Exploration 1,876 1,224 Depreciation, depletion and7,502 4,225 3,503 amortisation 11,727 6,905 379 401 411 Interest expense 780 963 5,372 13,298 9,984 -46 Income before taxation 18,670 25,382 -26 3,631 5,072 5,896 Taxation 8,703 12,442 1,741 8,226 4,088 -57 Income for the period 9,967 12,940 -23 Income attributable to4 50 5 non-controlling interest 54 120 Income attributable to Royal1,737 8,176 4,083 -57 Dutch Shell plc shareholders 9,913 12,820 -23 1 Restated for accounting policy change (see Note 2) 2 Q2 on Q2 change EARNINGS PER SHARE Quarters $ Half year Q2 2013 Q1 2013 Q2 20121 2013 20121 0.28 1.30 0.66 Basic earnings per share 1.57 2.06 0.27 1.29 0.66 Diluted earnings per share 1.57 2.06 1 Restated for accounting policy change (see Note 2) SHARES1 Quarters Millions Half year Q2 2013 Q1 2013 Q2 2012 2013 2012 Weighted average number of shares as the basis for: 6,313.7 6,308.9 6,265.9 Basic earnings per share 6,311.3 6,247.7 6,316.9 6,313.7 6,273.2 Diluted earnings per share 6,314.6 6,255.7 Shares outstanding at the end of6,296.0 6,340.2 6,266.2 the period 6,296.0 6,266.2 1 Royal Dutch Shell plc ordinary shares of euro 0.07 each Notes 1 to 7 are an integral part of these Condensed Consolidated InterimFinancial Statements. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Quarters $ million Half year Q2Q2 2013 Q1 2013 20121 2013 20121 1,741 8,226 4,088 Income for the period 9,967 12,940 Other comprehensive income: Items that may be reclassified to income in later periods: (1,024) (1,652) (2,430) Currency translation differences (2,676) (805) Unrealised (losses)/gains on(71) 31 70 securities (40) (35) 142 13 567 Cash flow hedging gains 155 117 Share of other comprehensive (loss) /income of equity-accounted(29) (56) 39 investments (85) (70) (982) (1,664) (1,754) Total (2,646) (793) Items that are not reclassified to income in later periods: 584 1,436 (12) Retirement benefits remeasurements 2,020 (41) 584 1,436 (12) Total 2,020 (41) Other comprehensive loss for the(398) (228) (1,766) period (626) (834) 1,343 7,998 2,322 Comprehensive income for the period 9,341 12,106 Comprehensive (loss)/income attributable to non-controlling(22) 25 (36) interest 3 122 Comprehensive income attributable to Royal Dutch Shell plc1,365 7,973 2,358 shareholders 9,338 11,984 1 Restated for accounting policy change (see Note 2) Notes 1 to 7 are an integral part of these Condensed Consolidated InterimFinancial Statements. CONDENSED CONSOLIDATED BALANCE SHEET $ million June 30, Dec 31, 2013 Mar 31, 2013 20121 Assets Non-current assets: Intangible assets 4,384 4,456 4,470 Property, plant and equipment 180,863 180,244 172,293 Equity-accounted investments 33,715 34,478 38,350 Investments in securities 4,809 4,878 4,867 Deferred tax 5,097 4,641 4,288 Retirement benefits 3,649 3,502 2,301 Trade and other receivables 9,115 9,052 8,991 241,632 241,251 235,560 Current assets: Inventories 29,024 31,531 30,781 Trade and other receivables 62,312 66,598 65,403 Cash and cash equivalents 12,540 17,614 18,550 103,876 115,743 114,734 Total assets 345,508 356,994 350,294 Liabilities Non-current liabilities: Debt 28,017 27,329 29,921 Trade and other payables 4,094 4,170 4,175 Deferred tax 11,950 11,490 10,312 Retirement benefits 14,048 15,091 15,290 Decommissioning and other provisions 17,909 18,054 17,435 76,018 76,134 77,133 Current liabilities: Debt 4,954 8,461 7,833 Trade and other payables 70,922 73,301 72,839 Taxes payable 12,031 14,386 12,684 Retirement benefits 383 376 402 Decommissioning and other provisions 2,979 3,097 3,221 91,269 99,621 96,979 Total liabilities 167,287 175,755 174,112 Equity attributable to Royal Dutch Shellplc shareholders 176,867 179,806 174,749 Non-controlling interest 1,354 1,433 1,433 Total equity 178,221 181,239 176,182 Total liabilities and equity 345,508 356,994 350,294 1 Restated for accounting policy change (see Note 2) Notes 1 to 7 are an integral part of these Condensed Consolidated InterimFinancial Statements CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Equity attributable to Royal Dutch Shell plc shareholders Shares Share held in Other Retained Non-controlling Total$ million capital trust reserves earnings Total interest equity At January 1, 20131 542 (2,287) (3,752) 180,246 174,749 1,433 176,182 Comprehensiveincome for theperiod - - (575) 9,913 9,338 3 9,341 Capitalcontributions from,and other changesin, non-controllinginterest - - - - - (2) (2) Dividends paid - - - (5,598) (5,598) (80) (5,678) Scrip dividends2 4 - (4) 1,647 1,647 - 1,647 Repurchases ofshares3 (6) - 6 (3,077) (3,077) - (3,077) Shares held intrust: net sales/(purchases) anddividends received - 559 - 59 618 - 618 Share-basedcompensation - - (430) (380) (810) - (810) At June 30, 2013 540 (1,728) (4,755) 182,810 176,867 1,354 178,221 At January 1, 20121 536 (2,990) (1,961) 162,895 158,480 1,486 159,966 Comprehensiveincome for theperiod1 - - (836) 12,820 11,984 122 12,106 Capitalcontributions from,and other changesin, non-controllinginterest - - - 37 37 (67) (30) Dividends paid - - - (5,430) (5,430) (102) (5,532) Scrip dividends2 4 - (4) 1,647 1,647 - 1,647 Repurchases ofshares3 (2) - - 2 (1,584) (1,584) - (1,584) Shares held intrust: net sales/(purchases) anddividends received - 858 - 78 936 - 936 Share-basedcompensation - - 43 (401) (358) - (358) At June 30, 20121 538 (2,132) (2,756) 170,062 165,712 1,439 167,151 1 Restated for accounting policy change (see Note 2) 2 Under the Scrip Dividend Programme some 49.2 million A shares, equivalent to$1.6 billion, were issued during the first half year 2013 and some 47.3 millionA shares, equivalent to $1.6 billion, were issued during the first half year2012. 3 Includes shares committed to repurchase and repurchases subject to settlementat the end of the quarter Notes 1 to 7 are an integral part of these Condensed Consolidated InterimFinancial Statements. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Quarters $ million Half year Q2 2013 Q1 2013 Q2 20121 2013 20121 Cash flow from operating activities 1,741 8,226 4,088 Income for the period 9,967 12,940 Adjustment for: 4,048 4,892 5,892 - Current taxation 8,940 11,371 301 357 358 - Interest expense (net) 658 857 - Depreciation, depletion and7,502 4,225 3,503 amortisation 11,727 6,905 (44) (213) (1,193) - Net gains on sale of assets (257) (1,717) 4,085 34 3,836 - Decrease in working capital 4,119 4,606 - Share of profit of(1,433) (2,303) (1,514) equity-accounted investments (3,736) (4,454) - Dividends received from2,703 1,242 2,799 equity-accounted investments 3,945 5,381 - Deferred taxation, retirement benefits, decommissioning(845) (11) (90) and other provisions (856) 863 784 27 261 - Other 811 (147) Net cash from operating18,842 16,476 17,940 activities (pre-tax) 35,318 36,605 (6,398) (4,917) (4,635) Taxation paid (11,315) (9,861) Net cash from operating12,444 11,559 13,305 activities 24,003 26,744 Cash flow from investing activities (8,987) (7,862) (7,033) Capital expenditure (16,849) (13,489) Investments in equity-accounted(291) (372) (724) investments (663) (2,022) 319 382 1,675 Proceeds from sales of assets 701 4,047 Proceeds from sales of63 154 170 equity-accounted investments 217 227 (Purchases)/proceeds from other(347) 20 10 investments (net) (327) (30) 71 36 45 Interest received 107 93 Net cash used in investing(9,172) (7,642) (5,857) activities (16,814) (11,174) Cash flow from financing activities Net (decrease)/increase in debt with maturity period(370) 133 248 within three months (237) (205) 198 180 134 Other debt: New borrowings 378 744 (3,556) (2,185) (1,533) Repayments (5,741) (4,500) (176) (158) (339) Interest paid (334) (793) Change in non-controlling8 (7) (2) interest 1 8 Cash dividends paid to: - Royal Dutch Shell plc(2,043) (1,908) (2,112) shareholders (3,951) (3,783) (59) (21) (78) - Non-controlling interest (80) (102) (1,934) (545) (890) Repurchases of shares (2,479) (890) Shares held in trust: net (purchases)/sales and dividends(432) (10) (103) received (442) 102 Net cash used in financing(8,364) (4,521) (4,675) activities (12,885) (9,419) Currency translation differences relating to cash and 18 (332) (515) cash equivalents (314) (161) (Decrease)/increase in cash and(5,074) (936) 2,258 cash equivalents (6,010) 5,990 Cash and cash equivalents at17,614 18,550 15,024 beginning of period 18,550 11,292 Cash and cash equivalents at end12,540 17,614 17,282 of period 12,540 17,282 1 Restated for accounting policy change (see Note 2) Notes 1 to 7 are an integral part of these Condensed Consolidated InterimFinancial Statements. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS 1. Basis of preparation These Condensed Consolidated Interim Financial Statements ("InterimStatements") of Royal Dutch Shell plc and its subsidiaries (collectively knownas Shell) have been prepared in accordance with IAS 34 Interim FinancialReporting as adopted by the European Union and as issued by the InternationalAccounting Standards Board and on the basis of the same accounting principlesas, and should be read in conjunction with, the Annual Report and Form 20-F forthe year ended December 31, 2012 (pages 103 to 108) as filed with the U.S.Securities and Exchange Commission, except as described below: A) Revised IAS 19 Employee Benefits was adopted on January 1, 2013, withretrospective effect (see Note 2). B) IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements andrevised standards IAS 27 Separate Financial Statements and IAS 28 Investmentsin Associates and Joint Ventures were adopted on January 1, 2013. The standardsreinforce the principles for determining when an investor controls anotherentity and in certain cases amend the accounting for arrangements where aninvestor has joint control. The impact of the changes on the accounting forShell's interests is not significant, hence comparative information was notrestated; the major investments affected are listed in Note 7. C) IFRS 13 Fair Value Measurement was adopted on January 1, 2013, with prospectiveeffect. The standard affects nearly all instances where assets and liabilitiesare currently recognised at fair value, primarily by refining the measurementconcept to represent an asset or liability's exit value. The standard alsointroduces certain additional considerations to the measurement process andadditional disclosures have been provided where considered material (see Note6). The impact of the changes for Shell is not significant. The Directors consider that, taking into account Shell's assets and income,Shell has adequate resources to continue in operational existence for theforeseeable future. For this reason the Directors adopt the going concern basisfor the financial statements contained in this Report. The financial information presented in the Interim Statements does notconstitute statutory accounts within the meanings of section 434(3) of theCompanies Act 2006. Statutory accounts for the year ended December 31, 2012were published in Shell's Annual Report and a copy delivered to the Registrarof Companies in England and Wales. The auditors' report on those accounts wasunqualified, did not include a reference to any matters to which the auditorsdrew attention by way of emphasis without qualifying the report and did notcontain a statement under sections 498(2) or (3) of the Companies Act 2006. The Interim Statements are unaudited. Segment information Segment earnings (see Note 3) are presented on a current cost of supplies basis(CCS earnings). On this basis, the purchase price of volumes sold during theperiod is based on the current cost of supplies during the same period aftermaking allowance for the tax effect. CCS earnings therefore exclude the effectof changes in the oil price on inventory carrying amounts. Net capital investment (see Note 10) is defined as capital expenditure asreported in the Condensed Consolidated Statement of Cash Flows, adjusted for:proceeds from disposals (excluding those in the Corporate segment relating toother investments); exploration expense excluding exploration wells writtenoff; investments in equity-accounted investments; and leases and other items. CCS earnings and net capital investment information are the dominant measuresused by the Chief Executive Officer for the purposes of making decisions aboutallocating resources and assessing performance. 2. Accounting for defined benefit plans Revised IAS 19 Employee Benefits (IAS 19R) was adopted on January 1, 2013, withretrospective effect; comparative information is therefore restated. The revised standard requires immediate recognition of actuarial gains andlosses and return on assets arising in connection with defined benefit plansthrough other comprehensive income (see page 11). Previously, Shell applied thecorridor method of accounting under which amounts falling inside the corridorremained unrecognised, while amounts falling outside it were recognised(amortised) in income over a number of years. For the periods presented in thisReport, the elimination of this amortisation is approximately offset by lowerinterest income being recognised in income under the IAS 19R "net interest"approach. Under this approach, interest income from defined benefit plan assetsis determined based on the same discount rate as applied to measure planobligations, rather than on an expected rate of return reflecting the plan'sinvestment portfolio. The following table sets out the impact of the change on relevant lines in theCondensed Consolidated Balance Sheet, on gearing, and on the return on capitalemployed (ROACE, see Note 9) for the twelve months ending at the respectivebalance sheet date. $ million Dec 31, 2012 June 30, 2012 Effect of Effect of As accounting As accounting previously policy previously policy stated change Restated stated change Restated Non-current assets Deferred tax 4,045 243 4,288 4,141 183 4,324 Retirementbenefits 12,575 (10,274) 2,301 11,542 (7,966) 3,576 Non-currentliabilities Deferred tax 15,590 (5,278) 10,312 15,626 (4,468) 11,158 Retirementbenefits 6,298 8,992 15,290 6,026 7,610 13,636 Total equity Other reserves 10,021 (13,773) (3,752) 8,115 (10,871) (2,756) Retained earnings 180,218 28 180,246 170,116 (54) 170,062 Gearing1 9.2% 0.6% 9.8% 8.1% 0.5% 8.6% ROACE 12.7% 0.9% 13.6% 12.9% 0.6% 13.5% 1 Net debt (total debt less cash and cash equivalents) as a percentage of totalcapital (net debt plus total equity) The effect of the accounting policy change at January 1, 2012 was to reduceAccumulated other comprehensive income (within Other reserves) by $10,945million, Retained earnings by $92 million and Total equity by $11,037 million. Income for the second quarter 2012 increased by $20 million, solely impactingthe Upstream segment. Basic and diluted earnings per share for the secondquarter 2012 increased by $0.01. There was no impact on net cash from operatingactivities. Income for the first half year 2012 increased by $38 million of which Upstreamsegment earnings increased by $37 million and Downstream segment earningsincreased by $1 million. Basic and diluted earnings per share for the firsthalf year 2012 increased by $0.01. There was no impact on net cash fromoperating activities. 3. Information by business segment Quarters $ million Half year Q2 20121 20121Q2 2013 2013 Third-party revenue 12,085 10,048 Upstream 24,461 22,038 100,534 107,007 Downstream 200,943 214,925 50 13 Corporate 75 25 112,669 117,068 Total third-party revenue 225,479 236,988 Inter-segment revenue 10,353 12,548 Upstream 22,495 25,999 158 171 Downstream 401 383 - - Corporate - - Segment earnings 1,681 4,708 Upstream2 7,502 11,431 803 1,360 Downstream 2,491 2,680 (73) (36) Corporate 418 (300) 2,411 6,032 Total segment earnings 10,411 13,811 1 Restated for accounting policy change (see Note 2) 2 Second quarter 2013 Upstream earnings included an impairment charge of $2,071million after taxation ($3,267 million before taxation) Quarters $ million Half year Q2 20121 20121Q2 2013 2013 2,411 6,032 Total segment earnings 10,411 13,811 Current cost of supplies adjustment: (794) (2,165) Purchases (681) (970) 218 585 Taxation 190 243 Share of profit of equity-accounted(94) (364) investments 47 (144) 1,741 4,088 Income for the period 9,967 12,940 1 Restated for accounting policy change (see Note 2) 4. Share capital Issued and fully paid Ordinary shares of euro 0.07 each Sterling deferred Number of shares A B shares of £1 each At January 1, 2013 3,772,388,687 2,617,715,189 50,000 Scrip dividends 49,223,025 - - Repurchases of shares - (72,247,018) - At June 30, 2013 3,821,611,712 2,545,468,171 50,000 Nominal value Ordinary shares $ million A B Total At January 1, 2013 321 221 542 Scrip dividends 4 - 4 Repurchases of shares - (6) (6) At June 30, 2013 325 215 540 The total nominal value of sterling deferred shares is less than $1 million. At Royal Dutch Shell plc's Annual General Meeting on May 21, 2013, the Boardwas authorised to allot ordinary shares in Royal Dutch Shell plc, and to grantrights to subscribe for or to convert any security into ordinary shares inRoyal Dutch Shell plc, up to an aggregate nominal amount of euro 148 million(representing approximately 2,114 million ordinary shares of euro 0.07 each),and to list such shares or rights on any stock exchange. This authority expiresat the earlier of the close of business on August 21, 2014 and the end of theAnnual General Meeting to be held in 2014, unless previously renewed, revokedor varied by Royal Dutch Shell plc in a general meeting. 5. Other reserves Accumulated Share Capital Share other Merger premium redemption plan comprehensive$ million reserve1 reserve1 reserve2 reserve income Total At January 1, 20133 3,423 154 63 2,028 (9,420) (3,752) Other comprehensiveloss attributable toRoyal Dutch Shell plcshareholders - - - - (575) (575) Scrip dividends (4) - - - - (4) Repurchases of shares - - 6 - - 6 Share-basedcompensation - - - (430) - (430) At June 30, 2013 3,419 154 69 1,598 (9,995) (4,755) At January 1, 20123 3,432 154 60 1,571 (7,178) (1,961) Other comprehensiveloss attributable toRoyal Dutch Shell plcshareholders3 - - - - (836) (836) Scrip dividends (4) - - - - (4) Repurchases of shares - - 2 - - 2 Share-basedcompensation - - - 43 - 43 At June 30, 20123 3,428 154 62 1,614 (8,014) (2,756) 1 The merger reserve and share premium reserve were established as aconsequence of Royal Dutch Shell plc becoming the single parent company ofRoyal Dutch Petroleum Company and The "Shell" Transport and Trading Company,plc, now The Shell Transport and Trading Company Limited, in 2005. 2 The capital redemption reserve was established in connection with repurchasesof shares of Royal Dutch Shell plc. 3 Restated for accounting policy change (see Note 2) 6. Derivative contracts The table below provides the carrying amounts of derivatives contracts held,disclosed in accordance with IFRS 13 Fair Value Measurement (see Note 1c). June 30, March 31, Dec 31,$ million 2013 2013 2012 Included within: Trade and other receivables - non-current 1,337 1,426 1,881 Trade and other receivables - current 8,174 8,443 9,192 Trade and other payables - non-current 583 609 658 Trade and other payables - current 7,834 8,530 9,145 7. Major investments in joint ventures and associates Of the major investments in joint ventures and associates listed in the AnnualReport and Form 20-F for the year ended December 31, 2012 (page 117), Aera,Deer Park and Saudi Aramco Shell Refinery have been assessed as jointoperations under IFRS 11 Joint Arrangements (see Note 1b) and are no longeraccounted for using the equity method as from January 1, 2013. 8. Impacts of accounting for derivatives In the ordinary course of business Shell enters into contracts to supply orpurchase oil and gas products, and also enters into derivative contracts tomitigate resulting economic exposures (generally price exposure). Derivativecontracts are carried at period-end market price (fair value), with movementsin fair value recognised in income for the period. Supply and purchasecontracts entered into for operational purposes are, by contrast, recognisedwhen the transaction occurs (see also below); furthermore, inventory is carriedat historical cost or net realisable value, whichever is lower. As a consequence, accounting mismatches occur because: (a) the supply orpurchase transaction is recognised in a different period; or (b) the inventoryis measured on a different basis. In addition, certain UK gas contracts held by Upstream are, due to pricing ordelivery conditions, deemed to contain embedded derivatives or written optionsand are also required to be carried at fair value even though they are enteredinto for operational purposes. The accounting impacts of the aforementioned are reported as identified itemsin this Report. 9. Return on average capital employed Return on average capital employed (ROACE) measures the efficiency of Shell'sutilisation of the capital that it employs and is a common measure of businessperformance. In this calculation, ROACE is defined as the sum of income for thecurrent and previous three quarters, adjusted for after-tax interest expense,as a percentage of the average capital employed for the same period. Capitalemployed consists of total equity, current debt and non-current debt. The taxrate is derived from calculations at the published segment level. 10. Liquidity and capital resources Second quarter net cash from operating activities was $12.4 billion comparedwith $13.3 billion for the same period last year. Total current and non-current debt decreased to $33.0 billion at June 30, 2013from $35.8 billion at March 31, 2013 while cash and cash equivalents decreasedto $12.5 billion at June 30, 2013, from $17.6 billion at March 31, 2013. No newdebt was issued under the US shelf registration or under the euro medium-termnote programme during the second quarter 2013. Net capital investment in the second quarter 2013 was $10.9 billion, of which$9.5 billion was in Upstream, $1.3 billion in Downstream and $0.1 billion inCorporate. Net capital investment in the same period of 2012 was $6.3 billion,of which $5.3 billion was in Upstream and $1.0 billion in Downstream. Dividends of $0.45 per share are announced on August 1, 2013 in respect of thesecond quarter. These dividends are payable on September 26, 2013. In the caseof the B shares, the dividends will be payable through the dividend accessmechanism and are expected to be treated as UK-source rather than Dutch-source.See the Annual Report and Form 20-F for the year ended December 31, 2012 foradditional information on the dividend access mechanism. Under the Scrip Dividend Programme shareholders can increase their shareholdingin Shell by choosing to receive new shares instead of cash dividends. Only newA shares will be issued under the Programme, including to shareholders whocurrently hold B shares. Half year net cash from operating activities was $24.0 billion compared with$26.7 billion for the same period last year. Total current and non-current debt decreased to $33.0 billion at June 30, 2013from $37.8 billion at December 31, 2012 while cash and cash equivalentsdecreased to $12.5 billion at June 30, 2013, from $18.6 billion at December 31,2012. No new debt was issued under the US shelf registration or under the euromedium-term note programme during the first half 2013. Net capital investment in the first half 2013 was $19.1 billion, of which $16.9billion was in Upstream, $2.1 billion in Downstream and $0.1 billion inCorporate. Net capital investment in the same period of 2012 was $10.9 billion,of which $9.1 billion was in Upstream and $1.8 billion in Downstream. PRINCIPAL RISKS AND UNCERTAINTIES The principal risks and uncertainties affecting Shell are described in the RiskFactors section of the Annual Report and Form 20-F for the year ended December31, 2012 (pages 13 to 15) and are summarised below. Other than thedeteriorating operating environment in Nigeria, there are no material changesin those Risk Factors for the remaining 6 months of the financial year. * We are exposed to fluctuating prices of crude oil, natural gas, oil products and chemicals. * Our ability to achieve strategic objectives depends on how we react to competitive forces. * As our business model involves trading and treasury risks, we are affected by the global macroeconomic environment as well as financial and commodity market conditions. * Our future hydrocarbon production depends on the delivery of large and complex projects, as well as on our ability to replace proved oil and gas reserves. * An erosion of our business reputation would have a negative impact on our brand, our ability to secure new resources and our licence to operate. * Our future performance depends on the successful development and deployment of new technologies. * Rising climate change concerns could lead to additional regulatory measures that may result in project delays and higher costs. * The nature of our operations exposes us to a wide range of health, safety, security and environment risks. * Shell mainly self-insures its risk exposures. * During the first half year 2013 the operating environment in Nigeria deteriorated substantially. An erosion of the business and operating environment in Nigeria is expected to adversely impact Shell's earnings and cash flow from operations. * We operate in more than 70 countries, with differing degrees of political, legal and fiscal stability. This exposes us to a wide range of political developments that could result in changes to laws and regulations. In addition, Shell subsidiaries and equity-accounted investments face the risk of litigation and disputes worldwide. * Our operations expose us to social instability, terrorism, acts of war, piracy and government sanctions that could have an adverse impact on our business. * We rely heavily on information technology systems for our operations. * We have substantial pension commitments, whose funding is subject to capital market risks. * The estimation of proved oil and gas reserves involves subjective judgements based on available information and the application of complex rules, so subsequent downward adjustments are possible. * Many of our major projects and operations are conducted in joint ventures or associates. This may reduce our degree of control, as well as our ability to identify and manage risks. * Violations of antitrust and competition law carry fines and expose us or our employees to criminal sanctions and civil suits. * Shell is currently subject to a Deferred Prosecution Agreement with the U.S. Department of Justice for violations of the Foreign Corrupt Practices Act. * The Company's Articles of Association determine the jurisdiction for shareholder disputes. This might limit shareholder remedies. FIRST QUARTER 2013 PORTFOLIO DEVELOPMENTS Upstream In Canada, the first debottlenecking project for the Athabasca Oil SandsProject (Shell interest 60%) was completed. The project is expected to add some10 thousand barrels per day ("b/d") of capacity. In Nigeria, Shell took the final investment decision for the development of thedeep-water project Erha North Phase 2 (Shell interest 44%), part of oil mininglease 133, located over 100 kilometres off the Nigerian coast. The project isexpected to produce some 60 thousand barrels of oil equivalent per day ("boe/d") of mainly oil at peak production and improve utilisation of the existingErha floating production, storage and offloading ("FPSO") vessel. In Oman, the Amal Steam enhanced oil recovery project (Shell interest 34%) wasbrought on stream. The project is expected to ramp up over a number of yearsand produce some 20 thousand b/d of oil at peak production. Shell entered into an agreement to acquire part of Repsol S.A.'s LNG portfoliooutside of North America, including supply positions in Peru and Trinidad &Tobago, for a cash consideration of $4.4 billion. Under the terms of theagreement, Shell will assume finance lease obligations of the businessesacquired, predominantly reflecting leases for LNG ship charters, provisionallyestimated at $1.8 billion. The acquisition is expected to add some 7.2 milliontonnes per annum ("mtpa") of LNG volumes through long-term offtake agreements,including 4.2 mtpa of equity LNG plant capacity. The transaction, which has aneffective date of October 1, 2012, is expected to close in the second half of2013 or early 2014, subject to regulatory approvals and other conditionsprecedent. In the United Kingdom, Shell completed the acquisition of an additional 5.9%interest in the offshore Schiehallion field, increasing Shell's interest to55%. Shell also completed the acquisition of additional interests in the Berylarea fields and SAGE infrastructure, lifting Shell's production in the Berylarea fields from 9 thousand boe/d to 20 thousand boe/d. Further investment inSchiehallion and Beryl is expected to extend the production life of the fields. In the United States, Shell and Kinder Morgan affiliates announced their intentto form a company to develop a natural gas liquefaction plant in two phases atthe existing Elba Island LNG terminal to export LNG. The total project isexpected to have a liquefaction capacity of approximately 2.5 mtpa. Shell willown 49% of the entity and subscribe to 100% of the liquefaction capacity. Theagreement is subject to corporate and regulatory approvals. In North America, Shell took the final investment decision for two 0.25 mtpanatural gas liquefaction units (Shell interest 100%) in Louisiana, UnitedStates and Ontario, Canada. These units will form the basis of two new LNGtransport corridors in the Gulf Coast and Great Lakes regions, fuelling marinevessels and heavy-duty trucking fleets. Upstream divestment proceeds totalled some $0.4 billion for the first quarter2013 and included proceeds from the divestment of a 5% interest in the Preludefloating LNG project to CPC Corporation as announced in 2012, reducing Shell'sinterest in the project to 67.5%. During the first quarter 2013, Shell participated in the Kentish Knock South-1gas discovery (Shell interest 50%) offshore Western Australia. As part of itsglobal exploration programme Shell added new acreage positions during the firstquarter 2013, including liquids-rich acreage positions in Canada, offshorepositions in Norway and the United Kingdom North Sea, along with successfulbidding results in the Gulf of Mexico, United States. Shell also signed aproduction sharing contract ("PSC") for tight gas in the Yuzivska area in theUkraine and, in China, Shell received government approval for the tight gas PSCfor the Fushun-Yongchuan block in the Sichuan basin. Downstream In Singapore, Shell announced the final investment decisions for additionalcapacity at its Jurong Island petrochemicals facility. The investments (Shellinterest 100%) are expected to add 140 thousand tonnes per annum ("tpa") ofhigh-purity ethylene oxide capacity, 140 thousand tpa of ethoxylation capacityand more than 100 thousand tpa of polyols capacity. Downstream divestment proceeds totalled some $0.1 billion for the first quarter2013 and included proceeds from the divestment of Shell's interest in apipeline business in the United States, Shell's LPG business in Vietnam and themajority of Shell's shareholding in its downstream business in Uganda. In April, Shell announced that its 120 thousand b/d Geelong refinery inAustralia is for sale and that it is considering the sale of selecteddownstream marketing businesses in Italy. Also in April, Shell finalised an agreement with TravelCenters of America inthe United States to develop a nationwide network of LNG fuelling centres forheavy-duty road transport customers at up to 100 existing sites. FIRST QUARTER 2013 SUMMARY OF IDENTIFIED ITEMS Earnings for the first quarter 2013 reflected the following items, which inaggregate amounted to a net gain of $431 million, as summarised in the table onpage 6. Earnings for the first quarter 2012 included a net gain of $380million. * Upstream earnings included a net gain of $173 million, mainly reflecting the revaluation of a deferred tax asset of $199 million and net divestment gains of $107 million, both predominantly related to Australia, partly offset by the net impact of fair value accounting of commodity derivatives and certain gas contracts of $103 million. Earnings for the first quarter 2012 included a net gain of $453 million. * Downstream earnings included a net charge of $160 million, mainly reflecting impairments of $155 million, predominantly in Australia, and the net impact of fair value accounting of commodity derivatives of $30 million, partly offset by net divestment gains of $24 million. Earnings for the first quarter 2012 included a net gain of $198 million. * Corporate and Non-controlling interest earnings included a net gain of $418 million, mainly reflecting a tax credit of $407 million related to prior years. Earnings for the first quarter 2012 included a net charge of $271 million. RESPONSIBILITY STATEMENT It is confirmed that to the best of our knowledge: (a) the CondensedConsolidated Interim Financial Statements have been prepared in accordance withIAS 34 Interim Financial Reporting as adopted by the European Union; (b) theinterim management report includes a fair review of the information required byDisclosure and Transparency Rule (DTR) 4.2.7R (indication of important eventsduring the first six months of the financial year, and their impact on theCondensed Consolidated Interim Financial Statements, and description ofprincipal risks and uncertainties for the remaining six months of the financialyear); and (c) the interim management report includes a fair review of theinformation required by DTR 4.2.8R (disclosure of related parties transactionsand changes thereto). The Directors of Royal Dutch Shell plc are as shown on pages 52-54 in theAnnual Report and Form 20-F for the year ended December 31, 2012 except thatChristine Morin-Postel and Jeroen van der Veer stepped down as Directors on May21, 2013. On behalf of the Board Peter Voser Simon Henry Chief Executive Officer Chief Financial Officer August 1, 2013 August 1, 2013 INDEPENDENT REVIEW REPORT TO ROYAL DUTCH SHELL PLC Introduction We have been engaged by the company to review the Condensed ConsolidatedInterim Financial Statements in the half-yearly financial report for the sixmonths ended June 30, 2013, which comprise the Consolidated Statement ofIncome, the Consolidated Statement of Comprehensive Income, the CondensedConsolidated Balance Sheet, the Consolidated Statement of Changes in Equity,the Condensed Consolidated Statement of Cash Flows and related Notes. We haveread the other information contained in the half-yearly financial report andconsidered whether it contains any apparent misstatements or materialinconsistencies with the information in the Condensed Consolidated InterimFinancial Statements. Directors' responsibilities The half-yearly financial report is the responsibility of, and has beenapproved by, the Directors. The Directors are responsible for preparing thehalf-yearly financial report in accordance with the Disclosure and TransparencyRules of the United Kingdom's Financial Conduct Authority. The annual financial statements of Shell are prepared in accordance with IFRSsas adopted by the European Union. The Condensed Consolidated Interim FinancialStatements included in this half-yearly financial report have been prepared inaccordance with International Accounting Standard 34, 'Interim FinancialReporting', as adopted by the European Union. Our responsibility Our responsibility is to express to the company a conclusion on the CondensedConsolidated Interim Financial Statements in the half-yearly financial reportbased on our review. This report, including the conclusion, has been preparedfor and only for the company for the purpose of the Disclosure and TransparencyRules of the Financial Conduct Authority and for no other purpose. We do not,in producing this report, accept or assume responsibility for any other purposeor to any other person to whom this report is shown or into whose hands it maycome save where expressly agreed by our prior consent in writing. Scope of review We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, 'Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity' issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly,we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us tobelieve that the Condensed Consolidated Interim Financial Statements in thehalf-yearly financial report for the six months ended June 30, 2013, are notprepared, in all material respects, in accordance with International AccountingStandard 34 as adopted by the European Union and the Disclosure andTransparency Rules of the United Kingdom's Financial Conduct Authority. PricewaterhouseCoopers LLP Chartered Accountants London August 1, 2013 A) The maintenance and integrity of the Royal Dutch Shell plc website(www.shell.com) are the responsibility of the Directors; the work carried outby the auditors does not involve consideration of these matters and,accordingly, the auditors accept no responsibility for any changes that mayhave occurred to the Condensed Consolidated Interim Financial Statements sincethey were initially presented on the website. B) Legislation in the United Kingdom governing the preparation and disseminationof financial statements may differ from legislation in other jurisdictions. CAUTIONARY STATEMENT All amounts shown throughout this Report are unaudited. The companies in which Royal Dutch Shell plc directly and indirectly ownsinvestments are separate entities. In this document "Shell", "Shell group" and"Royal Dutch Shell" are sometimes used for convenience where references aremade to Royal Dutch Shell plc and its subsidiaries in general. Likewise, thewords "we", "us" and "our" are also used to refer to subsidiaries in general orto those who work for them. These expressions are also used where no usefulpurpose is served by identifying the particular company or companies.''Subsidiaries'', "Shell subsidiaries" and "Shell companies" as used in thisdocument refer to companies over which Royal Dutch Shell plc either directly orindirectly has control. Companies over which Shell has joint control aregenerally referred to as "joint ventures" and companies over which Shell hassignificant influence but neither control nor joint control are referred to as"associates". In this document, joint ventures and associates may also bereferred to as "equity-accounted investments". The term "Shell interest" isused for convenience to indicate the direct and/or indirect (for example,through our 23% shareholding in Woodside Petroleum Ltd.) ownership interestheld by Shell in a venture, partnership or company, after exclusion of allthird-party interest. This document contains forward-looking statements concerning the financialcondition, results of operations and businesses of Royal Dutch Shell. Allstatements other than statements of historical fact are, or may be deemed tobe, forward-looking statements. Forward-looking statements are statements offuture expectations that are based on management's current expectations andassumptions and involve known and unknown risks and uncertainties that couldcause actual results, performance or events to differ materially from thoseexpressed or implied in these statements. Forward-looking statements include,among other things, statements concerning the potential exposure of Royal DutchShell to market risks and statements expressing management's expectations,beliefs, estimates, forecasts, projections and assumptions. Theseforward-looking statements are identified by their use of terms and phrasessuch as ''anticipate'', ''believe'', ''could'', ''estimate'', ''expect'',''goals'', ''intend'', ''may'', ''objectives'', ''outlook'', ''plan'',''probably'', ''project'', ''risks'', "schedule", ''seek'', ''should'',''target'', ''will'' and similar terms and phrases. There are a number offactors that could affect the future operations of Royal Dutch Shell and couldcause those results to differ materially from those expressed in theforward-looking statements included in this document, including (withoutlimitation): (a) price fluctuations in crude oil and natural gas; (b) changesin demand for Shell's products; (c) currency fluctuations; (d) drilling andproduction results; (e) reserves estimates; (f) loss of market share andindustry competition; (g) environmental and physical risks; (h) risksassociated with the identification of suitable potential acquisition propertiesand targets, and successful negotiation and completion of such transactions;(i) the risk of doing business in developing countries and countries subject tointernational sanctions; (j) legislative, fiscal and regulatory developmentsincluding regulatory measures addressing climate change; (k) economic andfinancial market conditions in various countries and regions; (l) politicalrisks, including the risks of expropriation and renegotiation of the terms ofcontracts with governmental entities, delays or advancements in the approval ofprojects and delays in the reimbursement for shared costs; and (m) changes intrading conditions. All forward-looking statements contained in this documentare expressly qualified in their entirety by the cautionary statementscontained or referred to in this section. Readers should not place unduereliance on forward-looking statements. Additional risk factors that may affectfuture results are contained in Royal Dutch Shell's Form 20-F for the yearended December 31, 2012 (available at www.shell.com/investor and www.sec.gov).These risk factors also expressly qualify all forward-looking statementscontained in this document and should be considered by the reader. Eachforward-looking statement speaks only as of the date of this document, August1, 2013. Neither Royal Dutch Shell plc nor any of its subsidiaries undertakeany obligation to publicly update or revise any forward-looking statement as aresult of new information, future events or other information. In light ofthese risks, results could differ materially from those stated, implied orinferred from the forward-looking statements contained in this document. We may have used certain terms, such as resources, in this document that UnitedStates Securities and Exchange Commission (SEC) strictly prohibits us fromincluding in our filings with the SEC. U.S. Investors are urged to considerclosely the disclosure in our Form 20-F, File No 1-32575, available on the SECwebsite www.sec.gov. You can also obtain this form from the SEC by calling1-800-SEC-0330. August 1, 2013 The information in this Report reflects the unaudited consolidated financialposition and results of Royal Dutch Shell plc. The information in this Reportalso represents Royal Dutch Shell plc's half-yearly financial report for thepurposes of the Disclosure and Transparency Rules of the UK Financial ConductAuthority. As such: (1) the interim management report can be found on pages 3to 9 and 20 to 23; (2) the condensed set of financial statements on pages 10 to14; and (3) the directors' responsibility statement on page 24 and theauditors' independent review on page 25. Company No. 4366849, RegisteredOffice: Shell Centre, London, SE1 7NA, England, UK. Contacts: - Investor Relations: International + 31 (0) 70 377 4540; North America +1 713241 1042 - Media: International +44 (0) 207 934 5550; USA +1 713 241 4544