Shell delivering a competitive and innovative strategy

ROYAL DUTCH SHELL PLC - Shell delivering a competitive and innovative strategy

PR Newswire

London, January 31

Shell delivering a competitive and innovative strategy

The Hague, 31 January 2013

In an update with investors today, Shell CEOPeter Voser said the company is delivering on its strategy and he reiteratedgrowth plans while spelling out strategic priorities.

"With the first year of our 2012-2015 growth targets completed, Shell is ontrack for plans we set out in early 2012, despite headwinds last year," saidVoser. "Shell is competitive and innovative. We are delivering a strategy thatothers can't easily repeat, with unique skills in technology and integrationand a worldwide set of opportunities for new investment".

Although the economic outlook remains uncertain for some of Shell's keymarkets, Voser said the prospects for long-term growth in global energy demandremained unchanged, driven by rising world population and improving standardsof living in developing countries. "Meeting this demand growth with clean andaffordable energy is a formidable challenge for our industry and it is a majoropportunity for Shell," he said.

He confirmed Shell's growth agenda, which aims to deliver $175-$200 billion oftotal cash flow from operations for 2012-2015, a net capital spending programmeof $120-$130 billion, and a competitive dividend for shareholders.(1)

Shell's efforts to expand its pipeline of potential energy projects are payingoff, said Voser. "Our drive to increase our options for future projects meansthat we are more constrained by limits on capital than by limits onopportunities," he said. "This allows us to prioritise the most attractiveopportunities, and reconfigure or exit from less attractive ones."

Voser said Shell will continue to maintain its investment programme through theeconomic cycle. "We make long-term decisions on capital allocation and growthchoices, and we look through short-term market volatility," he said. "As ourcash flow momentum builds we expect to increase our dividends for shareholdersin measured, affordable steps. There is more to come from Shell."

Key operational milestones in 2012:

Outlook for 2013 and beyond:

Voser said Shell will continue the strategic drive to grow its upstreambusinesses, with ongoing selective investment in downstream.

At the end of 2012, the company had 12.4 billion boe of resources on stream,averaging 3.4 million boe/d of production, and 20 billion boe of resourcespotential in our active development funnel. Total resources in these twocategories represent 26 years of current production.

Shell has ~30 new projects under construction, which should unlock 7 billionbarrels of resources, and drive continued financial and production growth.Upstream start-ups in 2010-15 are expected to add some $15 billion of cash flowin 2015, in a $100 oil price scenario. Some 50% of our 2013 capital investmentwill contribute to cash flow by 2015.

Oil & gas production is expected to average ~4 million boe/d in 2017-2018compared to 3.3 million boe/d in 2012. Shell's strategy in upstream is designedto drive financial growth, irrespective of production entitlement, withproduction growth regarded as a long term proxy for financial growth.

Shell expects to announce a dividend of $0.45 per share for the first quarterof 2013, a 4.7% increase over the fourth quarter of 2012 and year-ago levels.

Shell is allocating capital according to specific strategic themes, with uniquetechnology, fiscal and market characteristics, and executing a global portfoliostrategy. By looking at strategy through this thematic lens, Shell can allocatecapital and technology most effectively in each play.

(1) Cash Flow From Operations (CFFO) and net capital spending outlook at $80-$100/bbl Brent, and assumes improved US gas and downstream environment from 2012.CFFO excludes working capital movements.

CAUTIONARY STATEMENT

Reserves: Our use of the term "reserves" in this presentation means SEC provedoil and gas reserves.

Resources: Our use of the term "resources" in this presentation includesquantities of oil and gas not yet classified as SEC proved oil and gasreserves. Resources are consistent with the Society of Petroleum Engineers 2Pand 2C definitions.

Organic: Our use of the term Organic includes SEC proved oil and gas reservesexcluding changes resulting from acquisitions, divestments and year-averagepricing impact.

The companies in which Royal Dutch Shell plc directly and indirectly ownsinvestments are separate entities. In this announcement "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 thisannouncement refer to companies in which Shell either directly or indirectlyhas control, by having either a majority of the voting rights or the right toexercise a controlling influence. The companies in which Shell has significantinfluence but not control are referred to as "associated companies" or"associates" and companies in which Shell has joint control are referred to as"jointly controlled entities". In this announcement, associates and jointlycontrolled entities are also referred to as "equity-accounted investments". Theterm "Shell interest" is used for convenience to indicate the direct and/orindirect (for example, through our 23 per cent shareholding in WoodsidePetroleum Ltd.) ownership interest held by Shell in a venture, partnership orcompany, after exclusion of all third-party interest.

This announcement contains forward looking statements concerning the financialcondition, results of operations and businesses of Shell and the Shell Group.All statements other than statements of historical fact are, or may be deemedto be, 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 Shell andthe Shell Group to market risks and statements expressing management'sexpectations, 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", "seek", "should", "target", "will" and similar terms and phrases.There are a number of factors that could affect the future operations of Shelland the Shell Group and could cause those results to differ materially fromthose expressed in the forward looking statements included in thisannouncement, including (without limitation): (a) price fluctuations in crudeoil and natural gas; (b) changes in demand for Shell's products; (c) currencyfluctuations; (d) drilling and production results; (e) reserves estimates; (f)loss of market share and industry competition; (g) environmental and physicalrisks; (h) risks associated with the identification of suitable potentialacquisition properties and targets, and successful negotiation and completionof such transactions; (i) the risk of doing business in developing countriesand countries subject to international sanctions; (j) legislative, fiscal andregulatory developments including regulatory measures addressing climatechange; (k) economic and financial market conditions in various countries andregions; (l) political risks, including the risks of expropriation andrenegotiation of the terms of contracts with governmental entities, delays oradvancements in the approval of projects and delays in the reimbursement forshared costs; and (m) changes in trading conditions. All forward lookingstatements contained in this announcement are expressly qualified in theirentirety by the cautionary statements contained or referred to in this section.Readers should not place undue reliance on forward looking statements.Additional factors that may affect future results are contained in Shell's 20-Ffor the year ended 31 December 2011 (available at www.shell.com/investor andwww.sec.gov ). These factors also should be considered by the reader. Eachforward looking statement speaks only as of the date of this announcement, 31January 2013. Neither Shell nor any of its subsidiaries nor the Shell Groupundertake any obligation to publicly update or revise any forward lookingstatement as a result of new information, future events or other information.In light of these risks, results could differ materially from those stated,implied or inferred from the forward looking statements contained in thisannouncement.

Shell may have used certain terms, such as resources, in this announcement thatthe SEC strictly prohibits Shell from including in its filings with the SEC.U.S. investors are urged to consider closely the disclosure in Shell's Form20-F, File No 1-32575, available on the SEC website www.sec.gov. You can alsoobtain these forms from the SEC by calling 1-800-SEC-0330.

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