Shell Delivering a Competitive and Innovative Strategy

            Shell Delivering a Competitive and Innovative Strategy

PR Newswire

THE HAGUE, The Netherlands, January 31, 2013

THE HAGUE, The Netherlands, January 31, 2013 /PRNewswire/ --

In an update with investors today, Shell (NYSE:RDS.A)(NYSE:RDS.B) CEO Peter
Voser said the company is delivering on its strategy and he reiterated growth
plans while spelling out strategic priorities. 

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

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

He confirmed Shell's growth agenda, which aims to deliver $175-$200 billion of
total cash flow from operations for 2012-2015, a net capital spending
programme of $120-$130 billion, and a competitive dividend for

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

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

Key operational milestones in 2012:

  oWe continued to focus on safe and reliable operations in all of our
  oCash flow from operations (CFFO) of $46 billion, net capital investment of
    $30 billion, dividends announced of $11 billion.
  oNew start-ups in 2010-12 added $ 6 billion of cash flow and 600 thousand
    barrels of oil equivalent per day (boe/d) of production in 2012, around
    10% and 20% of the company's totals. There is more growth to come from
    these assets.
  oExploration, appraisal and commercial activities in 2012 added ~4 billion
    barrels of oil equivalent (boe) of potential new resources, comprising 1.5
    billion boe in conventional basins, and 2.5 billion boe in resources
    plays, underpinning Shell's longer-term growth plans.
  oRigorous portfolio management continues, with $7 billion of exits from
    non-core positions and strategic partnering, and $5 billion in
    acquisitions in 2012. Divestments in the last 3 years totalled $21
    billion, or around 10% of capital employed, and acquisitions were $17


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.

Outlook for 2013 and beyond

Voser said Shell will continue the strategic drive to grow its upstream
businesses, 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 resources
potential in our active development funnel. Total resources in these two
categories represent 26 years of current production.

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

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

Shell expects to announce a dividend of $0.45 per share for the first quarter
of 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
unique technology, fiscal and market characteristics, and executing a global
portfolio strategy. By looking at strategy through this thematic lens, Shell
can allocate capital and technology most effectively in each play.

  oFor 2013, we expect $33 billion of net capital investment. Organic capital
    investment in 2013 is expected to be $34 billion, with a further $2
    billion for previously-announced acquisitions, and some $3 billion of
    asset sales.
  oCapital allocation, including exploration, will follow a similar pattern
    to 2012, with investment directed to Shell's distinct strategic themes.

       o$12 billion in upstream and downstream engines - the mature,
         cash-generative businesses in Shell, plus corporate.
       oSome $18 billion directed at growth priorities, in integrated gas,
         deep water and resources plays, allocated evenly between these three.
       oFuture opportunities, such as Nigeria onshore, Kazakhstan, Iraq, the
         Arctic and heavy oil will see some $4 billion of total spending in
       oThe increased spending from 2012-13 will be driven by higher
         investment in deep water and upstream engines, reflecting Shell's
         project flow, and an increase in core exploration spending from $6.4
         to $7 billion, allocated to Shell's strategic themes. The 2013
         capital investment programme includes an increase of some $1 billion
         for non-cash capitalized leases, predominantly in deep water growth
       oExploration drilling activity will step up in 2013-14. Shell expects
         to drill over 40 high-potential wells in 18 conventional basins, and
         test 10 key resources plays for tight gas and liquids-rich shales.


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

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

Organic: Our use of the term Organic includes SEC proved oil and gas reserves
excluding changes resulting from acquisitions, divestments and year-average
pricing impact.

The companies in which Royal Dutch Shell plc directly and indirectly owns
investments are separate entities. In this announcement "Shell", "Shell Group"
and "Royal Dutch Shell" are sometimes used for convenience where references
are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise,
the words "we", "us" and "our" are also used to refer to subsidiaries in
general or to those who work for them. These expressions are also used where
no useful purpose is served by identifying the particular company or
companies. "Subsidiaries", "Shell subsidiaries" and "Shell companies" as used
in this announcement refer to companies in which Shell either directly or
indirectly has control, by having either a majority of the voting rights or
the right to exercise a controlling influence. The companies in which Shell
has significant influence 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 jointly controlled entities are also referred to as "equity-accounted
investments". The term "Shell interest" is used for convenience to indicate
the direct and/or indirect (for example, through our 23 per cent shareholding
in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture,
partnership or company, after exclusion of all third-party interest.

This announcement contains forward looking statements concerning the financial
condition, results of operations and businesses of Shell and the Shell Group.
All statements other than statements of historical fact are, or may be deemed
to be, forward-looking statements. Forward-looking statements are statements
of future expectations that are based on management's current expectations and
assumptions and involve known and unknown risks and uncertainties that could
cause actual results, performance or events to differ materially from those
expressed or implied in these statements. Forward-looking statements include,
among other things, statements concerning the potential exposure of Shell and
the Shell Group to market risks and statements expressing management's
expectations, beliefs, estimates, forecasts, projections and assumptions.
These forward looking statements are identified by their use of terms and
phrases such 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 Shell and the Shell Group and could cause those results to differ
materially from those expressed in the forward looking statements included in
this announcement, including (without limitation): (a) price fluctuations in
crude oil and natural gas; (b) changes in demand for Shell's products; (c)
currency fluctuations; (d) drilling and production results; (e) reserves
estimates; (f) loss of market share and industry competition; (g)
environmental and physical risks; (h) risks associated with the identification
of suitable potential acquisition properties and targets, and successful
negotiation and completion of such transactions; (i) the risk of doing
business in developing countries and countries subject to international
sanctions; (j) legislative, fiscal and regulatory developments including
regulatory measures addressing climate change; (k) economic and financial
market conditions in various countries and regions; (l) political risks,
including the risks of expropriation and renegotiation of the terms of
contracts with governmental entities, delays or advancements in the approval
of projects and delays in the reimbursement for shared costs; and (m) changes
in trading conditions. All forward looking statements contained in this
announcement are expressly qualified in their entirety 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-F for the year ended 31
December 2011 (available at and ). These factors also should be considered by the reader.
Each forward looking statement speaks only as of the date of this
announcement, 31 January 2013. Neither Shell nor any of its subsidiaries nor
the Shell Group undertake any obligation to publicly update or revise any
forward looking statement 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 this announcement.

Shell may have used certain terms, such as resources, in this announcement
that the 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
Form 20-F, File No 1-32575, available on the SEC website
You can also obtain these forms from the SEC by calling 1-800-SEC-0330.

January 31, 2013


Investor Relations International + 31(0)70-377-4540; North America

Media International: +44(0)207-934-5550; USA +1-713-241-4544

SOURCE Royal Dutch Shell plc
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