ROYAL DUTCH SHELL PLC: 2nd Quarter and Half Year 2016 unaudited results

ROYAL DUTCH SHELL PLC

2^ND QUARTER AND HALF YEAR 2016 UNAUDITED RESULTS

 SUMMARY OF UNAUDITED RESULTS
            Quarters                   $ million              Half year
 Q2 2016  Q1 2016  Q2 2015  %^1                           2016     2015    %
   1,175      484    3,986  -71  Income attributable to    1,659   8,416  -80
                                 shareholders
   (936)      330    (625)       Current cost of           (606)   (294)
                                 supplies (CCS)
                                 adjustment for
                                 Downstream^2
     239      814    3,361  -93  CCS earnings              1,053   8,122  -87
                                 attributable to
                                 shareholders^3
   (806)    (739)    (399)       Identified items^2,4    (1,545)     624
   1,045    1,553    3,760  -72  CCS earnings              2,598   7,498  -65
                                 attributable to
                                 shareholders excluding
                                 identified items
          Of which:
     868      994    1,403       Integrated Gas            1,862   2,894
 (1,325)  (1,437)    (469)       Upstream                (2,762)   (664)
   1,816    2,010    2,961       Downstream                3,826   5,607
   (314)     (14)    (135)       Corporate and             (328)   (339)
                                 Non-controlling
                                 interest
   2,292      661    6,050  -62  Cash flow from            2,953  13,156  -78
                                 operating activities
    0.03     0.11     0.53  -94  Basic CCS earnings per     0.14    1.29  -89
                                 share ($)
    0.06     0.22     1.06       Basic CCS earnings per     0.28    2.58
                                 ADS ($)
    0.13     0.22     0.60  -78  Basic CCS earnings per     0.34    1.19  -71
                                 share excl. identified
                                 items^4 ($)
    0.26     0.44     1.20       Basic CCS earnings per     0.68    2.38
                                 ADS excl. identified
                                 items^4 ($)
    0.47     0.47     0.47    -  Dividend per share ($)     0.94    0.94    -
    0.94     0.94     0.94    -  Dividend per ADS ($)       1.88    1.88    -
  1. Q2 on Q2 change
  2. Attributable to shareholders
  3. CCS earnings are defined in Note 3 and CCS earnings attributable to
     shareholders in Definition A.
  4. See page 5 and Definition C. Comparative information has been restated.

  o Following the acquisition on February 15, 2016, BG Group plc (“BG”) has
    been consolidated within Royal Dutch Shell’s results.
  o Royal Dutch Shell’s second quarter 2016 CCS earnings attributable to
    shareholders were $0.2 billion compared with $3.4 billion for the same
    quarter a year ago.
  o Second quarter 2016 CCS earnings attributable to shareholders excluding
    identified items were $1.0 billion compared with $3.8 billion for the
    second quarter 2015, a decrease of 72%.
  o Compared with the second quarter 2015, CCS earnings attributable to
    shareholders excluding identified items were impacted by the decline in
    oil, gas and LNG prices, the depreciation step-up resulting from the BG
    acquisition, weaker refining industry conditions, and increased taxation.
    Earnings benefited from increased production volumes from BG assets.
  o Second quarter 2016 basic CCS earnings per share excluding identified
    items decreased by 78% versus the second quarter 2015.
  o Cash flow from operating activities for the second quarter 2016 was $2.3
    billion, which included negative working capital movements of $2.5
    billion.
  o Total dividends distributed to shareholders in the quarter were $3.7
    billion, of which $1.2 billion were settled by issuing 50.5 million A
    shares under the Scrip Dividend Programme.
  o Gearing at the end of the second quarter 2016 was 28.1% versus 12.7% at
    the end of the second quarter 2015. This increase mainly reflects the
    impact of the acquisition of BG.
  o A second quarter 2016 dividend has been announced of $0.47 per ordinary
    share and $0.94 per American Depositary Share (“ADS”).

Royal Dutch Shell Chief Executive Officer Ben van Beurden commented:

“Downstream and Integrated Gas businesses contributed strongly to the results,
alongside Shell’s self-help programme. However, lower oil prices continue to
be a significant challenge across the business, particularly in the Upstream.

We are managing the company through the down-cycle by reducing costs, by
delivering on lower and more predictable investment levels, executing our
asset sales plans and starting up profitable new projects. At the same time,
integration of Shell and BG is making strong progress, and our operating
performance continues to further improve.

We are making significant and lasting changes to Shell’s working practices and
cost structure. Shell is firmly on track to deliver a $40 billion underlying
operating cost run rate at the end of 2016.

Looking through the cycle, our investment plans and portfolio actions are
focused firmly on reshaping Shell into a world-class investment case through
stronger, sustained and growing free cash flow per share.”

 SUMMARY OF CCS EARNINGS EXCLUDING IDENTIFIED ITEMS
            Quarters                    $ million             Half year
 Q2 2016  Q1 2016  Q2 2015  %^1                           2016    2015    %
     239      814    3,361   -93  CCS earnings             1,053  8,122   -87
                                  attributable to
                                  shareholders
                                  Of which:
     982      905    1,335   -26  Integrated Gas           1,887  2,474   -24
 (1,974)  (1,350)    (561)  -252  Upstream               (3,324)    839  -496
   1,717    1,700    2,746   -37  Downstream               3,417  5,260   -35
   1,490    1,294    2,243   -34  Oil Products             2,784  4,357   -36
     227      406      503   -55  Chemicals                  633    903   -30
   (486)    (441)    (159)  -206  Corporate and            (927)  (451)  -106
                                  Non-controlling
                                  interest
   (806)    (739)    (399)        Identified items^2     (1,545)    624
                                  Of which:
     114     (89)     (68)        Integrated Gas              25  (420)
   (649)       87     (92)        Upstream                 (562)  1,503
    (99)    (310)    (215)        Downstream               (409)  (347)
    (78)    (339)    (155)        Oil Products             (417)  (278)
    (21)       29     (60)        Chemicals                    8   (69)
   (172)    (427)     (24)        Corporate and            (599)  (112)
                                  Non-controlling
                                  interest
   1,045    1,553    3,760   -72  CCS earnings             2,598  7,498   -65
                                  attributable to
                                  shareholders
                                  excluding identified
                                  items
                                  Of which:
     868      994    1,403   -38  Integrated Gas           1,862  2,894   -36
 (1,325)  (1,437)    (469)  -183  Upstream               (2,762)  (664)  -316
   1,816    2,010    2,961   -39  Downstream               3,826  5,607   -32
   1,568    1,633    2,398   -35  Oil Products             3,201  4,635   -31
     248      377      563   -56  Chemicals                  625    972   -36
   (314)     (14)    (135)  -133  Corporate and            (328)  (339)    +3
                                  Non-controlling
                                  interest
  1. Q2 on Q2 change
  2. See page 5. Comparative information has been restated.

SECOND QUARTER 2016 PORTFOLIO DEVELOPMENTS

Integrated Gas

During the quarter, Mahanagar Gas Limited (MGL), a joint venture between BG
Asia Pacific Holdings (a Shell subsidiary) and GAIL (India) Limited, completed
an initial public offering (IPO) for 25% of the equity for a total of around
$154 million (Shell share $77 million). The IPO was an obligation under the
original approval/ licensing permits granted by the Government of India’s
Foreign Investment Promotion Board in 1994. Immediately prior to the IPO, the
Government of Maharashtra increased its interest to 10% as a result of the
conversion of the Compulsory Convertible Debentures resulting in a dilution
for each of Shell and GAIL to 45%. After completion of both transactions,
Shell and GAIL each hold a 32.5% interest in MGL (previously 49.75% each),
with a 10% interest held by the Government of Maharashtra (previously 0.5%)
and 25% held by public shareholders (previously 0%).

During the quarter, the M?ui joint venture (Shell interest 83.75%) completed
the sale of the M?ui onshore natural gas pipeline in New Zealand, to
infrastructure funds managed by First State Investments for a consideration of
$0.2 billion.

In July, the LNG Canada joint venture announced that the joint venture
participants – Shell, PetroChina, Mitsubishi Corporation and Kogas – decided
to delay final investment decision on the LNG Canada project (Shell interest
50%) that was planned for the end of 2016.

Also in July, Shell decided to delay final investment decision on the Lake
Charles LNG project (Shell capacity interest 100%) that was planned for 2016,
in the United States. The Lake Charles LNG project is proposed to convert the
existing Lake Charles LNG regasification facility owned by Energy Transfer to
a liquefaction facility.

Upstream

Shell had continued success in its exploration programme with 2 discoveries in
Oman and the United States. This included a notable oil discovery in the
United States with the Shell-operated Fort Sumter well (Shell interest 100%)
in the Gulf of Mexico. The initial estimated recoverable resources for the
Fort Sumter well are more than 125 million barrels of oil equivalent.

In July, the non-operated ML South development (Shell interest 35%) in Brunei
reached first production. The expected peak production from this development
is around 35 thousand barrels of oil equivalent per day (“boe/d”).

Also in July, the non-operated Lula Central production system was started up
with the interconnection of the first production well to FPSO Cidade de
Saquarema (Shell interest 25%), the eighth FPSO in the Santos Basin pre-salt
offshore Brazil. FPSO Cidade de Saquarema has a processing capacity of 150
thousand barrels of oil and compressing capacity of up to 212 million standard
cubic feet of gas per day.

Downstream

During the quarter, Shell announced a final investment decision to build a
major petrochemical complex, comprising an ethylene cracker with polyethylene
derivatives unit in Pennsylvania, USA. Main construction will start
approximately 18 months from the decision date in order to manage capital
spending, with commercial production expected to begin early in the next
decade.

Shell announced that it has completed the sale of Dansk Fuels in Denmark for a
consideration of $0.3 billion. Dansk Fuels comprises retail, commercial fuels,
commercial fleet and aviation businesses, and products trading and supply
activities associated with those businesses. 

In the United States, Shell Midstream Partners, L.P. acquired additional
interests in Zydeco Pipeline Company, Colonial Pipeline Company, and Bengal
Pipeline Company for $700 million from Shell Pipeline Company. The acquisition
increased Shell Midstream Partners’ ownership interest in Zydeco from 62.5% to
92.5%, in Colonial from 3% to 6%, and in Bengal from 49% to 50%.

Shell also completed the sale of an additional 3.59% interest in Shell
Midstream Partners, L.P. to public investors via the issuance of an additional
12,075,000 LP units for net proceeds of $398 million.

KEY FEATURES OF THE SECOND QUARTER 2016

  o Second quarter 2016 CCS earnings attributable to shareholders were $239
    million, 93% lower than for the same quarter a year ago.
  o Second quarter 2016 CCS earnings attributable to shareholders excluding
    identified items were $1,045 million compared with $3,760 million for the
    second quarter 2015, a decrease of 72%.
  o Basic CCS earnings per share for the second quarter 2016 decreased by 94%
    versus the same quarter a year ago.
  o Basic CCS earnings per share excluding identified items for the second
    quarter 2016 decreased by 78% versus the same quarter a year ago.
  o Cash flow from operating activities for the second quarter 2016 was $2.3
    billion, which included negative working capital movements of $2.5
    billion, compared with $6.1 billion for the same quarter last year.
  o Capital investment (see Definition C) for the second quarter 2016 was $6.3
    billion. Half year 2016 capital investment was $65.3 billion, which
    included $52.9 billion related to the acquisition of BG. Organic capital
    investment for the full year 2016 is expected to be $29 billion, compared
    with combined capital investment of $47 billion in 2014.
  o Divestments (see Definition D) for the second quarter 2016 were $1.0
    billion.
  o Operating expenses (see Definition G) for the second quarter 2016
    increased by $1.7 billion versus the same quarter a year ago, and included
    $1.4 billion related to redundancy and restructuring charges and $0.4
    billion related to a provision for onerous contracts. Compared with the
    second quarter 2015, operating expenses excluding identified items
    decreased by $0.9 billion before the increase of $1.0 billion due to the
    consolidation of BG. Operating expenses are trending towards an underlying
    run rate of $40 billion by the end of 2016.
  o Total dividends distributed to shareholders in the second quarter 2016
    were $3.7 billion, of which $1.2 billion were settled by issuing 50.5
    million A shares under the Scrip Dividend Programme.
  o Return on average capital employed on a reported income basis (see
    Definition E) was a negative -1.4% at the end of the second quarter 2016
    compared with 6.3% at the end of the second quarter 2015. Return on
    average capital employed on a CCS basis excluding identified items was
    2.5% at the end of the second quarter 2016 compared with 7.6% at the end
    of the second quarter 2015.
  o Gearing (see Definition F) was 28.1% at the end of the second quarter 2016
    versus 12.7% at the end of the second quarter 2015. This increase mainly
    reflects the impact of the BG acquisition including 1.6% related to the
    recognition of associated finance leases in the first quarter of 2016.
  o Global liquids realisations were 29% lower and global natural gas
    realisations were 28% lower than for the same quarter a year ago.
  o Oil and gas production for the second quarter 2016 was 3,508 thousand
    boe/d, an increase of 28% compared with the second quarter 2015. The
    impact of BG on the second quarter 2016 production was an increase of 768
    thousand boe/d. Excluding the impact of divestments, curtailment and
    underground storage utilisation at NAM in the Netherlands, a Malaysia PSC
    expiry, PSC price effects, the Woodside accounting change (see page 12),
    and security impacts in Nigeria, second quarter 2016 production increased
    by 30% compared with the same period last year, or 2% excluding BG.
  o LNG liquefaction volumes of 7.57 million tonnes for the second quarter
    2016, of which BG contributed 2.42 million tonnes, were 39% higher than
    for the same quarter a year ago.
  o LNG sales volumes of 14.25 million tonnes for the second quarter 2016 were
    52% higher than for the same quarter a year ago, mainly reflecting Shell’s
    enlarged portfolio after the acquisition of BG.
  o Oil products sales volumes for the second quarter 2016 were 1% higher than
    for the second quarter 2015.
  o Chemicals sales volumes for the second quarter 2016 decreased by 2%
    compared with the same quarter a year ago.
  o Supplementary financial and operational disclosure for this quarter is
    available at www.shell.com/investor.

SUMMARY OF IDENTIFIED ITEMS

With effect from 2016, identified items include the impact of exchange rate
movements on certain deferred tax balances, as set out in Definition B. The
comparative information in this Report has been restated following this
change.

CCS earnings attributable to shareholders for the second quarter 2016
reflected the following items, which in aggregate amounted to a net charge of
$806 million (compared with a net charge of $399 million for the second
quarter 2015), as summarised below:

  o Integrated Gas earnings included a net gain of $114 million, primarily
    reflecting the impact of some $580 million following a change in
    accounting classification for Woodside (see page 12), from an associate to
    an investment in securities. As a consequence, SEC proved reserves of 103
    million boe at December 31, 2015, have been de-booked and production
    decreases by 25 thousand boe/d. Earnings were also impacted by divestment
    gains of some $200 million. This was partly offset by redundancy and
    restructuring charges of some $250 million, a charge of some $220 million
    related to the impact of the weakening Australian dollar on a deferred tax
    position, and a net charge on fair value accounting of certain commodity
    derivatives and gas contracts of some $190 million. Integrated Gas
    earnings for the second quarter 2015 included a net charge of $68 million.
  o Upstream earnings included a net charge of $649 million, primarily
    reflecting redundancy and restructuring charges of some $570 million,
    other items including a provision for onerous contracts of some $240
    million, impairments of some $140 million and a net charge on fair value
    accounting of certain commodity derivatives and gas contracts of some $80
    million. These charges were partly offset by a gain of some $360 million
    related to the impact of the strengthening Brazilian real on a deferred
    tax position. Upstream earnings for the second quarter 2015 included a net
    charge of $92 million.
  o Downstream earnings included a net charge of $99 million, primarily
    reflecting redundancy and restructuring charges of some $250 million and
    impairment charges of some $50 million, partly offset by other tax-related
    credits of some $150 million. Downstream earnings for the second quarter
    2015 included a net charge of $215 million.
  o Corporate results and Non-controlling interest included a net charge of
    $172 million, mainly reflecting the impact of the strengthening Brazilian
    real on deferred tax positions related to financing of the Upstream
    business. Earnings for the second quarter 2015 included a net charge of
    $24 million.

Identified items for the first quarter 2016 and 2015 can be found on page 27.

EARNINGS BY SEGMENT

 INTEGRATED GAS
            Quarters                    $ million              Half year
 Q2 2016  Q1 2016  Q2 2015  %^1                             2016   2015    %
     868      994    1,403  -38  Integrated Gas earnings    1,862  2,894  -36
                                 excluding identified
                                 items
     982      905    1,335  -26  Integrated Gas earnings    1,887  2,474  -24
   2,730    2,657    1,444  +89  Integrated Gas cash flow   5,387  3,978  +35
                                 from operating
                                 activities
   1,153    1,051    1,313  -12  Integrated Gas capital     2,204  2,614  -16
                                 investment excluding BG
                                 acquisition impact
       -   21,773        -       Integrated Gas            21,773      -
                                 BG-related capital
                                 investment
     219      224      199  +10  Liquids production           222    200  +11
                                 available for sale
                                 (thousand b/d)
   3,831    3,532    2,350  +63  Natural gas production     3,682  2,398  +54
                                 available for sale
                                 (million scf/d)
     880      833      604  +46  Total production             856    613  +40
                                 available for sale
                                 (thousand boe/d)
    7.57     7.04     5.46  +39  LNG liquefaction volumes   14.61  11.63  +26
                                 (million tonnes)
   14.25    12.29     9.40  +52  LNG sales volumes          26.54  19.21  +38
                                 (million tonnes)
  1. Q2 on Q2 change

Second quarter Integrated Gas earnings excluding identified items were $868
million compared with $1,403 million a year ago. Identified items were a net
gain of $114 million, compared with a net charge of $68 million for the second
quarter 2015 (see page 5).

Compared with the second quarter 2015, earnings excluding identified items
were impacted by the decline in oil and LNG prices, and increased depreciation
including a step-up resulting from the BG acquisition. The consolidation of BG
resulted in higher operating expenses. This was partly offset by higher LNG
and liquids production volumes, related to the contribution of BG assets.

Second quarter 2016 production was 880 thousand boe/d compared with 604
thousand boe/d a year ago. Liquids production increased by 10% and natural gas
production increased by 63% compared with the second quarter 2015.

LNG liquefaction volumes of 7.57 million tonnes increased by 39% compared with
the same quarter a year ago, mainly reflecting the impact of the acquisition
of BG, including an increase associated with Queensland Curtis LNG in
Australia and Atlantic LNG in Trinidad and Tobago.

LNG sales volumes of 14.25 million tonnes increased by 52% compared with the
same quarter a year ago, mainly reflecting Shell’s enlarged portfolio after
the acquisition of BG.

Half year Integrated Gas earnings excluding identified items were $1,862
million compared with $2,894 million for the first half year 2015. Identified
items were a net gain of $25 million, compared with a net charge of $420
million for the first half year 2015 (see page 5).

Compared with the first half year 2015, Integrated Gas earnings excluding
identified items were impacted by the decline in oil and LNG prices and the
Malaysia LNG Dua JVA expiry. The consolidation of BG resulted in higher
operating expenses and a step-up in depreciation. This was partly offset by
increased production volumes mainly as a result of the contribution of BG
assets and higher uptime at Pearl GTL in Qatar, and lower well write-offs.

Half year 2016 production was 856 thousand boe/d compared with 613 thousand
boe/d for the same period a year ago. Liquids production increased by 11% and
natural gas production increased by 54% compared with the first half year
2015.

LNG liquefaction volumes of 14.61 million tonnes were 26% higher than for the
first half year 2015, mainly reflecting the impact of the acquisition of BG,
including an increase associated with Queensland Curtis LNG in Australia,
partly offset by lower feedgas availability and the expiry of the Malaysia LNG
Dua JVA.

LNG sales volumes of 26.54 million tonnes increased by 38% compared with the
first half year 2015, mainly reflecting Shell’s enlarged portfolio after the
acquisition of BG.

 UPSTREAM
            Quarters                    $ million             Half year
 Q2 2016  Q1 2016  Q2 2015  %^1                           2016    2015    %
 (1,325)  (1,437)    (469)  -183  Upstream earnings      (2,762)  (664)  -316
                                  excluding identified
                                  items
 (1,974)  (1,350)    (561)  -252  Upstream earnings      (3,324)    839  -496
   (297)      448      648  -146  Upstream cash flow         151  2,243   -93
                                  from operating
                                  activities
   3,700    3,907    4,603   -20  Upstream capital         7,607  9,245   -18
                                  investment excluding
                                  BG acquisition impact
       -   31,131        -        Upstream BG-related     31,131      -
                                  capital investment
   1,526    1,557    1,233   +24  Liquids production       1,541  1,287   +20
                                  available for sale
                                  (thousand b/d)
   6,395    7,373    5,184   +23  Natural gas              6,884  6,075   +13
                                  production available
                                  for sale (million
                                  scf/d)
   2,628    2,828    2,127   +24  Total production         2,728  2,335   +17
                                  available for sale
                                  (thousand boe/d)
  1. Q2 on Q2 change

Second quarter Upstream earnings excluding identified items were a loss of
$1,325 million compared with a loss of $469 million a year ago. Identified
items were a net charge of $649 million compared with a net charge of $92
million for the second quarter 2015 (see page 5).

Compared with the second quarter 2015, earnings excluding identified items
were impacted by the decline in oil and gas prices and depreciation step-up
resulting from the BG acquisition. This was partly offset by increased
production volumes, mainly from BG assets and improved operational
performance. Operating expenses and exploration expenses were lower, as steps
taken by the company to reduce these costs more than offset the increases due
to the consolidation of BG. 

Second quarter 2016 production was 2,628 thousand boe/d compared with 2,127
thousand boe/d a year ago. Liquids production increased by 24% and natural gas
production increased by 23% compared with the second quarter 2015, driven by
the impact of BG.

New field start-ups and the continuing ramp-up of existing fields, in
particular the Corrib gas field in Ireland, and Erha North ph2 in Nigeria,
contributed some 53 thousand boe/d to production compared with the second
quarter 2015.

Half year Upstream earnings excluding identified items were a loss of $2,762
million compared with a loss of $664 million for the same period a year ago.
Identified items were a net charge of $562 million compared with a net gain of
$1,503 million for the first half year 2015 (see page 5).

Compared with the first half year 2015, earnings excluding identified items
were impacted by the decline in oil and gas prices, and increased depreciation
mainly related to a step-up resulting from the BG acquisition. This was partly
offset by increased production volumes mainly from BG assets. Exploration
expense and operating expenses were lower, as steps taken by the company to
reduce these costs more than offset the increases due to the consolidation of
BG.

Half year 2016 production was 2,728 thousand boe/d compared with 2,335
thousand boe/d for the same period last year. Liquids production increased by
20% and natural gas production increased by 13% compared with the first half
year 2015.

New field start-ups and the continuing ramp-up of existing fields, in
particular Erha North ph2 in Nigeria, the Corrib gas field in Ireland, and
North American shales, contributed some 58 thousand boe/d to production
compared with the first half year 2015.

 DOWNSTREAM
            Quarters                    $ million              Half year
 Q2 2016  Q1 2016  Q2 2015  %^1                            2016   2015    %
   1,816    2,010    2,961  -39  Downstream earnings       3,826  5,607   -32
                                 excluding identified
                                 items^2
                                 Of which:
   1,568    1,633    2,398  -35  Oil Products              3,201  4,635   -31
     248      377      563  -56  Chemicals                   625    972   -36
   1,717    1,700    2,746  -37  Downstream earnings^2     3,417  5,260   -35
     571  (1,434)    3,816  -85  Downstream cash flow      (863)  5,370  -116
                                 from operating
                                 activities
   1,389    1,092    1,085  +28  Downstream capital        2,481  1,934   +28
                                 investment
   2,648    2,645    2,944  -10  Refinery processing       2,646  2,908    -9
                                 intake (thousand b/d)
   6,595    6,225    6,531   +1  Oil products sales        6,410  6,423     -
                                 volumes (thousand b/d)
   4,248    4,050    4,326   -2  Chemicals sales volumes   8,298  8,518    -3
                                 (thousand tonnes)
  1. Q2 on Q2 change
  2. Earnings are presented on a CCS basis

Second quarter Downstream earnings excluding identified items were $1,816
million compared with $2,961 million for the second quarter 2015. Identified
items were a net charge of $99 million, compared with a net charge of $215
million for the second quarter 2015 (see page 5).

Compared with the second quarter 2015, Downstream earnings excluding
identified items were mainly impacted by weaker refining industry conditions,
increased taxation, and lower Chemicals margins. Downstream earnings benefited
from lower costs, including the impact of favourable exchange rate effects and
divestments.

Oil Products

  o Refining & Trading earnings excluding identified items were $459 million
    in the second quarter 2016 compared with $1,313 million for the same
    period last year. Second quarter 2016 earnings were impacted by lower
    realised refining margins, reflecting the weaker global refining industry
    conditions due to oversupply and high inventory levels, and weaker
    operating performance, and increased taxation.  

Refinery intake volumes were 10% lower compared with the same quarter last
year. Excluding portfolio impacts, refinery intake volumes were 9% lower
compared with the same period a year ago. Refinery availability decreased to
89% compared with 95% in the second quarter 2015, mainly as a result of
increased maintenance.

  o Marketing earnings excluding identified items were $1,109 million in the
    second quarter 2016 compared with $1,085 million for the same period a
    year ago. Second quarter 2016 earnings benefited from lower costs and
    stronger underlying unit margins, offsetting the impact of adverse
    exchange rate effects and divestments.

Oil products sales volumes increased by 1% compared with the same period a
year ago, reflecting higher trading volumes partly offset by lower marketing
volumes.

Chemicals

  o Chemicals earnings excluding identified items were $248 million in the
    second quarter 2016 compared with $563 million for the same period last
    year. Second quarter 2016 earnings were mainly impacted by weaker base
    chemicals industry conditions in the United States and the impact of unit
    shutdowns at the Bukom chemical site in Singapore, partly offset by
    recovery at the Moerdijk chemical site in the Netherlands.

Chemicals sales volumes decreased by 2% compared with the same quarter last
year, mainly as a result of weaker intermediates demand and reduced
availability driven by unit shutdowns at Bukom, partly offset by recovery at
Moerdijk. Chemicals manufacturing plant availability decreased to 85% from 86%
in the second quarter 2015, mainly reflecting unit shutdowns at Bukom, partly
offset by recovery at Moerdijk.

Half year Downstream earnings excluding identified items were $3,826 million
compared with $5,607 million for the same period a year ago. Identified items
were a net charge of $409 million, compared with a net charge of $347 million
for the first half year 2015 (see page 5).

Compared with the first half year 2015, Downstream earnings excluding
identified items were mainly impacted by weaker refining industry conditions,
increased taxation, and lower Chemicals margins. Downstream earnings benefited
from lower costs, including the impact of favourable exchange rate effects and
divestments.

Oil Products

  o Refining & Trading earnings excluding identified items were $1,121 million
    in the first half year 2016 compared with $2,575 million for the same
    period last year. Half year 2016 earnings were impacted by lower realised
    refining margins, reflecting the weaker global refining industry
    conditions due to oversupply and high inventory levels, and weaker
    operating performance.

Refinery intake volumes were 9% lower compared with the first half year 2015.
Excluding portfolio impacts, refinery intake volumes were 7% lower compared
with the same period a year ago. Refinery availability decreased to 89%
compared with 95% for the first half year 2015, mainly as a result of
increased maintenance.

  o Marketing earnings excluding identified items were $2,080 million in the
    first half year 2016 compared with $2,060 million for the same period a
    year ago. Half year 2016 earnings benefited from stronger underlying unit
    margins and lower costs, offsetting the impact of adverse exchange rate
    effects and divestments. Earnings were impacted by increased taxation.

Oil products sales volumes were in line with the first half year 2015.

Chemicals

  o Chemicals earnings excluding identified items were $625 million in the
    first half year 2016 compared with $972 million for the same period last
    year. Half year 2016 earnings were primarily impacted by weaker base
    chemicals industry conditions in the US and the impact of unit shutdowns
    at the Bukom chemical site in Singapore, partly offset by recovery at the
    Moerdijk chemical site in the Netherlands.

Half year Chemicals sales volumes decreased by 3% compared with the same
period last year, mainly as a result of weaker intermediates demand and
reduced availability driven by unit shutdowns at Bukom, partly offset by
recovery at Moerdijk. Chemicals manufacturing plant availability increased to
86% from 85% in the first half year 2015, mainly reflecting recovery at
Moerdijk, partly offset by unit shutdowns at Bukom.

 CORPORATE AND NON-CONTROLLING INTEREST
                Quarters                       $ million          Half year
 Q2 2016  Q1 2016  Q2 2015                                       2016   2015
   (314)     (14)    (135)  Corporate and Non-controlling        (328)  (339)
                            interest earnings excl. identified
                            items
                            Of which:
   (234)       69     (41)  Corporate                            (165)  (124)
    (80)     (83)     (94)  Non-controlling interest             (163)  (215)
   (486)    (441)    (159)  Corporate and Non-controlling        (927)  (451)
                            interest earnings

Second quarter Corporate results and Non-controlling interest excluding
identified items were a loss of $314 million, compared with a loss of $135
million for the same period last year. Identified items for the second quarter
2016 were a net charge of $172 million, and earnings for the second quarter
2015 included a net charge of $24 million (see page 5).

Compared with the second quarter 2015, Corporate results excluding identified
items mainly reflected higher net interest expense and adverse exchange rate
effects, partly offset by higher tax credits.

Half year Corporate results and Non-controlling interest excluding identified
items were a loss of $328 million, compared with a loss of $339 million for
the same period last year. Identified items for the first half year 2016 were
a net charge of $599 million, and earnings for the first half year 2015
included a net charge of $112 million (see page 5).

Compared with the first half year 2015, Corporate results excluding identified
items mainly reflected favourable exchange rate effects, offset by higher net
interest expense and costs, and lower tax credits.

OUTLOOK FOR THE THIRD QUARTER 2016

Compared with the third quarter 2015, Integrated Gas earnings are expected to
be negatively impacted by a reduction of some 15 thousand boe/d associated
with the impact of maintenance.

Compared with the third quarter 2015, Upstream earnings are expected to be
negatively impacted by a reduction of some 35 thousand boe/d associated with
sabotage incidents and repairs in Nigeria. Earnings could be further impacted
if the security conditions continue to deteriorate.

Refinery availability is expected to marginally increase in the third quarter
2016 as a result of lower planned maintenance compared with the same period a
year ago. Chemicals manufacturing plant availability is expected to increase
in the third quarter 2016 driven by the planned restart of the Bukom chemical
site in Singapore compared with the third quarter 2015, which was heavily
impacted by unit shutdowns at the Moerdijk chemical site in the Netherlands.

As a result of divestments in Denmark, Norway and France, Oil products sales
volumes are expected to decrease by some 200 thousand barrels per day compared
with the third quarter 2015.

Compared with the third quarter 2015, the BG purchase price allocation is
expected to increase depreciation by up to $0.3 billion.

Following the completion of the BG acquisition, the sensitivities to earnings
have been updated:

  o Integrated Gas - around $2 billion per annum for every $10 per barrel
    movement in Brent
  o Upstream - around $3 billion per annum for every $10 per barrel movement
    in Brent

FORTHCOMING EVENTS

Third quarter 2016 results and third quarter 2016 dividend are scheduled to be
announced on November 1, 2016. Shell will host a North America Investor Day on
November 8, 2016 in New York City.

UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

 CONSOLIDATED STATEMENT OF INCOME
               Quarters                      $ million          Half year
 Q2 2016  Q1 2016  Q2 2015                                    2016     2015
  58,415   48,554   72,402  Revenue^1                        106,969  138,108
     946      789    1,136  Share of profit of joint           1,735    2,541
                            ventures and associates
     910      389      412  Interest and other income          1,299    2,147
  60,271   49,732   73,950  Total revenue and other income   110,003  142,796
  40,362   33,286   52,441  Purchases                         73,648   99,866
   8,076    6,765    6,506  Production and manufacturing      14,841   13,161
                            expenses
   3,227    3,106    3,076  Selling, distribution and          6,333    5,970
                            administrative expenses
     243      243      252  Research and development             486      505
     535      457      964  Exploration                          992    1,764
   6,097    6,147    4,673  Depreciation, depletion and       12,244    9,277
                            amortisation
     770      370      466  Interest expense                   1,140      842
  59,310   50,374   68,378  Total expenditure                109,684  131,385
     961    (642)    5,572  Income/(loss) before taxation        319   11,411
   (319)  (1,097)    1,458  Taxation charge/(credit)         (1,416)    2,760
   1,280      455    4,114  Income/(loss) for the period^1     1,735    8,651
     105     (29)      128  Income/(loss) attributable to         76      235
                            non-controlling interest
   1,175      484    3,986  Income/(loss) attributable to      1,659    8,416
                            Royal Dutch Shell plc
                            shareholders
    0.15     0.07     0.63  Basic earnings per share^2          0.22     1.34
    0.15     0.07     0.62  Diluted earnings per share^2        0.22     1.32
  1. See Note 3 “Segment information”
  2. See Note 4 “Earnings per share”

   

 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
               Quarters                     $ million           Half year
  Q2 2016    Q1 2016    Q2 2015                               2016     2015
     1,280        455      4,114  Income/(loss) for the        1,735    8,651
                                  period
                                  Other comprehensive
                                  income net of tax:
                                  Items that may be
                                  reclassified to income in
                                  later periods:
     (434)      2,319      1,668    o Currency translation     1,885  (2,531)
                                      differences
     (128)       (12)      (129)    o Unrealised               (140)    (264)
                                      gains/(losses) on
                                      securities
     (538)        324        133    o Cash flow hedging        (214)      124
                                      gains/(losses)
     (863)        136          -    o Net investment           (727)        -
                                      hedging
                                      gains/(losses)^1
      (77)          8       (25)    o Share of other            (69)     (18)
                                      comprehensive
                                      income/(loss) of
                                      joint  ventures and
                                      associates
   (2,040)      2,775      1,647  Total                          735  (2,689)
                                  Items that are not
                                  reclassified to income in
                                  later periods:
   (2,795)    (1,634)      5,496    o Retirement benefits    (4,429)    4,180
                                      remeasurements
   (4,835)      1,141      7,143  Other comprehensive        (3,694)    1,491
                                  income/(loss) for the
                                  period
   (3,555)      1,596     11,257  Comprehensive              (1,959)   10,142
                                  income/(loss) for the
                                  period
        96          4        161  Comprehensive                  100      224
                                  income/(loss)
                                  attributable to
                                  non-controlling interest
   (3,651)      1,592     11,096  Comprehensive              (2,059)    9,918
                                  income/(loss)
                                  attributable to Royal
                                  Dutch Shell plc
                                  shareholders
  1. See Note 1 “Basis of preparation”
 CONDENSED CONSOLIDATED BALANCE SHEET
                                                       $ million
                                          Jun 30,    Mar 31, 2016^1   Dec 31,
                                           2016^1                      2015
 Assets
 Non-current assets
 Intangible assets                          21,093            21,327    6,283
 Property, plant and equipment             242,907           245,133  182,838
 Joint ventures and associates^2            33,850            35,654   30,150
 Investments in securities^2                 5,709             3,474    3,416
 Deferred tax                               15,812            15,311   11,033
 Retirement benefits                         1,645             3,108    4,362
 Trade and other receivables^3              11,030            11,047    8,717
                                           332,046           335,054  246,799
 Current assets
 Inventories                                20,626            17,396   15,822
 Trade and other receivables^3,4            49,547            47,872   45,784
 Cash and cash equivalents                  15,222            11,019   31,752
                                            85,395            76,287   93,358
 Total assets                              417,441           411,341  340,157
 Liabilities
 Non-current liabilities
 Debt^5                                     79,466            73,005   52,849
 Trade and other payables^3                  4,393             3,917    4,528
 Deferred tax                               15,904            16,677    8,976
 Retirement benefits                        15,882            13,516   12,587
 Decommissioning and other provisions       31,825            32,710   26,148
                                           147,470           139,825  105,088
 Current liabilities
 Debt                                       10,863             7,868    5,530
 Trade and other payables^3,4               52,669            51,069   52,770
 Taxes payable                               8,291            10,387    8,233
 Retirement benefits                           392               401      350
 Decommissioning and other provisions        5,250             3,777    4,065
                                            77,465            73,502   70,948
 Total liabilities                         224,935           213,327  176,036
 Equity attributable to Royal Dutch        190,670           196,521  162,876
 Shell plc shareholders
 Non-controlling interest                    1,836             1,493    1,245
 Total equity                              192,506           198,014  164,121
 Total liabilities and equity              417,441           411,341  340,157
  1. See Note 2 “Acquisition of BG Group plc”
  2. During the second quarter 2016, management concluded that a change in
     Shell’s level of involvement over Woodside’s financial and operating
     policy decisions resulted in no longer having significant influence. Its
     classification was therefore changed from an associate (carrying amount:
     $2,144 million) to an investment in securities (carrying amount at fair
     value: $2,442 million). The consequential revaluation and related
     release of cumulative currency translation differences were reported in
     interest and other income in the Consolidated Statement of Income.
  3. See Note 7 “Derivative contracts”
  4. The amounts at March 31, 2016 have been reduced by $4,963 million in
     order to appropriately reflect certain contracts on a net basis which
     were previously presented gross.
  5. During the second quarter 2016, debt of $9,246 million was issued under
     the US shelf registration and EMTN programme.

 

 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                    Equity attributable to Royal Dutch Shell plc
                                    shareholders
    $ million       Share    Shares     Other     Retained   Total      Non-       Total
                  capital^1  held in  reserves^2  earnings           controlling  equity
                              trust                                   interest
 At January 1,          546    (584)    (17,186)   180,100  162,876        1,245  164,121
 2016
 Comprehensive            -        -     (3,718)     1,659  (2,059)          100  (1,959)
 income/(loss)
 for the period
 Dividends paid           -        -           -   (7,411)  (7,411)         (69)  (7,480)
 Scrip dividends          9        -         (9)     2,717    2,717            -    2,717
 Shares issued          120        -      33,930         -   34,050            -   34,050
 for the
 acquisition of
 BG Group plc^3
 Repurchases of           -        -           -         -        -            -        -
 shares
 Share-based              -    (168)         266       133      231            -      231
 compensation^4
 Capital                  -        -           -       266      266          560      826
 contributions
 from, and other
 changes
 in,
 non-controlling
 interest
 At June 30,            675    (752)      13,283   177,464  190,670        1,836  192,506
 2016
 At January 1,          540  (1,190)    (14,365)   186,981  171,966          820  172,786
 2015
 Comprehensive            -        -       1,502     8,416    9,918          224   10,142
 income/(loss)
 for the period
 Dividends paid           -        -           -   (5,957)  (5,957)         (45)  (6,002)
 Scrip dividends          2        -         (2)       731      731            -      731
 Repurchases of         (1)        -           1         1        1            -        1
 shares
 Share-based              -      634           -        39      673            -      673
 compensation
 Capital                  -        -           -      (98)     (98)          222      124
 contributions
 from, and other
 changes
 in,
 non-controlling
 interest
 At June 30,            541    (556)    (13,285)   190,087  176,787        1,221  178,008
 2015
  1. See Note 5 “Share capital”
  2. See Note 6 “Other reserves”
  3. See Note 2 “Acquisition of BG Group plc”
  4. Includes a reclassification of $534 million between Shares held in trust and Other
     reserves, with no impact on total equity, in order to appropriately reflect the
     carrying amount of Shares held in trust at cost.

 

 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                        Quarters                             $ million                Half year
        Q2 2016       Q1 2016         Q2 2015                                       2016       2015
                                                     Cash flow from operating
                                                     activities
             1,280          455               4,114  Income/(loss) for the             1,735    8,651
                                                     period
                                                     Adjustment for:
               119          753               1,753  - Current tax                       872    4,700
               671          272                 395  - Interest expense (net)            943      698
             6,097        6,147               4,673  - Depreciation, depletion        12,244    9,277
                                                     and amortisation
             (535)        (175)               (247)  - Net (gains)/losses on           (710)  (1,859)
                                                     sale of non-current
                                                     assets and businesses^1
           (2,474)      (3,909)             (1,588)  - Decrease/(increase) in        (6,383)  (1,960)
                                                     working capital
             (946)        (789)             (1,136)  - Share of (profit)/loss        (1,735)  (2,541)
                                                     of joint ventures and
                                                     associates
               964          688               1,071  - Dividends received from         1,652    2,148
                                                     joint ventures and
                                                     associates
             (533)      (1,755)                (90)  - Deferred tax,                 (2,288)  (1,593)
                                                     retirement benefits,
                                                     decommissioning
                                                       and other provisions
             (346)        (292)                 255  - Other                           (638)      349
      4,297         1,395        9,200  Net cash from operating                 5,692        17,870
                                        activities (pre-tax)
    (2,005)         (734)      (3,150)  Tax paid                              (2,739)       (4,714)
      2,292           661        6,050  Net cash from operating                 2,953        13,156
                                        activities
                                        Cash flow from investing
                                        activities
    (5,796)       (5,324)      (6,205)  Capital expenditure                  (11,120)      (12,420)
          -      (11,421)            -  Acquisition of BG Group plc,         (11,421)             -
                                        net of cash and cash
                                        equivalents acquired^2
      (216)         (332)        (208)  Investments in joint ventures           (548)         (617)
                                        and associates
        516            46          206  Proceeds from sale of                     562         2,409
                                        property, plant and equipment
                                        and businesses
         23            16          165  Proceeds from sale of joint                39           169
                                        ventures and associates
         93           136           59  Interest received                         229           115
       (70)          (37)         (80)  Other                                   (107)         (159)
    (5,450)      (16,916)      (6,063)  Net cash used in investing           (22,366)      (10,503)
                                        activities
                                        Cash flow from financing
                                        activities
      1,870           873        1,072  Net increase/(decrease) in              2,743           817
                                        debt with maturity period
                                        within three months
                                        Other debt:
      9,472           264       10,045  - New borrowings                        9,736        10,797
      (972)       (1,969)      (2,188)  - Repayments                          (2,941)       (2,818)
      (725)         (534)        (317)  Interest paid                         (1,259)         (726)
        397           422          424  Change in non-controlling                 819           419
                                        interest
                                        Cash dividends paid to:
    (2,436)       (2,258)      (2,294)  - Royal Dutch Shell plc               (4,694)       (5,226)
                                        shareholders
       (34)          (35)         (27)  - Non-controlling interest               (69)          (45)
          -             -            -  Repurchases of shares                       -         (409)
          6           (4)          (5)  Shares held in trust: net                   2          (45)
                                        sales/(purchases) and
                                        dividends received
      7,578       (3,241)        6,710  Net cash from/(used in)                 4,337         2,764
                                        financing activities
      (217)       (1,237)          417  Currency translation                  (1,454)          (43)
                                        differences relating to cash
                                        and
                                        cash equivalents
      4,203      (20,733)        7,114  Increase/(decrease) in cash          (16,530)         5,374
                                        and cash equivalents
     11,019        31,752       19,867  Cash and cash equivalents at           31,752        21,607
                                        beginning of period
     15,222        11,019       26,981  Cash and cash equivalents at           15,222        26,981
                                        end of period
  1. Includes the increase to fair value in the carrying amount of Woodside in the second quarter
     2016 (see page12).
  2. See Note 2 “Acquisition of BG Group plc”

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1.    Basis of preparation

These unaudited Condensed Consolidated Interim Financial Statements (“Interim
Statements”) of Royal Dutch Shell plc (“the Company”) and its subsidiaries
(collectively referred to as “Shell”) have been prepared in accordance with
IAS 34 Interim Financial Reporting as issued by the International Accounting
Standards Board and as adopted by the European Union, and on the basis of the
same accounting principles as, and should be read in conjunction with, the
Annual Report and Form 20-F for the year ended December 31, 2015 (pages 120 to
125) as filed with the U.S. Securities and Exchange Commission. In addition to
those accounting policies, following the acquisition of BG Group plc, Shell
accounts for net investment hedges where the effective portion of gains and
losses arising on hedging instruments that are used to hedge net investments
in foreign operations are recognised in other comprehensive income until the
related investment is disposed of.

The Directors consider it appropriate to continue to adopt the going concern
basis of accounting in preparing these Interim Statements.

The financial information presented in the Interim Statements does not
constitute statutory accounts within the meaning of section 434(3) of the
Companies Act 2006 (“the Act”). Statutory accounts for the year ended December
31, 2015 were published in Shell’s Annual Report and a copy was delivered to
the Registrar of Companies in England and Wales. The auditors’ report on those
accounts was unqualified, did not include a reference to any matters to which
the auditors drew attention by way of emphasis without qualifying the report
and did not contain a statement under sections 498(2) or 498(3) of the Act.

2.    Acquisition of BG Group plc

On February 15, 2016, the Company acquired all the voting rights in BG by
means of a Scheme of Arrangement under Part 26 of the Act for a purchase
consideration of $54,034 million. This included cash of $19,036 million and
the fair value ($34,050 million) of 218.7 million A shares and 1,305.1 million
B shares issued in exchange for all BG shares. The fair value of the shares
issued was calculated using the market price of the Company’s A and B shares
of 1,545.0 and 1,538.5 pence respectively on the London Stock Exchange at its
opening of business on February 15, 2016.

BG’s activities mainly comprise exploration, development, production,
liquefaction and marketing of hydrocarbons, the development and use of LNG
import facilities, and the purchase, shipping and sale of LNG and regasified
natural gas. The acquisition is expected to accelerate Shell’s growth strategy
in global LNG and deep water. It is expected to add material proved oil and
gas reserves and production volumes, and provides Shell with enhanced
positions in competitive new oil and gas projects, particularly in Australia
LNG and Brazil deep water.

Goodwill of $9,024 million was recognised on the acquisition, being the excess
of the purchase consideration over the fair value of net assets acquired as
set out below. The net asset value, in line with accounting standards, is
determined by reference to oil and gas prices, as reflected in the prevailing
market view on the day of completion. Oil and gas prices are based on the
forward price curve for the first two years, and subsequent years based on the
market consensus price view.

The fair values of the net assets, and therefore the resultant goodwill, are
provisional.

 FAIR VALUE OF NET ASSETS ACQUIRED (PROVISIONAL)
                                       $ million
 Assets
 Non-current assets
 Intangible assets                         6,178
 Property, plant and equipment            58,444
 Joint ventures and associates             4,702
 Deferred tax                              2,432
 Other                                     2,181
                                          73,937
 Current assets
 Inventories                                 417
 Trade and other receivables               4,202
 Cash and cash equivalents                 6,803
                                          11,422
 Total assets                             85,359
 Liabilities
 Non-current liabilities
 Debt                                     18,949
 Deferred tax                              8,393
 Decommissioning and other provisions      6,401
 Other                                       665
                                          34,408
 Current liabilities
 Debt                                      1,345
 Trade and other payables                  3,926
 Other                                       670
                                           5,941
 Total liabilities                        40,349
 Total                                    45,010

Acquisition costs of $391 million were recognised in the Consolidated
Statement of Income in production and manufacturing and selling, distribution
and administrative expenses ($47 million in 2015 and $344 million in the first
quarter 2016).

The acquired activities of BG are now significantly integrated with those of
other Shell entities and therefore it is impracticable to identify separately
either the amounts of revenue and income since the date of acquisition that BG
has contributed to the Consolidated Statement of Comprehensive Income, or the
revenue and income of Shell for the half year 2016 as though the acquisition
date of BG had been as at January 1, 2016.

3.    Segment information

Segmental reporting has been changed with effect from 2016, in line with a
change in the way Shell’s businesses are managed. Shell now reports its
business through the segments Integrated Gas (previously part of Upstream),
Upstream, Downstream and Corporate. Comparative information has been
reclassified.

Integrated Gas is engaged in the liquefaction and transportation of gas, and
the conversion of natural gas to liquids to provide fuels and other products,
as well as projects with an integrated activity from producing to
commercialising gas. Upstream combines the operating segments Upstream, which
is engaged in the exploration for and extraction of crude oil, natural gas and
natural gas liquids, the transportation of oil and wind energy, and Oil Sands,
which is engaged in the extraction of bitumen from oil sands that is converted
into synthetic crude oil. These operating segments have similar economic
characteristics because their earnings are significantly dependent on crude
oil and natural gas prices and production volumes, and because their projects
generally require significant investment, are complex and generate revenues
for many years.

Segment earnings are presented on a current cost of supplies basis (CCS
earnings), which is the earnings measure used by the Chief Executive Officer
for the purposes of making decisions about allocating resources and assessing
performance. On this basis, the purchase price of volumes sold during the
period is based on the current cost of supplies during the same period after
making allowance for the tax effect. CCS earnings therefore exclude the effect
of changes in the oil price on inventory carrying amounts. Sales between
segments are based on prices generally equivalent to commercially available
prices.

 INFORMATION BY SEGMENT
                Quarters                    $ million          Half year
  Q2 2016    Q1 2016    Q2 2015                             2016      2015
                                  Third-party revenue
     5,373      5,679      4,807  Integrated Gas            11,052    10,756
     1,711      1,922      1,489  Upstream                   3,633     3,306
    51,315     40,929     66,082  Downstream                92,244   123,998
        16         24         24  Corporate                     40        48
    58,415     48,554     72,402  Total third-party        106,969   138,108
                                  revenue
                                  Inter-segment revenue
       896        743      1,167  Integrated Gas^1           1,639     2,144
     6,049      5,037      7,507  Upstream^1                11,086    14,301
     1,993      1,455        271  Downstream                 3,448       633
         -          -          -  Corporate                      -         -
                                  CCS earnings
       982        905      1,335  Integrated Gas             1,887     2,474
   (1,974)    (1,350)      (561)  Upstream                 (3,324)       839
     1,717      1,700      2,746  Downstream                 3,417     5,260
     (423)      (456)       (68)  Corporate                  (879)     (239)
       302        799      3,452  Total CCS earnings^2       1,101     8,334
  1. Inter-segment revenue for the first quarter 2016 has been amended for
     Integrated Gas and Upstream to include revenue previously accounted for
     as intra-segment revenue.
  2. See pages 5 and 27 for a summary of significant items, including
     redundancy and restructuring charges, impacting segment earnings.
 RECONCILIATION OF CCS EARNINGS TO INCOME FOR THE PERIOD
                Quarters                    $ million          Half year
  Q2 2016    Q1 2016    Q2 2015                             2016      2015
       302        799      3,452  Total CCS earnings         1,101     8,334
                                  Current cost of
                                  supplies adjustment:
     1,158      (398)        765  Purchases                    760       413
     (323)        120      (219)  Taxation                   (203)     (117)
       143       (66)        116  Share of profit/(loss)        77        21
                                  of joint ventures and
                                  associates
     1,280        455      4,114  Income/(loss) for the      1,735     8,651
                                  period

4.    Earnings per share

 EARNINGS PER SHARE
                  Quarters                                      Half year
 Q2 2016  Q1 2016  Q2 2015                                    2016     2015
   1,175      484    3,986  Income attributable to Royal       1,659    8,416
                            Dutch Shell plc shareholders ($
                            million)
                            Weighted average number of
                            shares as the basis for:
 8,000.0  7,173.4  6,304.6  Basic earnings per share         7,586.7  6,298.4
                            (million)
 8,053.3  7,230.4  6,383.9  Diluted earnings per share       7,641.8  6,380.5
                            (million)
  

5.    Share capital

 ISSUED AND FULLY PAID
                              Ordinary shares of€0.07 each  Sterling deferred
                                                                 shares
      Number of shares              A              B           of £1 each
 At January 1, 2016           3,990,921,569  2,440,410,614             50,000
 Scrip dividends                116,249,778              -                  -
 Shares issued for the          218,728,308  1,305,076,117                  -
 acquisition of BG Group
 plc^1
 Repurchases of shares                    -              -                  -
 At June 30, 2016             4,325,899,655  3,745,486,731             50,000
 At January 1, 2015           3,907,302,393  2,440,410,614             50,000
 Scrip dividends                 23,430,143              -                  -
 Repurchases of shares         (12,717,512)              -                  -
 At June 30, 2015             3,918,015,024  2,440,410,614             50,000
  1. See Note 2 “Acquisition of BG Group plc”
 NOMINAL VALUE
                                       Ordinary shares of€0.07 each
          $ million                 A              B              Total
 At January 1, 2016                     340            206                546
 Scrip dividends                          9              -                  9
 Shares issued for the                   17            103                120
 acquisition of BG Group
 plc^1
 Repurchases of shares                    -              -                  -
 At June 30, 2016                       366            309                675
 At January 1, 2015                     334            206                540
 Scrip dividends                          2              -                  2
 Repurchases of shares                  (1)              -                (1)
 At June 30, 2015                       335            206                541
  1. See Note 2 “Acquisition of BG Group plc”

The total nominal value of sterling deferred shares is less than $1 million.

At Royal Dutch Shell plc’s Annual General Meeting on May 24, 2016, the Board
was authorised to allot ordinary shares in Royal Dutch Shell plc, and to grant
rights to subscribe for or to convert any security into ordinary shares in
Royal Dutch Shell plc, up to an aggregate nominal amount of €185 million
(representing 2,643 million ordinary shares of €0.07 each), and to list such
shares or rights on any stock exchange. This authority expires at the earlier
of the close of business on August 24, 2017, and the end of the Annual General
Meeting to be held in 2017, unless previously renewed, revoked or varied by
Royal Dutch Shell plc in a general meeting.

6.    Other reserves

 OTHER RESERVES
   $ million    Merger    Share    Capital     Share    Accumulated    Total
                reserve  premium  redemption   plan        other
                         reserve   reserve    reserve  comprehensive
                                                          income
 At January 1,    3,398      154          84    1,658       (22,480)  (17,186)
 2016
 Other                -        -           -        -        (3,718)   (3,718)
 comprehensive
 income/(loss)
 attributable
 to Royal
 Dutch Shell
 plc
 shareholders
 Scrip              (9)        -           -        -              -       (9)
 dividends
 Shares issued   33,930        -           -        -              -    33,930
 for the
 acquisition
 of BG Group
 plc^1
 Repurchases          -        -           -        -              -         -
 of shares
 Share-based          -        -           -    (268)            534       266
 compensation
 At June 30,     37,319      154          84    1,390       (25,664)    13,283
 2016
 At January 1,    3,405      154          83    1,723       (19,730)  (14,365)
 2015
 Other                -        -           -        -          1,502     1,502
 comprehensive
 income/(loss)
 attributable
 to Royal
 Dutch Shell
 plc
 shareholders
 Scrip              (2)        -           -        -              -       (2)
 dividends
 Repurchases          -        -           1        -              -         1
 of shares
 Share-based          -        -           -    (421)              -     (421)
 compensation
 At June 30,      3,403      154          84    1,302       (18,228)  (13,285)
 2015
  1. See Note 2 “Acquisition of BG Group plc”

The merger reserve and share premium reserve were established as a consequence
of Royal Dutch Shell plc becoming the single parent company of Royal Dutch
Petroleum Company and The “Shell” Transport and Trading Company, p.l.c., now
The Shell Transport and Trading Company Limited, in 2005. The increase in the
merger reserve in the first half year 2016 in respect of the shares issued for
the acquisition of BG represents the difference between the fair value and the
nominal value of the shares. The capital redemption reserve was established in
connection with repurchases of shares of Royal Dutch Shell plc. The share plan
reserve is in respect of equity-settled share-based compensation plans.

7.    Derivative contracts

The table below provides the carrying amounts of derivatives contracts held,
disclosed in accordance with
IFRS 13 Fair Value Measurement.

 DERIVATIVE CONTRACTS
          $ million             Jun 30, 2016    Mar 31, 2016   Dec 31, 2015
 Included within:
 Trade and other receivables            1,143           1,250            744
 – non-current
 Trade and other receivables            9,188          12,297         13,114
 – current^1
 Trade and other payables –             1,742           1,369          1,687
 non-current
 Trade and other payables –             9,493          11,026         10,757
 current^1
  1. The amounts at March 31, 2016 have been reduced by $4,963 million in
     order to appropriately reflect certain contracts on a net basis which
     were previously presented gross.

As disclosed in the Consolidated Financial Statements for the year ended
December 31, 2015, presented in the Annual Report and Form 20-F for that year,
Shell is exposed to the risks of changes in fair value of its financial assets
and liabilities. The fair values of the financial assets and liabilities are
defined as the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date. Methods and assumptions used to estimate the fair values
at June 30, 2016 are consistent with those used in the year ended December 31,
2015, and the carrying amounts of derivative contracts measured using
predominantly unobservable inputs have not changed materially since that date.

The fair value of debt excluding finance lease liabilities at June 30, 2016
was $83,367 million (March 31, 2016: $71,903 million; December 31, 2015:
$53,480 million). Fair value is determined from the prices quoted for those
securities.
 

DEFINITIONS

A.    Earnings on a current cost of supplies basis attributable to
shareholders

Segment earnings are presented on a current cost of supplies basis (CCS
earnings), which is the earnings measure used by the Chief Executive Officer
for the purposes of making decisions about allocating resources and assessing
performance. On this basis, the purchase price of volumes sold during the
period is based on the current cost of supplies during the same period after
making allowance for the tax effect. CCS earnings therefore exclude the effect
of changes in the oil price on inventory carrying amounts. The current cost of
supplies adjustment does not impact net cash from operating activities in the
Condensed Consolidated Statement of Cash Flows. The reconciliation of CCS
earning to net income is as follows.

             Quarters                  $ million             Half year
 Q2 2016  Q1 2016  Q2 2015                                2016       2015
     302      799    3,452  Earnings on a current cost of        1,101  8,334
                            supplies basis (CCS earnings)
    (63)       15     (91)  Attributable to non-controlling       (48)  (212)
                            interest
     239      814    3,361  Earnings on a current cost of        1,053  8,122
                            supplies basis attributable to
                            Royal Dutch Shell plc
                            shareholders
     978    (344)      662  Current cost of supplies               634    317
                            adjustment
    (42)       14     (37)  Non-controlling interest              (28)   (23)
   1,175      484    3,986  Income attributable to Royal         1,659  8,416
                            Dutch Shell plc shareholders
     105     (29)      128  Non-controlling interest                76    235
   1,280      455    4,114  Income for the period                1,735  8,651

B.    Identified items

Identified items are shown to provide additional insight into segment earnings
and income attributable to shareholders. They include the full impact on
Shell’s CCS earnings of the following items: Divestment gains and losses,
impairments, fair value accounting of commodity derivatives and certain gas
contracts (see below), and redundancy and restructuring. Further items may be
identified in addition to the above.

Impacts of accounting for derivatives

In the ordinary course of business Shell enters into contracts to supply or
purchase oil and gas products as well as power and environmental products.
Derivative contracts are entered into for mitigation of resulting economic
exposures (generally price exposure) and these derivative contracts are
carried at period-end market price (fair value), with movements in fair value
recognised in income for the period. Supply and purchase contracts entered
into for operational purposes are, by contrast, recognised when the
transaction occurs (see also below); furthermore, inventory is carried at
historical cost or net realisable value, whichever is lower.

As a consequence, accounting mismatches occur because: (a) the supply or
purchase transaction is recognised in a different period; or (b) the inventory
is measured on a different basis.

In addition, certain UK gas contracts held by Upstream are, due to pricing or
delivery conditions, deemed to contain embedded derivatives or written options
and are also required to be carried at fair value even though they are entered
into for operational purposes.

The accounting impacts of the aforementioned are reported as identified items
in this Report.

Impacts of exchange rate movements on deferred tax balances

With effect from 2016, identified items include the impact on deferred tax
balances of exchange rate movements arising on:

The conversion to dollars of the local currency tax base of non-monetary
assets and liabilities, as well as losses. This primarily impacts the
Integrated Gas and Upstream segments.

The conversion of dollar-denominated inter-segment loans to local currency.
This primarily impacts the Corporate segment.

The comparative information presented in this Report has been restated for
this definition change. The following table sets out the impact of the
definition change on the identified items for the year 2015.

 RESTATED IDENTIFIED ITEMS BY SEGMENT
                $ million                              Quarters
                                          Q1 2015  Q2 2015  Q3 2015  Q4 2015
 Identified items as previously reported
 Integrated Gas                                15    (117)    (878)    (347)
 Upstream                                   1,849    (146)  (7,340)    (479)
 Downstream                                 (132)    (215)    (136)      978
 Corporate and Non-controlling interest     (217)        4      464    (137)
 Impact of definition change
 Integrated Gas                             (367)       50    (469)      227
 Upstream                                   (254)       53    (292)       30
 Downstream                                     -        -        -        -
 Corporate and Non-controlling interest       129     (28)      155      (4)
 Identified items as restated
 Integrated Gas                             (352)     (67)  (1,347)    (120)
 Upstream                                   1,595     (93)  (7,632)    (449)
 Downstream                                 (132)    (215)    (136)      978
 Corporate and Non-controlling interest      (88)     (24)      619    (141)

C.    Capital investment

Capital investment is a measure used to make decisions about allocating
resources and assessing performance. It is defined as the sum of capital
expenditure, acquisition of BG, exploration expense (excluding well
write-offs), new investments in joint ventures and associates, new finance
leases and other adjustments. The reconciliation of Capital expenditure to
Capital investment is as follows.

               Quarters                     $ million           Half year
 Q2 2016  Q1 2016   Q2 2015                                   2016     2015
                             Capital investment:
   1,153    22,824    1,313  Integrated Gas                   23,977    2,614
   3,700    35,038    4,603  Upstream                         38,738    9,245
   1,389     1,092    1,085  Downstream                        2,481    1,934
      42        21       49  Corporate                            63       99
   6,284    58,975    7,050  Total                            65,259   13,892
       -  (52,904)        -  Capital investment related to  (52,904)        -
                             the acquisition of BG Group
                             plc
   (216)     (332)    (208)  Investments in joint ventures     (548)    (617)
                             and associates
   (336)     (224)    (643)  Exploration expense,              (560)  (1,145)
                             excluding exploration wells
                             written off
       9     (414)     (18)  Finance leases                    (405)     (24)
      55       223       24  Other                               278      314
   5,796     5,324    6,205  Capital expenditure              11,120   12,420

D.    Divestments

“Divestments” is a measure used to monitor the progress of Shell’s divestment
programme. This measure comprises proceeds from sale of property, plant and
equipment and businesses, joint ventures and associates, and other Integrated
Gas, Upstream and Downstream investments, adjusted onto an accruals basis, and
proceeds from sale of interests in an entity while retaining control (for
example, proceeds from sale of interest in Shell Midstream Partners, L.P.).

                 Quarters                       $ million        Half year
  Q2 2016    Q1 2016    Q2 2015                                 2016    2015
       516         46        206  Proceeds from sale of           562   2,409
                                  property, plant and
                                  equipment and businesses
        23         16        165  Proceeds from sale of joint      39     169
                                  ventures and associates
      (70)       (37)       (80)  Other (in Cash flow from      (107)   (159)
                                  investing activities)
       398        421        298  Proceeds from sale of           819     298
                                  interests in Shell
                                  Midstream Partners, L.P.
       135         39         93  Other^1                         174     129
     1,002        485        682  Total                         1,487   2,846
  1. Mainly changes in non-current receivables included within Other (in Cash
     flow from investing activities), which are not considered to be
     divestments.

E.     Return on average capital employed

Return on average capital employed (ROACE) measures the efficiency of Shell’s
utilisation of the capital that it employs and is a common measure of business
performance. In this calculation, ROACE is defined as the sum of income for
the current and previous three quarters, adjusted for after-tax interest
expense, as a percentage of the average capital employed for the same period.
Capital employed consists of total equity, current debt and non-current debt.

                   $ million                     Jun 30, 2016  Jun 30, 2015
 Income for current and previous three quarters       (4,716)        13,494
 Interest expense after tax                             1,139         1,033
 Income before interest expense                       (3,576)        14,527
 Capital employed – opening                           230,949       230,235
 Capital employed – closing                           282,835       230,949
 Capital employed – average                           256,892       230,592
 ROACE                                                  -1.4%          6.3%

Return on average capital employed on a CCS basis excluding identified items
is defined as the sum of CCS earnings attributable to shareholders excluding
identified items for the current and previous three quarters, as a percentage
of the average capital employed for the same period.

                    $ million                      Jun 30, 2016  Jun 30, 2015
 CCS earnings excluding identified items for              6,546        17,474
 current and previous three quarters
 Capital employed – opening                             230,949       230,235
 Capital employed – closing                             282,835       230,949
 Capital employed – average                             256,892       230,592
 ROACE on a CCS basis excluding identified items           2.5%          7.6%

F.     Gearing

Gearing, calculated as net debt (total debt less cash and cash equivalents) as
a percentage of total capital (net debt plus total equity), is a key measure
of Shell’s capital structure.

      $ million        Jun 30, 2016  Mar 31, 2016  Dec 31, 2015  Jun 30, 2015
 Current debt                10,863         7,868         5,530         7,366
 Non-current debt            79,466        73,005        52,849        45,575
 Less: Cash and cash       (15,222)      (11,019)      (31,752)      (26,981)
 equivalents
 Net debt                    75,107        69,854        26,624        25,960
 Add: Total equity          192,506       198,014       164,121       178,008
 Total capital              267,613       267,868       190,748       203,968
 Gearing                      28.1%         26.1%         14.0%         12.7%

G.   Operating expenses

Operating expenses comprise production and manufacturing expenses; selling,
distribution and administrative expenses; and research and development
expenses.

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks and uncertainties affecting Shell are described in the
Risk Factors section of the Annual Report and Form 20-F for the year ended
December 31, 2015 (pages 8 to 12) and are summarised below. There are no
material changes in those Risk Factors for the remaining 6 months of the
financial year.

  o We are exposed to fluctuating prices of crude oil, natural gas, oil
    products and chemicals.
  o Our ability to deliver competitive returns and pursue commercial
    opportunities depends in part on the robustness and, ultimately, the
    accuracy of our price assumptions.
  o Our ability to achieve strategic objectives depends on how we react to
    competitive forces.
  o The acquisition of BG Group plc exposes us to integration risks and other
    challenges.
  o Following the acquisition of BG, we seek to execute divestments in the
    pursuit of our strategy. We may not be able to successfully divest these
    assets in line with our strategy.
  o 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.
  o 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.
  o We operate in more than 70 countries that have differing degrees of
    political, legal and fiscal stability. This exposes us to a wide range of
    political developments that could result in changes to contractual terms,
    laws and regulations. For example, the outcome of the United Kingdom’s
    (UK) recent referendum to leave the European Union (EU) could have a
    material effect on us depending on the impact of future changes in UK and
    EU laws and regulations. In addition, we and our joint arrangements and
    associates face the risk of litigation worldwide.
  o Our operations expose us to social instability, civil unrest, terrorism,
    piracy, acts of war and risks of pandemic diseases that could have a
    material adverse effect on our business.
  o A further erosion of the business and operating environment in Nigeria
    could have a material adverse effect on us.
  o Rising climate change concerns have led and could lead to additional legal
    and/or regulatory measures which could result in project delays or
    cancellations, a decrease in demand for fossil fuels and additional
    compliance obligations, and therefore could adversely impact our costs
    and/or revenue.
  o The nature of our operations exposes us, and the communities in which we
    work, to a wide range of health, safety, security and environment risks.
  o The operation of the Groningen asset in the Netherlands continues to
    expose communities to earth tremor risks.
  o Our future performance depends on the successful development and
    deployment of new technologies and new products.
  o We are exposed to treasury and trading risks, including liquidity risk,
    interest rate risk, foreign exchange risk, commodity price risk and credit
    risk. We are affected by the global macroeconomic environment as well as
    financial and commodity market conditions.
  o We have substantial pension commitments, whose funding is subject to
    capital market risks.
  o We mainly self-insure our risk exposure. We could incur significant losses
    from different types of risks that are not covered by insurance from
    third-party insurers.
  o An erosion of our business reputation could have a material adverse effect
    on our brand, our ability to secure new resources and our licence to
    operate.
  o Many of our major projects and operations are conducted in joint
    arrangements or associates. This could reduce our degree of control, as
    well as our ability to identify and manage risks.
  o We rely heavily on information technology systems for our operations.
  o Violations of antitrust and competition laws carry fines and expose us
    and/or our employees to criminal sanctions and civil suits.
  o Violations of anti-bribery and corruption laws and anti-money laundering
    laws carry fines and expose us and/or our employees to criminal sanctions
    and civil suits.
  o Violations of data protection laws carry fines and expose us and/or our
    employees to criminal sanctions and civil suits.
  o Violations of trade controls, including sanctions, carry fines and expose
    us and our employees to criminal sanctions and civil suits.
  o The Company’s Articles of Association determine the jurisdiction for
    shareholder disputes. This could limit shareholder remedies.

FIRST QUARTER 2016 PORTFOLIO DEVELOPMENTS

During the quarter, Shell completed the acquisition of BG for a purchase
consideration of $54,034 million. This includes cash of $19,036 million, and
the fair value ($34,050 million) of 1,523.8 million shares issued in exchange
for all BG shares. Following completion of the acquisition on February 15,
2016, BG was consolidated within Shell’s results. For practical purposes, this
includes February and March 2016, as the impact for the first half of February
is deemed immaterial.

The consolidation of BG resulted in an increase to first quarter 2016 cash
flow from operating activities of $0.8 billion and an increase to CCS earnings
attributable to shareholders excluding identified items of $0.2 billion.

Goodwill of $9,024 million was recognised on the acquisition, being the excess
of the purchase consideration over the fair value of net assets acquired (see
Note 2).

Shell completed the United Kingdom office footprint review announced during
the final stages of the BG combination. The outcomes of the review are subject
to appropriate engagement with employees and employee representatives. The
review recommended a consolidation of all Shell’s London and South East based
operations into Central London with the intention to close the Thames Valley
Park office in Reading by the end of 2016. The review also recommended that
all Aberdeen-based onshore operations move to the Shell Aberdeen Tullos
office, with BG’s offices at Albyn Place closing by 2016 and the closure of
Shell’s Brabazon House office in Manchester by the end of 2017. 

Integrated Gas

During the quarter, first LNG production was achieved at the non-operated
Gorgon project (Shell interest 25%) on Barrow Island, offshore Australia.
Subsequent to first LNG cargo delivery, LNG production was temporarily halted
due to mechanical issues with the propane refrigerant compressor on Train 1.

In Australia, the Browse Joint Venture participants (Shell interest 27%)
decided not to progress with the development concept being studied for the
resource as it did not meet commercial requirements for a positive final
investment decision (“FID”), considering the current economic and market
environment.

In Indonesia, INPEX as operator of the Abadi field (Shell interest 35%)
received a notification from the Indonesian government authorities instructing
to re-propose a plan of development based on onshore LNG for the Abadi LNG
project. Shell and INPEX remain committed to work together with the Government
of Indonesia to ensure that the Abadi project moves forward to optimally
develop the Abadi gas reserves in a manner that benefits all.

Upstream

In Brazil, Shell announced the start of oil production from the third phase of
the deep-water Parque das Conchas BC-10 development (Shell interest 50%) in
the Campos basin.

Also in Brazil, the seventh non-operated FPSO, Cidade de Maricá, (Shell
interest 25%) reached first oil in the BM-S-11 block of the Santos Basin,
offshore Brazil. The FPSO has a production capacity of 150 thousand barrels
per day.

Shell announced that it has decided to exit the joint development of the Bab
sour gas reservoirs (Shell interest 40%) with ADNOC in the emirate of Abu
Dhabi, United Arab Emirates, and to stop further joint work on the project.
This reflects the economic climate prevailing in the energy industry.

In the United Kingdom, Shell has agreed to sell its 7.59% interest in the
Maclure oil and gas field in the North Sea for a purchase consideration of
some $24 million. Completion is subject to necessary approvals. 

Shell had continued success in its exploration programme with 10 discoveries
and appraisals in Brunei, Egypt, Malaysia, Nigeria, Oman, and the United
States. This included a notable oil discovery in the United States with the
non-operated Kepler North well (Shell interest 50%) in the Gulf of Mexico, and
a notable gas discovery with the non-operated Jerun-1 well (Shell interest
30%) in Malaysia.

Upstream divestments totalled some $38 million for the first quarter 2016 and
reflected, among others, the first tranche of the sale proceeds of the
Anasuria development in the North Sea.

Downstream

During the quarter, Shell announced a conditional agreement for the sale of
its 51% shareholding in the Shell Refining Company in Malaysia for $66
million. The transaction is expected to complete in 2016, subject to
regulatory approval.

In the United States, Shell announced that it has signed a non-binding Letter
of Intent to divide the assets of Motiva Enterprises LLC. The Motiva joint
venture was formed in 1998 and has operated as a 50/50 refining and marketing
joint venture between Saudi Arabian Oil Company and Shell since 2002. In the
proposed division of assets, Shell will assume sole ownership of the Norco,
Louisiana refinery (where Shell operates a chemicals plant), the Convent,
Louisiana refinery, nine distribution terminals, and Shell branded markets in
Florida, Louisiana, and the Northeastern region. Saudi Refining Inc. will
retain the Motiva name, assume sole ownership of the Port Arthur refinery in
Texas, retain 26 distribution terminals, and have an exclusive licence to use
the Shell brand for gasoline and diesel sales in Texas, and in the majority of
the Mississippi Valley, the Southeast and Mid-Atlantic markets.

Also in the United States, Shell completed the sale of an additional 4.66%
interest in Shell Midstream Partners, L.P. to public investors via the
issuance of an additional 13,400,000 LP units for net proceeds of $421
million.

Shell announced FID on a project to expand China National Offshore Oil
Corporation (“CNOOC”) and Shell Petrochemical Company’s (“CSPC”) existing
50/50 joint venture in Huizhou, Guangdong Province, China. Subject to
regulatory approvals, Shell and CNOOC have agreed that CSPC will take over
CNOOC’s ongoing project to build additional chemical facilities next to CSPC’s
petrochemical complex. The project includes the ongoing construction of a new
ethylene cracker and ethylene derivatives units, which will increase ethylene
capacity by more than 1 million tonnes per year, about double the current
capacity. It will also include a styrene monomer and propylene oxide plant.

In May, Shell announced that it completed the sale of Dansk Fuels in Denmark
for a consideration of $0.3 billion. Dansk Fuels comprises retail, commercial
fuels, commercial fleet and aviation businesses, and products trading and
supply activities associated with those businesses. 

FIRST QUARTER SUMMARY OF IDENTIFIED ITEMS

With effect from 2016, identified items include the impact of exchange rate
movements on certain deferred tax balances, as set out in Definition A. The
comparative information in this Report has been restated following this
change.

CCS earnings attributable to shareholders for the first quarter 2016 reflected
the following items, which in aggregate amounted to a net charge of $739
million (compared with a net gain of $1,023 million for the first quarter
2015), as summarised below:

  o Integrated Gas earnings included a net charge of $89 million, primarily
    reflecting a gain of some $400 million related to the impact of the
    strengthening Australian dollar on a deferred tax position, offset by a
    net charge on fair value accounting of certain commodity derivatives and
    gas contracts of some $170 million, asset impairments of some $130
    million, and other items including a litigation provision. Integrated Gas
    earnings for the first quarter 2015 included a net charge of $352 million.
  o Upstream earnings included a net gain of $87 million, primarily reflecting
    a gain of some $360 million related to the impact of the strengthening
    Brazilian real on a deferred tax position, partly offset by asset
    impairments of some $300 million. Upstream earnings for the first quarter
    2015 included a net gain of $1,595 million.
  o Downstream earnings included a net charge of $310 million, primarily
    reflecting the net impact of fair value accounting of commodity
    derivatives of some $240 million and impairments of some $190 million,
    partly offset by gains on divestments of some $130 million. Downstream
    earnings for the first quarter 2015 included a net charge of $132 million.
  o Corporate results and Non-controlling interest included a net charge of
    $427 million, mainly reflecting a charge of $266 million related to the
    payment of stamp duty in the United Kingdom for the acquisition of BG, and
    a charge of some $190 million related to the impact of the strengthening
    Brazilian real on deferred tax positions related to financing of the
    Upstream business, partly offset by $100 million for the non-controlling
    interest share of an impairment of a Downstream asset. Earnings for the
    first quarter 2015 included a net charge of $88 million.

RESPONSIBILITY STATEMENT

It is confirmed that to the best of our knowledge: (a) the Condensed
Consolidated Interim Financial Statements have been prepared in accordance
with IAS 34 Interim Financial Reporting as adopted by the European Union; (b)
the interim management report includes a fair review of the information
required by Disclosure Guidance and Transparency Rule (DTR) 4.2.7R (indication
of important events during the first six months of the financial year, and
their impact on the Condensed Consolidated Interim Financial Statements, and
description of principal risks and uncertainties for the remaining six months
of the financial year); and (c) the interim management report includes a fair
review of the information required by DTR 4.2.8R (disclosure of related
parties transactions and changes thereto).

The Directors of Royal Dutch Shell plc are shown on pages 62-64 in the Annual
Report and Form 20-F for the year ended December 31, 2015.

On behalf of the Board

Ben van Beurden                                                    Simon Henry

Chief Executive Officer                                          Chief
Financial Officer

July 28, 2016                                                        July 28,
2016

INDEPENDENT REVIEW REPORT TO ROYAL DUTCH SHELL PLC

Introduction

We have been engaged by Royal Dutch Shell plc to review the Condensed
Consolidated Interim Financial Statements in the half-yearly financial report
for the six months ended June 30, 2016, which comprise the Consolidated
Statement of Income, the Consolidated Statement of Comprehensive Income, the
Condensed Consolidated Balance Sheet, the Consolidated Statement of Changes in
Equity, the Condensed Consolidated Statement of Cash Flows and Notes 1 to 7.
We have read the other information contained in the half-yearly financial
report and considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set of
financial statements.

This report is made solely to Royal Dutch Shell plc in accordance with
guidance contained in the International Standard on Review Engagements 2410
(UK and Ireland) “Review of Interim Financial Information Performed by the
Independent Auditor of the Entity” issued by the Auditing Practices Board. To
the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than Royal Dutch Shell plc, for our work, for this report, or
for the conclusions we have formed.

Directors’ responsibilities

The half-yearly financial report is the responsibility of, and has been
approved by, the Directors. The Directors are responsible for preparing the
half-yearly financial report in accordance with the Disclosure Guidance and
Transparency Rules of the United Kingdom’s Financial Conduct Authority.

The annual Consolidated Financial Statements of Royal Dutch Shell plc and its
subsidiaries are prepared in accordance with International Financial Reporting
Standards as issued by the International Accounting Standards Board (IASB) and
as adopted by the European Union (EU). The condensed set of financial
statements included in the half-yearly financial report has been prepared in
accordance with International Accounting Standard 34 Interim Financial
Reporting, as issued by the IASB and as adopted by the EU.

Our responsibility

Our responsibility is to express to Royal Dutch Shell plc a conclusion on the
Condensed Consolidated Interim Financial Statements in the half-yearly
financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review
Engagements 2410 (UK and Ireland), “Review of Interim Financial Information
Performed by the Independent Auditor of the Entity” issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of 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 to
believe that the Condensed Consolidated Interim Financial Statements in the
half-yearly financial report for the six months ended June 30, 2016 are not
prepared, in all material respects, in accordance with International
Accounting Standard 34 as issued by the IASB and as adopted by the EU and the
Disclosure Guidance and Transparency Rules of the United Kingdom’s Financial
Conduct Authority.

Ernst & Young LLP

London

July 28, 2016

The maintenance and integrity of the Royal Dutch Shell plc website
(www.shell.com) are the responsibility of the directors; the work carried out
by the auditors does not involve consideration of these matters and,
accordingly, the auditors accept no responsibility for any changes that may
have occurred to the Condensed Consolidated Interim Financial Statements since
they were initially presented on the website.

Legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.

CAUTIONARY STATEMENT

All amounts shown throughout this announcement are unaudited. All peak
production figures in Portfolio Developments are quoted at 100% expected
production.

The companies in which Royal Dutch Shell plc directly and indirectly owns
investments are separate legal 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 over which Royal
Dutch Shell plc either directly or indirectly has control. Entities and
unincorporated arrangements over which Shell has joint control are generally
referred to as “joint ventures” and “joint operations” respectively. Entities
over which Shell has significant influence but neither control nor joint
control are referred to as “associates”. The term “Shell interest” is used for
convenience to indicate the direct and/or indirect 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 Royal Dutch Shell. 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 Royal
Dutch Shell 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’’, “schedule”, ‘‘seek’’,
‘‘should’’, ‘‘target’’, ‘‘will’’ and similar terms and phrases. There are a
number of factors that could affect the future operations of Royal Dutch Shell
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. There can be no assurance
that future dividend payments will match or exceed previous dividend payments.
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 risk factors that may affect future results are
contained in Royal Dutch Shell’s Form 20-F for the year ended December 31,
2015 (available at www.shell.com/investor and www.sec.gov). These risk factors
also expressly qualify all forward-looking statements contained in this
announcement and should be considered by the reader. Each forward-looking
statement speaks only as of the date of this announcement, July 28, 2016.
Neither Royal Dutch Shell plc nor any of its subsidiaries 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.

This Report contains references to Shell’s website. These references are for
the readers’ convenience only. Shell is not incorporating by reference any
information posted on www.shell.com

We may have used certain terms, such as resources, in this announcement that
the United States Securities and Exchange Commission (SEC) strictly prohibits
us from including in our filings with the SEC. U.S. investors are urged to
consider closely the disclosure in our Form 20-F, File No 1-32575, available
on the SEC website www.sec.gov. You can also obtain this form from the SEC by
calling 1-800-SEC-0330.

This announcement contains inside information.

July 28, 2016

The information in this Report reflects the unaudited consolidated financial
position and results of Royal Dutch Shell plc. The information in this Report
also represents Royal Dutch Shell plc’s half-yearly financial report for the
purposes of the Disclosure Guidance and Transparency Rules of the UK Financial
Conduct Authority. As such: (1) the interim management report can be found on
pages 2 to 10 and 21 to 27; (2) the condensed set of financial statements on
pages 11 to 20; and (3) the directors’ responsibility statement on page 28 and
the auditors’ independent review on page 29. Company No. 4366849, Registered
Office: Shell Centre, London, SE1 7NA, England, UK.

Contacts:

- Michiel Brandjes, Company Secretary

- Investor Relations: International + 31 (0) 70 377 4540; North America +1 832
337 2034

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