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Royal Dutch Shell On Track To Deliver Strategic Targets By 2012

MARCH 15, 2011

LONDON (Dow Jones)–Oil giant Royal Dutch Shell PLC (RDSA) said Tuesday it is on track to deliver its strategic targets by 2012, namely for a 50-80% increase in cashflow from operations 2009-2012, in $60-$80 oil price and improved Downstream and natural gas environment.


-For the next wave of growth, to 2020 Shell has have over 30 new projects on the drawing board which will generate new options for the medium term, for the integrated energy company of the future.

-Shell continues to sell non-core positions to enhance capital efficiency, and as part of funding for future investment; asset sales proceeds have exceeded $30 billion in the last five years, and are expected to be up to $5 billion in 2011.

-Targets a further $1 billion Downstream cost reduction for 2011-12.

-Shelll has 20 new upstream projects under construction, which will add over 800,000 barrels of oil equivalent per day, or boe/d, driving the target for 3.5 million boe/d of production for 2012, a 6% increase compared to 2010.

-Sets new target for 3.7 million boe/d of upstream production for 2014, an increase of some 12% from 2010 levels.

-Shell believes that current upstream portfolio can support growth to 2020, with studies underway on over 10 billion boe of resources, an increase of 2 billion boe from 2009 levels.

-Shell is assessing over 30 new projects with production potential of over 1 million boe/d, and maturing further options, spanning activities in tight gas, deep water, LNG and traditional resources, in a world-wide, and industry-leading portfolio.

-Shell expects over $100 billion of net capital investment for 2011-14, some $25 billion-$27 billion per year, in line with previous guidance, to underpin the Upstream growth profile, and Shell’s Downstream strategy.

-2011 has started well, with the start up of new LNG at Qatargas 4, and the restart of refinery catalytic crackers at the Port Arthur at end-2010 and at Pernis in February 2011.

-New projects, combined with the expected 2011 start-up of Pearl gas-to-liquids in Qatar, and new oil sands upgrading capacity in Canada, underpin Shell’s production and financial growth targets for 2012.

-Shell continues to mature new options for future growth investment, with plans to drill 25 high potential exploration wells in 2011.

-Company is planning to take final investment decision on some 10 new projects in 2011-12, including Prelude Floating LNG in Australia, debottlenecking of the AOSP project in Canada oil sands, and deep water oil & gas developments at the Cardamon discovery in the Gulf of Mexico and at Malikai in Malaysia.

-Shell in 2010 added 1,370 million boe of proved oil and gas reserves before production, of which 1,197 million boe comes from Shell subsidiaries and 173 million boe is associated with the Shell share of equity accounted investments.

-With 2010 production of 1,242 million boe, headline reserves relacement ratio was 110%; organic reserves replacement ratio, which excludes the impact of oil price movements in the year, acquisitions and divestments, was 133%.

-At end 2010, net proved reserves attributable to Shell shareholders were 14,249 million boe, an increase of 117 million boe from end-2009, after taking into account 2010 production; Shell’s reserves to production ratio was 11.5 years at the end of 2010.

-Shares at 0815 GMT down 10 pence, or 0.5%, at 2076 pence valuing the company at GBP55.91 billion.

-By Ian Walker, Dow Jones Newswires; 44-20-7842-9296; [email protected]


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