New Shell CEO Ben van Beurden sets agenda for sharper performance and rigorous
capital discipline
The Hague, 30 January 2014. Speaking to investors today, new Shell CEO Ben van
Beurden updated on the company’s priorities: improving Shell’s financial results
and achieving better capital efficiency, as well as continuing to strengthen
operational performance and project delivery.
Van Beurden, who became the new CEO of Royal Dutch Shell plc (“Shell”) on 1
January 2014, said Shell’s strategy overall is sound. The company has a high
quality portfolio and key strengths in technology and project delivery. Shell
will continue to invest in new projects that deliver more energy to customers,
and create value for shareholders. The strategy is designed to deliver
through-cycle growth in cash flow, to drive competitive returns and a growing
dividend.
Van Beurden said: “Our ambitious growth drive in recent years has yielded a step
change in Shell’s portfolio and options, with more growth to come, but at the
same time we have lost some momentum in operational delivery, and we can sharpen
up in a number of areas.”
“Our overall strategy remains robust, but 2014 will be a year where we are
changing emphasis, to improve our returns and cash flow performance”, he
continued, highlighting three priorities:
•	Improved financial performance, including restructuring in some areas of the
company
•	Enhancing capital efficiency, with hard choices on new projects, reduced
growth investment, and more asset sales
•	Continued strong delivery of new projects, and integration of recent
acquisitions.
The landscape the company had expected has changed. Factors such as the
worsening security situation in Nigeria in 2013, and delays to non-operated
projects in several other countries, have altered the outlook. Oil prices remain
high globally, but North America natural gas prices and associated crude markers
remain low, and industry refining margins are under pressure. Restructuring and
improving profitability in North America Upstream resources plays, and Oil
Products world-wide, is a particular focus for the company.
The recent Ninth Circuit Court decision against the Department of the Interior
raises substantial obstacles to Shell’s plans for drilling in offshore Alaska.
As a result, Shell has decided to stop its exploration programme for Alaska in
2014. “This is a disappointing outcome, but the lack of a clear path forward
means that I am not prepared to commit further resources for drilling in Alaska
in 2014,” van Beurden said. “We will look to relevant agencies and the Court to
resolve their open legal issues as quickly as possible.”
The company will increase the pace of asset sales, which are expected to be $15
billion for 2014-15 combined in Upstream and Downstream. “We are making hard
choices in our world-wide portfolio to improve Shell’s capital efficiency”, van
Beurden said.
With a changing operational landscape and the streamlining of Shell’s portfolio,
the company will no longer be updating against previous cash flow and net
spending targets. “I want Shell to be measured on our competitive performance”,
van Beurden said.
Capital spending will be reduced. In 2013, this totalled $46 billion, including
$8 billion of acquisitions. In 2014, Shell expects total capital spending of
around $37 billion, including $2 billion of previously announced acquisitions.
Innovative large-scale projects such as Pearl gas-to-liquids have been the main
drivers behind Shell’s recent increase in cash flow, which reached over $87
billion in 2012-13 combined, an increase of 35% on 2010-11. Recent start-ups and
Shell’s latest projects and acquisitions – dominated by liquefied natural gas,
and deep-water oil in the Gulf of Mexico, Brazil and Malaysia – are expected to
build on this growth in 2014.
Shell has distributed more than $11 billion to shareholders in dividends and
repurchased $5 billion of shares in 2013. Reflecting confidence in the potential
for free cash flow growth in 2014, the company is expecting the Q1 2014 dividend
to be $0.47/share, an increase of over 4% compared to Q1 2013, and total
dividends announced in respect of 2014 to be potentially over $11 billion.
Ends

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Cautionary note
The companies in which Royal Dutch Shell plc directly and indirectly owns
investments are separate entities. In this announcement "Shell", "Shell Group"
and "Royal Dutch Shell" are sometimes used for convenience where references are
made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the
words "we", "us" and "our" are also used to refer to subsidiaries in general or
to those who work for them. These expressions are also used where no useful
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exercise a controlling influence. The companies in which Shell has significant
influence but not control are referred to as "associated companies" or
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controlled entities are also referred to as "equity-accounted investments". The
term "Shell interest" is used for convenience to indicate the direct and/or
indirect (for example, through our 23 per cent shareholding in Woodside
Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or
company, after exclusion of all third-party interest.
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could cause those results to differ materially from those expressed in the
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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
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including regulatory measures addressing climate change; (k) economic and
financial market conditions in various countries and regions; (l) political
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contracts with governmental entities, delays or advancements in the approval of
projects and delays in the reimbursement for shared costs; and (m) changes in
trading conditions. All forward looking statements contained in this
announcement are expressly qualified in their entirety by the cautionary
statements contained or referred to in this section. Readers should not place
undue reliance on forward looking statements. Additional factors that may affect
future results are contained in Shell's 20-F for the year ended 31 December 2012
(available at www.shell.com/investor and www.sec.gov ). These factors also
should be considered by the reader.  Each forward looking statement speaks only
as of the date of this announcement, 30 January 2014. Neither Shell nor any of
its subsidiaries nor the Shell Group undertake any obligation to publicly update
or revise any forward looking statement as a result of new information, future
events or other information. In light of these risks, results could differ
materially from those stated, implied or inferred from the forward looking
statements contained in this announcement