SEC report prepared by Stürtz GmbH

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

REPORT OF FOREIGN ISSUER

Pursuant to Rule 13a-16 or 15d-16

under the Securities Exchange Act of 1934

For the month of July 2006

Commission File Number 1-32575

Royal Dutch Shell plc

(Exact name of registrant as specified in its charter)

30, Carel van Bylandtlaan, 2596 HR The Hague

The Netherlands

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: 

Form 20-F [X]      Form 40-F _______

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ......

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ...... 

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934..

Yes _______       No [X]  

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- _______  


Delivery and growth – leveraging a strong portfolio

Royal Dutch Shell’s second quarter 2006 CCS earnings were $6.3 billion, an increase of 36% versus a year ago and an increase of 42% on a basic CCS earnings per share basis versus a year ago.

Second quarter 2006 cashflow from operating activities was $7.8 billion compared to $6.3 billion a year ago. Excluding working capital movements and taxation effects, cashflow from operating activities was $11.9 billion compared to $8.7 billion a year ago.

Royal Dutch Shell’s second quarter dividend has been announced at €0.25 per share, an increase of 9% from year-ago levels.

$2.5 billion, or 1.1% of Royal Dutch Shell shares were bought back for cancellation during the quarter.

Chief Executive Jeroen van der Veer commented: “These results are underpinned by overall good operational performance and not simply high energy prices”.

“We are delivering our strategy, with ambitious growth plans upstream, and selective investment downstream. We plan to open up some 20 billion barrels of oil equivalent resources by the end of this decade. We are making steady progress on our projects, and building our portfolio for the future”.

Summary unaudited results

SECOND
QUARTER

$ million

SIX
MONTHS

2006

2005

%

2006

2005

%

7,324

5,236

+40

Income attributable to shareholders

14,217

11,911

+19

1,010

589

Estimated current cost of supplies (CCS) adjustment for Oil Products and Chemicals
(see note 2)

1,815

1,809

6,314

4,647

+36

CCS earnings

12,402

10,102

+23

1.13

0.78

Basic earnings per share ($)

2.19

1.77

0.15

0.09

Estimated CCS adjustment per share ($)

0.28

0.26

0.98

0.69

Basic CCS earnings per share ($)

1.91

1.51

0.25

0.23

Dividend per ordinary share (Euro) 1

0.50

0.46

1. Q1 2005 based on dividend paid by Royal Dutch Petroleum Company, adjusted for the effects of the unification.

Key features of the quarter

Exploration & Production segment earnings were 46% higher than a year ago, mainly reflecting strong oil and gas price realisations and income tax credits, partly offset by lower volumes and higher costs. Production for second quarter 2006 was 3,253 thousand barrels oil equivalent (boe) per day. Excluding the impact of hurricane damage in the Gulf of Mexico, security issues in Nigeria and Production Sharing Contract (PSC) impacts from increased oil prices, production was unchanged versus a year ago.

Gas & Power segment earnings increased substantially versus a year ago, driven by LNG prices and marketing and a 15% increase in LNG volumes from new train start-ups in Nigeria and Oman. Second quarter 2005 earnings included $226 million of charges mainly related to divestments.

In Oil Products, higher earnings, due to stronger refining margins and increased trading profits, were partially offset by the impact of reduced refinery utilisation mainly in Europe and lower retail marketing margins. In Chemicals, margin realisations were unchanged compared to a year ago despite rising feedstock costs.

Gearing (see note 6) was 13.6% versus, on a comparable Royal Dutch Shell basis, 13.0% at the end of the second quarter 2005. Total cash returned to shareholders in the quarter was $4.6 billion.

Capital investment for the second quarter 2006 was $6.7 billion, excluding the minority share of Sakhalin of $0.4 billion and including the $2.2 billion oil sands acquisition of BlackRock Ventures Inc. in Canada by Shell Canada.

The industry continues to face significant cost pressures. Capital spending plans for 2006 and 2007 are unchanged at respectively around $19 billion, and some $21 billion (excluding the minority share of Sakhalin). An additional $2.9 billion has been spent year to date on portfolio opportunities including the BlackRock Ventures Inc. acquisition. Some $0.7 billion of proceeds were realised from divestments, predominantly in Downstream.

Van der Veer commented “We are making good progress on our projects in Downstream. We have taken the final investment decision on the expansion of our petrochemicals capacity at Bukom in Singapore, which is Shell’s largest refinery. The Motiva joint venture continues to study the opportunity to expand our refining capacity at Port Arthur, to create one of the largest refineries in the United States”.

“In Upstream, we are making progress on two important unconventional projects. These will become major industrial complexes, in gas-to-liquids in Qatar and in Canada’s oil sands.”

“We have taken the final investment decision on the Pearl GTL project which will produce 1.6 billion cubic feet of gas per day to deliver approximately 120 thousand barrels of oil equivalent per day of condensate and generate 140 thousand barrels per day of clean liquid hydrocarbon products. We continue to study the opportunity to expand the oil sands activities at the Athabasca Oil Sands Project and expect Shell Canada to make a decision shortly. With over 20 years of production capacity, these are true long-life assets, which will underpin the group for decades to come”.

Van der Veer concluded “We are making major investments, which are measured in the tens of billions, to create new energy capacity for our customers, and to create long-term value for our shareholders.”

Summary segment earnings

QUARTERS

$ million

SIX MONTHS

Q2

Q1

Q2

2006

2006

2005

2006

2005

%

Segment earnings

3,999

3,743

2,745

Exploration & Production

7,742

5,700

516

765

11

Gas & Power

1,281

487

2,065

1,333

2,028

Oil Products (CCS basis)

3,398

3,908

348

139

280

Chemicals (CCS basis)

487

634

(451)

222

(218)

Other Industry and Corporate

(229)

(343)

(163)

(114)

(199)

Minority interests

(277)

(284)

___________

___________

___________

___________

___________

6,314

6,088

4,647

+36

CCS segment earnings

12,402

10,102

+23

___________

___________

___________

___________

___________

Basic earnings per share (see notes 1 and 9)

QUARTERS

SIX MONTHS

Q2

Q1

Q2

2006

2006

2005

2006

2005

1.13

1.06

0.78

Earnings per share ($)

2.19

1.77

0.98

0.94

0.69

CCS earnings per share ($)

1.91

1.51

Diluted earnings per share (see notes 1 and 9)

QUARTERS

SIX MONTHS

Q2

Q1

Q2

2006

2006

2005

2006

2005

1.13

1.05

0.78

Earnings per share ($)

2.18

1.77

0.97

0.93

0.69

CCS earnings per share ($)

1.91

1.51

Summary segment earnings - continued

Earnings in the second quarter 2006 reflected the following items, which in aggregate were a net charge of $232 million (compared to net charges of $545 million in the second quarter 2005).

These included charges in Corporate and in other segments including minority interests, the effects of Canadian tax rate changes on deferred tax and the restructuring of employee retirement plans in France as detailed below and as summarised in the table:

Exploration & Production second quarter 2006 earnings included a combined net income of $304 million including Canadian tax revisions and income related to the mark-to-market valuation of certain UK gas contracts ($147 million).

Oil Products second quarter 2006 earnings included net charges of $65 million related to French employee retirement plans and the Canadian tax rate change.

Chemicals second quarter 2006 earnings included net charges of $30 million related to French employee retirement plans and the Canadian tax rate change.

In connection with the putative shareholder class actions filed in the United States District Court for the District of New Jersey relating to the 2004 recategorisation of certain hydrocarbon reserves, Shell has determined that it would be prepared to resolve that litigation for, among other terms, a payment by Shell of $500 million. Accordingly, management of the Shell Group has established a $500 million provision in respect of this litigation. No settlement has been reached in the matter (see note 10). The provision is included in the Corporate segment.

The Canadian tax revisions also resulted in an additional income attributable to Minority interests in the second quarter 2006 of $41 million.

Summary table

QUARTERS

$ million

SIX MONTHS

Q2

Q1

Q2

2006

2006

2005

2006

2005

Segment earnings impact

304

113

(149)

Exploration & Production

417

(190)

-

-

(226)

Gas & Power

-

(178)

(65)

-

-

Oil Products (CCS basis)

(65)

427

(30)

-

(80)

Chemicals (CCS basis)

(30)

(294)

(400)

-

(90)

Other Industry and Corporate

(400)

(90)

(41)

-

-

Minority interests

(41)

-

___________

___________

___________

___________

___________

(232)

113

(545)

CCS earnings impact

(119)

(325)

___________

___________

___________

___________

___________

These items generally relate to events with an impact of greater than $50 million on earnings and are shown to provide additional insight in the direction of the segment earnings, CCS earnings and income attributable to shareholders. Further additional comments are provided in the section ‘Earnings per industry segment’on page 5 and onwards.

Earnings per industry segment

Upstream

QUARTERS

SIX MONTHS

Q2

Q1

Q2

 

2006

2006

2005

 

2006

2005

 

$/bbl

Realised Oil Prices

$/bbl

63.99

57.67

48.22

WOUSA

60.75

46.11

63.63

55.16

47.08

USA

59.56

45.44

63.95

57.39

48.05

Global

60.61

46.01

 

$/thousand scf

Realised Gas Prices

$/thousand scf

6.54

7.08

4.61

Europe

6.83

4.89

4.18

4.76

3.48

WOUSA (including Europe)

4.48

3.57

7.36

9.56

7.31

USA

8.43

7.07

4.82

5.64

4.39

Global

5.24

4.36

 

Oil and gas marker industry prices (period average)

69.51

61.80

51.65

Brent $/bbl

65.65

49.70

70.45

63.30

53.10

WTI $/bbl

66.88

51.50

6.59

7.75

6.94

Henry Hub $/thousand scf

7.17

6.68

34.60

69.42

30.25

UK National Balancing Point pence/therm

52.42

33.92

Exploration & Production

QUARTERS

$ million

SIX MONTHS

Q2

Q1

Q2

2006

2006

2005

%

2006

2005

%

3,999

3,743

2,745

+46

Segment earnings

7,742

5,700

+36

1,897

1,966

2,168

-13

Crude oil production (thousand b/d)

1,931

2,156

-10

7,865

10,324

7,875

Natural gas production available for sale (million scf/d)

9,088

8,869

+2

3,253

3,746

3,526

-8

Barrels of oil equivalent (thousand boe/d)

3,498

3,684

-5

Exploration & Production segment earnings of $3,999 million were 46% higher than a year ago ($2,745 million), mainly reflecting strong oil and gas price realisations and income tax credits, partly offset by lower volumes and higher costs.

Second quarter 2006 earnings included a combined net income of $304 million including Canadian tax revisions and income related to the mark-to-market valuation of certain UK gas contracts ($147 million). The second quarter 2005 included net charges of $149 million.

Liquids realisations were 33% higher than a year ago, in line with increases in marker crudes Brent of 35% and WTI of 33%. Outside the USA gas realisations increased by 20% and in the USA gas realisations increased by 1%.

Second quarter 2006 production was 3,253 thousand barrels of oil equivalent (boe) per day.

Production included new volumes of 190 thousand boe per day mainly from Bonga (Shell share 55%) and Erha (Shell share 44%) in Nigeria, West Salym (Shell share 50%) in Russia, Champion West Phase III (Shell share 50%) in Brunei and acquired production onshore Texas (Shell share 100%) compared to last year. In the USA production restarted from the Mars platform (Shell share 72%).

Production was impacted by the continued partial shut-in of production in Nigeria, mainly in the Western Niger Delta due to the security situation, and production deferred in the Gulf of Mexico as a result of the 2005 hurricanes. Excluding the impact of security concerns in Nigeria, hurricane damage in the Gulf of Mexico, and PSC impacts from increased oil prices, production was unchanged versus a year ago.

Production from Shell Petroleum Development Company’s Nigerian operations was 177 thousand boe per day (Shell share) lower than a year ago due to shut-in production resulting from security concerns. A similar volume remains shut-in. Also in Nigeria, deepwater production from the two new offshore Floating Production Storage and Offloading (FPSO) vessels Bonga and Erha has been ramping up and by the end of the second quarter 2006 had reached over 150 thousand boe per day (Shell share).

Following the continued security-related deferral of production in Nigeria the production outlook for the year would be around 3.4 million boe per day based on $50 per barrel oil prices and in the possible event that Nigerian volumes were deferred for the rest of 2006. At present Shell is in the early stages of the return to operations process. No firm date can be given for re-start of production nor is it possible to predict the rate of ramp up to full production.

In the UK, enactment of the announced UK tax increases that take effect from January 1, 2006, has been delayed to the third quarter 2006. The change will result in an expected one-time charge of some $300 million (including deferred tax revaluations) in the third quarter 2006. Additionally some $100 million to $150 million earnings impact (subject to oil price and operations) is expected for the third quarter 2006 and on an ongoing basis.

Portfolio developments:

In the Gulf of Mexico, the Mars platform resumed production during the quarter ahead of schedule and was almost 10% ahead of prior production rates by the end of the quarter at 145 thousand bbl of oil per day and 155 million cubic feet of gas per day (Shell share 82 thousand bbl of oil per day and 88 million cubic feet of gas per day). During the Mars recovery operation topside modifications were made to accommodate future wells and to minimise future planned shut-ins.

In Canada, Shell Canada acquired control of BlackRock Ventures Inc. (BlackRock) on June 21, 2006 and as at July 11, 2006 holds 100% of the BlackRock shares. This had no material impact on second quarter 2006 earnings. BlackRock has in situ and conventional oil activities in the Peace River, Cold Lake and Lloydminster areas of Athabasca, with oil in place estimated to be at least 18 billion barrels. In the first quarter of 2006, Royal Dutch Shell purchased in situ leases in Northern Alberta, in SURE Northern Energy. These two acquisitions together have added in excess of 48 billion barrels of oil in place, at a combined cost of some $2.6 billion. Our total oil in place in these in situ plays is now estimated to be at least 55 billion barrels. A variety of existing recovery techniques and new technologies will be ass essed to maximise recovery from this in situ portfolio, as well as potential investments in dedicated upgrading capacity. In addition, we continue to study the opportunity to expand the production capacity at the Athabasca Oil Sands Project’s mining facilities, and expect the operator, Shell Canada, to make their investment decision shortly.

In Russia, the installation of the Lunskoye-A gas production platform topside was completed offshore Sakhalin. The Sakhalin 2 project is progressing in line with the 2005 schedule and budget.

In Ukraine, a Joint Activity Agreement was signed with Ukrgazvydobuvannya, a subsidiary of Naftogaz Ukrainy. Shell has farmed into eight licences in the Dniepr Donets Basin and exploration work is planned to commence this year.

Gas & Power

QUARTERS

$ million

SIX MONTHS

Q2

Q1

Q2

2006

2006

2005

%

2006

2005

%

516

765

11

Segment earnings

1,281

487

+163

2.84

3.00

2.48

+15

Equity LNG sales volume (million tonnes)

5.84

5.36

+9

Gas and Power segment earnings were $516 million compared with $11 million a year ago. Second quarter 2005 earnings included $226 million of charges mainly related to divestments. Excluding these charges, second quarter 2006 earnings were 118% higher than second quarter 2005, reflecting strong LNG results and marketing and trading earnings.

LNG results benefited from strong prices and continued volume growth. LNG sales volume was up 15% from a year ago, reflecting additional LNG capacity through Trains 4 and 5 in Nigeria LNG (Shell share 26%) and Qalhat LNG in Oman (Shell indirect share 11%). Marketing and trading earnings continue to be driven by good performance and favourable conditions in European and North American markets.

Portfolio developments:

Shell and Qatar Petroleum launched the integrated Pearl Gas to Liquids (GTL) project in Qatar. The Pearl GTL project includes the development of offshore natural gas resources, transporting and processing the gas onshore to extract liquids, and the conversion of gas into clean liquid hydrocarbon products for export. The integrated project cost is expected to be around $4 to $6 per barrel of oil equivalent of resources.

The North West Shelf Venture in Australia (Shell share, direct and indirect, 22%) delivered the first LNG cargo to China at the Guangdong LNG import terminal under a 25 year, 3.3 million tonnes per annum sales and purchase agreement.

Hubei Shuanghuan Ltd started production of synthesis gas from the first plant in China to use Shell’s coal gasification technology. Also in China, in July Shell and Shenhua Ningxia Coal Industry Ltd announced an agreement for a multi-year study on the feasibility of developing a plant to convert coal into liquids using Shell technology.

Downstream

QUARTERS

SIX MONTHS

Q2

Q1

Q2

 

2006

2006

2005

 

2006

2005

 

$/bbl

Refining marker industry gross margins
(period average)

$/bbl

22.20

13.00

15.35

ANS US West Coast coking margin

17.60

14.80

20.85

12.50

10.30

WTS US Gulf Coast coking margin

16.65

9.20

4.75

2.35

5.00

Rotterdam Brent complex

3.55

3.75

4.05

1.20

3.70

Singapore 80/20 Arab light/Tapis complex

2.60

3.10

Oil Products

QUARTERS

$ million

SIX MONTHS

Q2

Q1

Q2

2006

2006

2005

%

2006

2005

%

3,017

2,103

2,664

+13

Segment earnings

5,120

5,715

-10

(952)

(770)

(636)

CCS adjustment – see note 2

(1,722)

(1,807)

___________

___________

___________

 

___________

___________

2,065

1,333

2,028

+2

Segment CCS earnings

3,398

3,908

-13

 

3,789

3,862

3,981

-5

Refinery intake (thousand b/d)

3,825

4,019

-5

6,426

6,525

7,458

See1

Total Oil products sales (thousand b/d)

6,475

7,461

See1

1. Certain contracts are classified as held for trading purposes and reported net rather than gross with effect from Q3 2005. The effect in Q1 2006 and Q2 2006 is a reduction in Total Oil products sales of approximately 890 thousand b/d and 840 thousand b/d respectively.

Second quarter 2006 segment earnings were $3,017 million compared to $2,664 million for the same period last year.

Second quarter 2006 CCS earnings were $2,065 million including net charges of $65 million related to restructuring of employee retirement plans in France, partially offset by the impact of a reduction in deferred taxes in Canada arising from reduced tax rates. Earnings in the second quarter of 2005 were $2,028 million. Higher earnings due to stronger refining margins particularly in the United States, and increased trading profits from a positive trading environment were partially offset by the impact of lower retail marketing margins and reduced refinery utilisation mainly in Europe.

Compared to the second quarter 2005, Manufacturing, Supply and Distribution, industry refining margins were significantly higher on the US Gulf coast and the US West coast. Margins were also higher in Asia Pacific while in Europe margins declined. Refinery utilisation on an Equivalent Distillation Capacity (EDC) basis was 77.3% compared to 80.4% in the second quarter of 2005, mainly due to higher levels of downtime in Europe in the second quarter of 2006. Refinery intake declined 4.8% compared to the second quarter of 2005.

In Marketing, earnings declined compared to the same period a year ago. Retail earnings declined due to margin compression as a result of higher product cost. B2B earnings increased mainly due to increased margins for marine, aviation fuels and bitumen. Lubricants earnings improved due to higher base oil margins. Marketing sales volumes declined 3.6% compared to volumes in the second quarter of 2005, reflecting supply constraints and including the impact of divestments (1.3%) and rationalised B2B volumes (0.5%).

Portfolio developments:

Motiva Enterprises (Shell share 50%) continued progress towards a consideration to expand the Port Arthur Refinery in the USA which would add up to 325 thousand barrels per day crude throughput bringing total throughput to up to approximately 600 thousand barrels per day. Subject to commercial conditions for an investment decision and regulatory approvals, Motiva expects to begin construction in 2007 with the brownfield expansion to come on line post 2009.

In Turkey the joint venture between Shell and Turcas Petrol A.S. comprising over 1,200 retail stations (Shell share 70%) commenced operations on July 1, 2006. The divestments of marketing and distribution assets in Colombia, Uruguay and Cameroon were completed in the second quarter 2006. In July 2006, the divestments of marketing and distribution business in Puerto Rico, Bermuda and various Pacific Islands were announced with an expected completion later this year.

Chemicals

QUARTERS

$ million

SIX MONTHS

Q2

Q1

Q2

2006

2006

2005

%

2006

2005

%

446

183

259

Segment earnings

629

708

(98)

(44)

21

CCS adjustment – see note 2

(142)

(74)

___________

___________

___________

 

___________

___________

348

139

280

+24

Segment CCS earnings

487

634

-23

5,870

5,941

5,647

+4

Sales volumes (thousand tonnes)

11,811

11,508

+3

Second quarter 2006 segment earnings were $446 million compared to $259 million for the same period last year.

Second quarter CCS earnings were $348 million including net charges of $30 million mainly related to restructuring of employee retirement plans in France partially offset by the impact of a reduction in deferred taxes in Canada arising from reduced tax rates. This compares to $280 million for the second quarter of 2005, which included some $80 million charges related to divested assets.

Sales volumes were 4% higher reflecting trading volume increases as well as higher sales of first line derivatives, mainly in Asia Pacific. Operating rates were 2 percentage points above those a year ago reflecting lower planned downtime as well as inventory building in preparation for a heavy planned maintenance programme in the third quarter 2006 in Europe and the USA. Earnings included a positive contribution from the Nanhai joint venture (Shell share 50%) in China reflecting the ramping up of operating rates to 90% at the end of the second quarter 2006.

Margin realisations were similar to a year ago despite rising feedstock costs for all regions.

Portfolio developments:

Shell has taken a final investment decision for the construction of a world-scale ethylene cracker and Mono-Ethylene Glycol (MEG) plant in Singapore. Construction of the 800 thousand tonnes per annum (tpa) ethylene cracker is due to begin later this year with start-up anticipated towards 2009/2010. The cracker and the new MEG plant will create an advantaged site through full integration with the 464 thousand barrels per day Bukom refinery (Shell share 100%) enabling feedstock and operating benefits. Currently Shell has more than 1 million tonnes per annum ethylene cracking capacity (Shell share 50%) in Singapore equal to some 10% of Shell’s global ethylene cracking capacity.

Other Industry and Corporate segments

QUARTERS

$ million

SIX MONTHS

Q2

Q1

Q2

2006

2006

2005

%

2006

2005

%

(7)

(8)

(8)

Other Industry segment earnings

(15)

(16)

(444)

230

(210)

Corporate segment earnings

(214)

(327)

___________

___________

___________

 

___________

___________

(451)

222

(218)

Other Industry and Corporate segments results

(229)

(343)

Second quarter Other Industry and Corporate segment results were a loss of $451 million compared to a loss of $218 million a year ago.

In Corporate a provision in respect of litigation was taken of $500 million (see note 10).

Improved net interest resulted from higher average cash levels and capitalised interest, partly offset by negative results from currency movements.

 

Note

All amounts shown throughout this report are unaudited.

Third quarter results for 2006 are expected to be announced on October 26, 2006.

In this Report “Group” is defined as Royal Dutch Shell together with all of its consolidated subsidiaries. The expressions “Shell”, “Group”, “Shell Group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to the Group or Group companies in general. Likewise, the words “we”, “us” and “our” are also used to refer to Group companies 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. The expression “Group companies” as used in this Report refers to companies in which Royal Dutch Shell either directly or indirectly has control, by having either a majority of the voting rights or the r ight to exercise a controlling influence. The companies in which the Group has significant influence but not control are referred to as “associated companies” or “associates” and companies in which the Group has joint control are referred to as “jointly controlled entities”. In this Report, associates and jointly controlled entities are also referred to as “equity accounted investments”.

This document 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 an d assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘probably’’, ‘‘project’’, ‘‘will’’, ‘‘seek’’, ‘‘target’’, ‘‘risks’’, ‘‘goals’’, ‘‘should’’ 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 Report, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b ) changes in demand for the Group’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserve estimates; (f) loss of market 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 potential litigation and regulatory effects arising from recategorisation of reserves; (k) economic and financial market conditions in various countries and regions; (l) political risks, project delay or advancement, approvals and cost estimates; and (m) changes in trading conditions. All forward-looking statements contained in this Report are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers shoul d not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of this Report. Neither Royal Dutch Shell 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 Report.

Please refer to the Annual Report on Form 20-F for the year ended December 31, 2005 for a description of certain important factors, risks and uncertainties that may affect the Company's businesses.

Cautionary Note to US Investors:

The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this announcement, such as "barrels of oil equivalent in place" that the SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575 and disclosure in our Forms 6-K file No 1-32575, available on the SEC’s websitewww.sec.gov. You can also obtain these forms from the SEC by calling 1-800-SEC-0330.

July 27, 2006

 

Appendix 1: Royal Dutch Shell financial report and tables

Statement of income (see note 1)

QUARTERS

$ million

SIX MONTHS

Q2

Q1

Q2

2006

2006

2005

%

2006

2005

%

83,127

75,964

82,644

+1

Revenue1

159,091

154,800

+3

67,838

61,922

69,464

Cost of sales

129,760

128,029

___________

___________

___________

___________

___________

15,289

14,042

13,180

+16

Gross profit

29,331

26,771

+10

4,429

3,413

3,917

Selling, distribution and administrative expenses

7,842

7,456

250

281

248

Exploration

531

509

1,829

1,823

1,080

Share of profit of equity accounted investments

3,652

2,653

47

(155)

39

Net finance costs and other (income)/expense

(108)

109

___________

___________

___________

___________

___________

12,392

12,326

10,056

+23

Income before taxation

24,718

21,350

+16

4,865

5,310

4,595

Taxation

10,175

8,869

___________

___________

___________

___________

___________

7,527

7,016

5,461

Income from continuing operations

14,543

12,481

-

-

-

Income/(loss) from discontinued operations

-

(214)

___________

___________

___________

___________

___________

7,527

7,016

5,461

+38

Income for the period

14,543

12,267

+19

==========

==========

==========

==========

==========

203

123

225

Income attributable to minority interests

326

356

___________

___________

___________

___________

___________

7,324

6,893

5,236

+40

Income attributable to shareholders

14,217

11,911

+19

___________

___________

___________

___________

___________

1. Revenue is stated after deducting sales taxes, excise duties and similar levies of $17,984 million in Q2 2006, $16,709 million in Q1 2006, $18,739 million in Q2 2005 and $17,912 million in Q1 2005.

Earnings by industry segment(see notes 2 and 5)

QUARTERS

$ million

SIX MONTHS

Q2

Q1

Q2

2006

2006

2005

%

2006

2005

%

Exploration & Production:

3,014

2,795

1,644

+83

World outside USA

5,809

3,654

+59

985

948

1,101

-11

USA

1,933

2,046

-6

___________

___________

___________

___________

___________

3,999

3,743

2,745

+46

7,742

5,700

+36

___________

___________

___________

___________

___________

Gas & Power:

468

723

74

+532

World outside USA

1,191

592

+101

48

42

(63)

USA

90

(105)

___________

___________

___________

___________

___________

516

765

11

1,281

487

+163

___________

___________

___________

___________

___________

Oil Products (CCS basis):

1,332

1,071

1,500

-11

World outside USA

2,403

2,975

-19

733

262

528

+39

USA

995

933

+7

___________

___________

___________

___________

___________

2,065

1,333

2,028

+2

3,398

3,908

-13

___________

___________

___________

___________

___________

Chemicals (CCS basis):

309

173

237

+30

World outside USA

482

486

-1

39

(34)

43

-9

USA

5

148

-97

___________

___________

___________

___________

___________

348

139

280

+24

487

634

-23

___________

___________

___________

___________

___________

(7)

(8)

(8)

Other industry segments

(15)

(16)

___________

___________

___________

___________

___________

6,921

5,972

5,056

+37

TOTAL OPERATING SEGMENTS

12,893

10,713

+20

___________

___________

___________

___________

___________

Corporate:

39

-

(74)

Interest income/(expense)

39

(144)

(73)

112

(6)

Currency exchange gains/(losses)

39

(46)

(410)

118

(130)

Other - including taxation

(292)

(137)

___________

___________

___________

___________

___________

(444)

230

(210)

(214)

(327)

___________

___________

___________

___________

___________

(163)

(114)

(199)

Minority interests

(277)

(284)

___________

___________

___________

___________

___________

6,314

6,088

4,647

+36

CCS EARNINGS

12,402

10,102

+23

___________

___________

___________

___________

___________

1,010

805

589

CCS adjustment for Oil Products and Chemicals

1,815

1,809

___________

___________

___________

___________

___________

7,324

6,893

5,236

+40

Income attributable to shareholders of Royal Dutch Shell plc

14,217

11,911

+19

___________

___________

___________

___________

___________

Summarised balance sheet (see notes 1 and 7)

 

 

 

$ million

 

 

 

 

 

 

 

 

 

 

Jun 30

Mar 31

Jun 30

 

ASSETS

2006

2006

2005

Non-current assets:

Intangible assets

4,721

4,444

4,403

Property, plant and equipment

94,102

88,537

84,816

Investments:

equity accounted investments

19,083

18,153

18,679

financial assets

3,912

3,929

3,401

Deferred tax

2,259

2,393

2,961

Prepaid pension costs

3,143

2,742

2,320

Other

4,569

4,667

4,411

___________

___________

___________

131,789

124,865

120,991

___________

___________

___________

Current assets:

Inventories

24,660

21,600

18,566

Accounts receivable

62,327

60,801

51,420

Cash and cash equivalents

11,774

12,767

11,520

___________

___________

___________

98,761

95,168

81,506

___________

___________

___________

___________

___________

___________

TOTAL ASSETS

230,550

220,033

202,497

___________

___________

___________

LIABILITIES

Non-current liabilities:

Debt

8,472

7,347

7,905

Deferred tax

12,007

11,061

12,807

Retirement benefit obligations

6,271

5,926

6,239

Other provisions

8,682

7,708

6,781

Other

4,650

4,550

4,020

___________

___________

___________

40,082

36,592

37,752

___________

___________

___________

Current liabilities:

Debt

6,112

5,185

5,479

Accounts payable and accrued liabilities

63,701

62,350

52,678

Taxes payable

10,525

11,047

10,789

Retirement benefit obligations

285

289

300

Other provisions

1,612

1,599

1,430

___________

___________

___________

82,235

80,470

70,676

___________

___________

___________

___________

___________

___________

TOTAL LIABILITIES

122,317

117,062

108,428

___________

___________

___________

Equity attributable to shareholders of Royal Dutch Shell plc

100,213

95,501

87,829

Minority interests

8,020

7,470

6,240

___________

___________

___________

TOTAL EQUITY

108,233

102,971

94,069

___________

___________

___________

TOTAL LIABILITIES AND EQUITY

230,550

220,033

202,497

___________

___________

___________

Summarised statement of cash flows (see notes 1 and 8)

QUARTERS

$ million

SIX MONTHS

Q2

Q1

Q2

2006

2006

2005

2006

2005

CASH FLOW FROM OPERATING ACTIVITIES:

7,527

7,016

5,461

Income for the period

14,543

12,267

Adjustment for:

4,763

5,015

5,086

Current taxation

9,778

9,397

121

232

204

Interest (income)/expense

353

364

3,132

2,812

3,136

Depreciation, depletion and amortisation

5,944

6,291

(8)

(185)

(193)

(Profit)/loss on sale of assets

(193)

(751)

(3,276)

(1,979)

(1,918)

Decrease/(increase) in net working capital

(5,255)

(3,469)

(1,829)

(1,823)

(1,080)

Share of profit of equity accounted investments

(3,652)

(2,439)

1,556

1,060

1,515

Dividends received from equity accounted investments

2,616

2,507

903

578

(142)

Deferred taxation and other provisions

1,481

(534)

489

(507)

(246)

Other

(18)

57

___________

___________

___________

___________

___________

13,378

12,219

11,823

Cash flow from operating activities (pre-tax)

25,597

23,690

___________

___________

___________

___________

___________

(5,544)

(4,395)

(5,501)

Taxation paid

(9,939)

(8,688)

___________

___________

___________

___________

___________

7,834

7,824

6,322

Cash flow from operating activities

15,658

15,002

___________

___________

___________

___________

___________

CASH FLOW FROM INVESTING ACTIVITIES:

(6,630)

(3,819)

(3,736)

Capital expenditure

(10,449)

(6,670)

(177)

(231)

(243)

Investments in equity accounted investments

(408)

(431)

211

506

490

Proceeds from sale of assets

717

1,498

36

8

182

Proceeds from sale of equity accounted investments

44

232

29

(40)

274

Proceeds from sale of / additions to financial assets

(11)

250

240

234

177

Interest received

474

367

___________

___________

___________

___________

___________

(6,291)

(3,342)

(2,856)

Cash flow from investing activities

(9,633)

(4,754)

___________

___________

___________

___________

___________

CASH FLOW FROM FINANCING ACTIVITIES:

1,852

(345)

(71)

Net increase/(decrease) in debt

1,507

(796)

(261)

(361)

(275)

Interest paid

(622)

(529)

423

360

452

Change in minority interests

783

803

(2,512)

(1,344)

-

Net issue/(repurchase) of shares

(3,856)

(500)

Dividends paid to:

(2,091)

(1,838)

(2,009)

Shareholders of Royal Dutch Shell plc

(3,929)

(6,785)

(161)

(44)

(58)

Minority interest

(205)

(105)

Treasury shares:

135

91

103

Net sales/(purchases) and dividends received

226

246

___________

___________

___________

___________

___________

(2,615)

(3,481)

(1,858)

Cash flow from financing activities

(6,096)

(7,666)

___________

___________

___________

___________

___________

79

36

(170)

Currency translation differences relating to cash and cash equivalents

115

(263)

___________

___________

___________

___________

___________

(993)

1,037

1,438

INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS

44

2,319

___________

___________

___________

___________

___________

12,767

11,730

10,082

Cash and cash equivalents at beginning of period

11,730

9,201

11,774

12,767

11,520

Cash and cash equivalents at end of period

11,774

11,520

Operational data – Upstream

QUARTERS

SIX MONTHS

Q2

Q1

Q2

 

2006

2006

2005

%

 

2006

2005

%

 

thousand b/d

CRUDE OIL PRODUCTION

thousand b/d

 

488

531

566

Europe

509

569

321

336

375

Africa

329

375

232

232

233

Asia Pacific

232

233

439

408

413

Middle East, Russia, CIS

424

403

295

291

403

USA

293

402

76

91

80

Other Western Hemisphere

83

86

___________

___________

___________

 

_________

_________

1,851

1,889

2,070

Total crude oil production excluding oil sands

1,870

2,068

46

77

98

Oil sands

61

88

___________

___________

___________

 

_________

_________

1,897

1,966

2,168

-13

Total crude oil production including oil sands

1,931

2,156

-10

___________

___________

___________

 

_________

_________

 

million scf/d 1

NATURAL GAS PRODUCTION

million scf/d 1

AVAILABLE FOR SALE

 

3,027

5,447

3,175

Europe

4,230

4,058

481

444

383

Africa

463

385

2,381

2,488

2,225

Asia Pacific

2,434

2,297

304

320

256

Middle East, Russia, CIS

312

264

1,175

1,117

1,357

USA

1,146

1,371

497

508

479

Other Western Hemisphere

503

494

___________

___________

___________

 

_________

_________

7,865

10,324

7,875

 

9,088

8,869

+2

___________

___________

___________

 

_________

_________

 

thousand boe/d 2

BARRELS OF OIL EQUIVALENT

thousand boe/d 2

 

1,010

1,470

1,113

Europe

1,238

1,269

404

413

441

Africa

409

441

642

660

617

Asia Pacific

651

629

491

463

457

Middle East, Russia, CIS

478

448

498

484

637

USA

491

638

162

179

163

Other Western Hemisphere

170

171

___________

___________

___________

 

_________

_________

3,207

3,669

3,428

Total production excluding oil sands

3,437

3,596

46

77

98

Oil sands

61

88

___________

___________

___________

 

_________

_________

3,253

3,746

3,526

-8

Total production including oil sands

3,498

3,684

-5

___________

___________

___________

 

_________

_________

1. scf/d = standard cubic feet per day; 1 standard cubic foot = 0.0283 cubic metre

2. Natural gas converted to oil equivalent at 5.8 million scf/d = thousand boe/d

Operational data - Downstream

QUARTERS

SIX MONTHS

Q2

Q1

Q2

2006

2006

2005

%

2006

2005

%

thousand b/d

thousand b/d

REFINERY PROCESSING INTAKE

1,627

1,742

1,775

Europe

1,684

1,790

832

813

829

Other Eastern Hemisphere

823

848

978

948

988

USA

963

994

352

359

389

Other Western Hemisphere

355

387

_________

_________

_________

_________

_________

3,789

3,862

3,981

-5

3,825

4,019

-5

_________

_________

_________

_________

_________

OIL SALES

2,186

2,148

2,587

Gasolines

2,167

2,560

780

732

844

Kerosines

756

843

2,071

2,196

2,449

Gas/Diesel oils

2,133

2,446

735

808

875

Fuel oil

771

890

654

641

703

Other products

648

722

_________

_________

_________

_________

_________

6,426

6,525

7,458

See1

Total oil products1*

6,475

7,461

See1

2,513

2,493

5,116

Crude oil 1

2,503

4,773

_________

_________

_________

_________

_________

8,939

9,018

12,574

See1

Total oil sales1

8,978

12,234

See1

_________

_________

_________

_________

_________

*comprising

1,948

2,021

2,037

Europe

1,984

2,082

1,229

1,216

1,243

Other Eastern Hemisphere

1,222

1,236

1,502

1,477

2,540

USA

1,490

2,478

652

666

697

Other Western Hemisphere

659

697

1,095

1,145

941

Export sales

1,120

968

thousand tonnes

CHEMICAL SALES VOLUMES BY MAIN PRODUCT CATEGORY2**

thousand tonnes

3,504

3,714

3,418

Base chemicals

7,218

6,931

2,361

2,215

2,192

First line derivatives

4,576

4,499

5

12

37

Other

17

78

_________

_________

_________

_________

_________

5,870

5,941

5,647

+4

11,811

11,508

+3

_________

_________

_________

_________

_________

**comprising

2,433

2,463

2,440

Europe

4,896

5,017

1,370

1,444

1,264

Other Eastern Hemisphere

2,814

2,585

1,908

1,880

1,784

USA

3,788

3,570

159

154

159

Other Western Hemisphere

313

336

1. Certain contracts are classified as held for trading purposes and reported net rather than gross with effect from Q3 2005. The effect in Q1 2006 is a reduction in Total Oil products sales of approximately 890 thousand b/d and a reduction in crude oil sales of approximately 1,720 thousand b/d and in Q2 2006 840 thousand b/d and 1,940 thousand b/d respectively.

2. Excluding volumes sold by equity accounted investments, chemical feedstock trading and by-products.

Capital investment

QUARTERS

$ million

SIX MONTHS

Q2

Q1

Q2

2006

2006

2005

2006

2005

Capital expenditure:

Exploration & Production:

5,095

2,500

2,204

World outside USA

7,595

4,086

481

312

227

USA

793

457

___________

___________

___________

___________

___________

5,576

2,812

2,431

8,388

4,543

___________

___________

___________

___________

___________

Gas & Power:

252

392

460

World outside USA

644

790

1

1

1

USA

2

2

___________

___________

___________

___________

___________

253

393

461

646

792

___________

___________

___________

___________

___________

Oil Products:

Refining:

373

242

310

World outside USA

615

458

57

61

55

USA

118

97

___________

___________

___________

___________

___________

430

303

365

733

555

___________

___________

___________

___________

___________

Marketing:

314

189

250

World outside USA

503

383

26

18

34

USA

44

66

___________

___________

___________

___________

___________

340

207

284

547

449

___________

___________

___________

___________

___________

Chemicals:

63

36

47

World outside USA

99

70

47

50

70

USA

97

127

___________

___________

___________

___________

___________

110

86

117

196

197

___________

___________

___________

___________

___________

6

21

78

Other segments

27

134

___________

___________

___________

___________

___________

6,715

3,822

3,736

TOTAL CAPITAL EXPENDITURE

10,537

6,670

___________

___________

___________

___________

___________

Exploration expense:

139

114

121

World outside USA

253

213

64

63

35

USA

127

61

___________

___________

___________

___________

___________

203

177

156

380

274

___________

___________

___________

___________

___________

New equity in equity accounted investments

135

64

135

World outside USA

199

193

4

5

2

USA

9

3

___________

___________

___________

___________

___________

139

69

137

208

196

___________

___________

___________

___________

___________

38

162

106

New loans to equity accounted investments

200

235

___________

___________

___________

___________

___________

7,095

4,230

4,135

TOTAL CAPITAL INVESTMENT*

11,325

7,375

___________

___________

___________

___________

___________

*comprising

5,823

3,167

2,708

Exploration & Production

8,990

5,063

332

396

467

Gas & Power

728

803

799

518

656

Oil Products

1,317

1,010

118

128

191

Chemicals

246

329

23

21

113

Other segments

44

170

___________

___________

___________

 

___________

___________

7,095

4,230

4,135

 

11,325

7,375

___________

___________

___________

 

___________

___________

 

Notes

NOTE 1. Accounting policies and basis of presentation

The quarterly financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and the financial statements are also in accordance with IFRS as adopted by the European Union.

The Group's accounting policies are unchanged from those set out in Note 3 to the Consolidated Financial Statements of Royal Dutch Shell plc in the Annual Report and Form 20-F for the year ended December 31, 2005 on pages 110 to 113.

In the third quarter 2005 Royal Dutch Shell plc became the Parent Company of Royal Dutch Petroleum Company (Royal Dutch) and The ‘‘Shell’’ Transport and Trading Company, p.l.c. (Shell Transport) by acquiring all outstanding shares of Shell Transport and approximately 98.5% of the outstanding shares of Royal Dutch.

The comparative periods represent information for Royal Dutch Shell as if it acquired 100% of Royal Dutch and Shell Transport. For financial reporting purposes, the 1.5% minority holders in Royal Dutch were shown in the Royal Dutch Shell consolidated financial statements as a minority interest in Royal Dutch Shell from August 10, 2005, as prior to that time those holders had a right to participate in the Exchange Offer and receive Royal Dutch Shell shares.

The minority in Royal Dutch ceased to exist as of December 21, 2005 as a result of the merger of Royal Dutch and Shell Petroleum NV.

These financial statements give retroactive effect for all periods presented prior to the Unification Transaction, which has been accounted for using a carry-over basis of the historical costs of the assets and liabilities of Royal Dutch, Shell Transport and other companies comprising the Royal Dutch/Shell Group of Companies. The interest of the minority shareholders in Royal Dutch was accounted for using a carry-over basis of the historical costs of its consolidated assets and liabilities.

NOTE 2. Earnings on an estimated current cost of supplies (CCS) basis

To facilitate a better understanding of underlying business performance, the financial results are also analysed on an estimated current cost of supplies (CCS) basis as applied for the Oil Products and Chemicals segment earnings. Earnings on an estimated current cost of supplies basis provide useful information concerning the effect of changes in the cost of supplies on Royal Dutch Shell’s results of operations and is a measure to manage the performance of the Oil Products and Chemicals segments but is not a measure of financial performance under IFRS.

On this basis, Oil Products and Chemicals segment cost of sales of the volumes sold during the period is based on the cost of supplies during the same period after making allowance for the estimated tax effect, instead of use of the first-in, first-out (FIFO) method of inventory accounting. Earnings calculated on this basis do not represent an application of the last-in, first-out (LIFO) inventory basis and do not reflect any inventory draw down effects.

NOTE 3. Discontinued operations

Income/(loss) from discontinued operations, which comprises gains and losses on disposals and results of operations for the period, is provided in the statement of income in accordance with IFRS for separate major lines of business or geographical area of operations.

Earnings by industry segment relating to discontinued operations, included within the segment earnings on page 12, are as follows:

QUARTERS

$ million

SIX MONTHS

Q2

Q1

Q2

2006

2006

2005

2006

2005

-

-

-

Chemicals segment earnings

-

(214)

-

-

-

-

Income/(loss) from discontinued operations

-

(214)

Basic earnings per share for the second quarter 2006 for discontinued operations were nil.


NOTE 4. Return on average capital employed (ROACE)

ROACE on an income basis is the sum of the current and previous three quarters’ income attributable to shareholders plus interest, less tax and minority interest as a percentage of the average of Royal Dutch Shell’s share of closing capital employed and the opening capital employed a year earlier. The tax rate and the minority interest components are derived from calculations at the published segment level.

Components of the calculation ($ million):

 

Q2 2006

Q2 2005

Income attributable to shareholders (four quarters)

27,617

21,853

Royal Dutch Shell share of interest expense after tax

581

735

ROACE numerator

28,198

22,588

Royal Dutch Shell share of capital employed – opening

100,326

91,370

Royal Dutch Shell share of capital employed – closing

113,717

100,326

Royal Dutch Shell share of capital employed – average

107,022

95,848

 

 

 

ROACE

26.3%

23.6%

 

NOTE 5. Earnings by industry segment

Operating segment results are before deduction of minority interest and also exclude interest and other income of a non-operational nature, interest expense, non-trading currency exchange effects and tax on these items, which are included in the results of the Corporate segment. Operating segment results are after tax and include equity accounted investments. Segment results in accordance with International Accounting Standard 14 “Segment Reporting” will be disclosed in Royal Dutch Shell’s 2006 Annual Report and Form 20-F, with a reconciliation to the basis as presented here.

NOTE 6. Gearing

The Group aims to maintain an efficient balance sheet with an average gearing ratio over time of between 20% and 25%. The numerator and denominator in the gearing calculation used by the Group is calculated by adding to reported debt and equity certain off-balance sheet obligations such as operating lease commitments and unfunded retirement benefits which it believes to be in the nature of incremental debt, and deducting cash and cash equivalents held in excess of amounts required for operational purposes.

Components of the calculation ($ million):

 

30 Jun

30 Jun

 

2006

2005

Non current debt

8,472

7,905

Current debt

6,112

5,479

 

___________

___________

Total Debt

14,584

13,384

 

 

 

Add: Net present value of operating lease obligations (as per year end 2005)

9,442

6,283

Unfunded pension benefit obligations (as per year end 2005)

2,919

4,045

Less: Cash and cash equivalents in excess of operational requirements

9,874

9,620

 

___________

___________

Adjusted Debt

17,071

14,092

 

___________

___________

Total Equity

108,233

94,069

 

___________

___________

Total Capital

125,304

108,161

 

___________

___________

Gearing ratio (adjusted debt as a percentage of total capital)

13.6%

13.0%

 

 

 

 

NOTE 7. Equity

Total equity comprises equity attributable to shareholders of Royal Dutch Shell and to the minority interests. Other reserves comprises the capital redemption reserve, share premium reserve, merger reserve, share-based compensation reserve, cumulative currency translation differences, unrealised gains/(losses) on securities and unrealised gains/(losses) on cash flow hedges.

$ million

Ordinary
share
capital

Treasury shares

Other reserves

Retained earnings

Total

Minority interests

Total equity

At January 1, 2006

571

(3,809)

3,584

90,578

90,924

7,000

97,924

Income for the period

14,217

14,217

326

14,543

Income/(expense) recognised directly in equity

2,438

2,438

76

2,514

Capital contributions from minority shareholders

823

823

Dividends paid

(3,929)

(3,929)

(205)

(4,134)

Treasury shares: net sales/(purchases) and dividends received

226

226

226

Effect of Unification

154

154

154

Shares repurchased for cancellation

(15)

15

(4,010)

(4,010)

(4,010)

Share-based compensation

193

193

193

At June 30, 2006

556

(3,583)

6,384

96,856

100,213

8,020

108,233


$ million

Ordinary
share
capital

Treasury shares

Other reserves

Retained earnings

Total

Minority interests

Total equity

At January 1, 2005

584

(4,187)

9,688

80,781

86,866

5,313

92,179

Income for the period

11,911

11,911

356

12,267

Income/(expense) recognised directly in equity

(4,000)

(4,000)

38

(3,962)

Capital contributions from minority shareholders

-

638

638

Dividends paid

(6,785)

(6,785)

(105)

(6,890)

Treasury shares: net sales/(purchases) and dividends received

246

246

246

Shares repurchased for cancellation

(1)

(500)

(501)

(501)

Share-based compensation

92

92

92

At June 30, 2005

583

(3,941)

5,780

85,407

87,829

6,240

94,069

 

NOTE 8. Statement of cash flows

This statement reflects cash flows of Royal Dutch Shell and its subsidiaries as measured in their own currencies, which are translated into US dollars at average rates of exchange for the periods and therefore exclude currency translation differences except for those arising on cash and cash equivalents.

Cash from operating activities excluding net working capital movements, current taxation and taxation paid is calculated using the following line items from the cash flow statement:

QUARTERS

$ million

SIX MONTHS

Q2

Q1

Q2

2006

2006

2005

2006

2005

7,834

7,824

6,322

Cash flow from operating activities

15,658

15,002

4,763

5,015

5,086

Taxation

9,778

9,397

(3,276)

(1,979)

(1,918)

Decrease/(increase) in net working capital

(5,255)

(3,469)

(5,544)

(4,395)

(5,501)

Taxation paid

(9,939)

(8,688)

___________

___________

___________

___________

___________

11,891

9,183

8,655

21,074

17,762

___________

___________

___________

___________

___________

 

NOTE 9. Earnings per Royal Dutch Shell share

The total number of Royal Dutch Shell shares in issue at the end of the period was 6,581.0 million. Royal Dutch Shell reports earnings per share on a basic and on a diluted basis, based on the weighted average number of Royal Dutch Shell (combined A and B) shares outstanding. Shares held in respect of share options and other incentive compensation plans are excluded in determining basic earnings per share.

Basic earnings per share calculations are based on the following weighted average number of shares (millions):

Q2

Q1

Q2

Six Months

Six Months

2006

2006

2005

2006

2005

Royal Dutch Shell shares of €0.07

6,457.6

6,509.8

6,724.5

6,483.5

6,729.2

 

Diluted earnings per share calculations are based on the following weighted average number of shares (millions). This adjusts the basic number of shares for all share options currently in-the-money.

Q2

Q1

Q2

Six Months

Six Months

2006

2006

2005

2006

2005

Royal Dutch Shell shares of €0.07

6,483.1

6,535.3

6,744.1

6,508.6

6,747.7

Basic shares at the end of the following periods are (millions):

Q2

Q1

Q2

2006

2006

2005

Royal Dutch Shell shares of €0.07

6,414.0

6,485.4

6,726.7


One (1) American Depository Receipt (ADR) is equal to two (2) Royal Dutch Shell shares.

NOTE 10. Contingencies and litigation

The class actions and individual cases are at an early stage and subject to substantial uncertainties concerning the outcome of material factual and legal issues relating to the litigation. In addition, potential damages, if any, in a fully litigated securities class action would depend on the losses caused by the alleged wrongful conduct that would be demonstrated by individual class members in their purchases and sales of Royal Dutch and Shell Transport shares during the relevant class period. Based on the current status of the litigation, however, management of the Shell Group has established a $500 million provision in respect of this litigation. This amount reflects what Shell is prepared to pay to the plaintiffs to resolve this litigation. No settlement has been reached in the matter. Management of the Shell Group will review this determination as the litigation progresses.

 

 

Royal Dutch Shell plc

 

 

 

 

 

 

 

 

 

 

 

 

Second Quarter 2006 - Key Financial Data in dollars, euros and pounds sterling

 

 

 

 

 

 

 

 

 

Royal Dutch Shell plc publishes its financial statements in US dollars. Given below are some of the key items for the quarter translated

 

into euros and pounds sterling.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$ million

 

 

 

euro million

£ million

 

2006

2005

%

 

 

 

2006

2005

%

2006

2005

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

83.127

82.644

+1

 

Second quarter

 

66.069

65.652

+1

45.454

44.537

+2

 

159.091

154.800

 

Six months

 

126.446

122.973

86.991

83.422

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income attributable to shareholders

 

 

 

 

 

 

7.324

5.236

+40

 

Second quarter

 

5.821

4.159

+40

4.005

2.822

+42

 

14.217

11.911

 

Six months

 

11.300

9.462

7.774

6.419

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CCS Earnings

 

 

 

 

 

 

6.314

4.647

+36

 

Second quarter

 

5.018

3.692

+36

3.452

2.504

+38

 

12.402

10.102

 

Six months

 

9.857

8.025

6.781

5.444

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Equity

 

 

 

 

 

 

 

 

 

108.233

94.069

+15

 

Second quarter

 

85.125

77.917

+9

59.128

52.142

+13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Investment

 

 

 

 

 

 

 

 

 

7.095

4.135

+72

 

Second quarter

 

5.639

3.285

+72

3.880

2.228

+74

 

11.325

7.375

 

Six months

 

9.001

5.859

6.193

3.974

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income attributable to Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q2

Q1

Q2

 

 

 

 

Per Ordinary Share

 

2006

2006

2005

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ROYAL DUTCH SHELL PLC

$

1,13

1,06

0,78

 

 

 

 

 

 

 

 

 

euro

0,90

0,88

0,62

 

 

 

 

 

 

 

 

 

pence

62,02

60,43

41,97

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes:

 

 

 

 

 

 

 

1. The exchange rates used in the quarterly translation are the average rates, except in the case of total equity where the end

 

rate is used:

 

 

 

euro/$

£/$

 

 

 

 

 

 

2006

2005

2006

2005

 

 

 

 

Second quarter average rate

 

0,7948

0,7944

0,5468

0,5389

 

 

 

 

Second quarter end rate

 

0,7865

0,8283

0,5463

0,5543

 

 

 

 

 

 

 

 

 

2. CCS earnings is earnings on an estimated current cost of supplies basis.

 

 

 

 

3. Capital investment is capital expenditure, exploration expenses excluding the cost of carrying and retaining unproven properties and the costs of unsuccessful exploratory drilling, new investments in equity accounted investments and certain other investments.

 

4. Earnings per share calculations are explained in the notes to the Quarterly Results Announcement.

 

 

5. Previous periods are adjusted for discontinued operations.

 

 

 

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Royal Dutch Shell plc
(Registrant)

 

By: /s/ M.C.M. Brandjes

 

Name: M.C.M. Brandjes
Title: Company Secretary

 

 

Date: 27 July 2006