Shell (SHEL) 31 Jul 212021 Q2 Earnings call transcript

Company Profile

Participants

Ben Van Beurden	CEO
Jessica Uhl	CFO
Christyan Malek	JPMorgan
Biraj Borkhataria	Royal Bank of Canada
Jon Rigby	UBS
Michele Della Vigna	Goldman Sachs
Christopher Kuplent	Bank of America
Martijn Rats	Morgan Stanley
Lucas Herrmann	Exane BNP Paribas
Paul Cheng	Scotiabank
Irene Himona	Societe Generale
Roger Read	Wells Fargo
Lydia Rainforth	Barclays
Alastair Syme	Citi
Peter Low	Redburn

Call transcript

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Operator

Welcome to the Royal Dutch Shell 2021 Q2 Results Announcement Question-and-Answer Session. Today's session will be recorded. [Operator Instructions] I would now like to introduce Mr. Ben Van Beurden and Mrs. Jessica Uhl.

Ben Van Beurden

the session to quarter Shell's everyone, results. XXXX welcome, live on Q&A second Well,

is energy. of business. while for for a our performance net distributions and quarter's This result today becoming towards stepping how We're sector-leading future a positioned the up making recovery. shareholder progress portfolio emissions the invest well we we're economic continuing are energy to the X delivering of cash And and of strength our

X.XX USD USD per from are the rebasing be to We questions, we buybacks today, to dividends and answering XXXX, up second And and launching will really X share we're and XXXX. our QX for I look Jessica your them. half forward of of billion to

we everyone have each, have one. just to ask the X or has with please? opportunity could that, could so And X first So Cecilia, we the please question,

Operator

JPMorgan. will take Malek our first question Christyan from from We now

Christyan Malek

Jessica. So first questions, congratulations great may. on if a of Ben all, And I X and result,

First on cash CapEx.

spend to will frame flow How total macro in how split trends cash of return backdrop? responsive years within the it billion range? what billion? of CapEx $XX determine you the coming a with on would this And upside. regarding of about cash few respect spend and improving XX% effectively, between could range payout dividends stronger And with guided capital the towards the backdrop? of trend buybacks end sorry, the the year. macro to the frame company's the question, years so second be do of think your in And an XX% over again, potential how How terms $XX fast you to top medium-term So the over next around sort $XX billion, terms

Ben Van Beurden

much, Thanks Yes. Christyan. very

take one. me to cash will one. talk Jessica second the the Let CapEx

financial framework, messages of terms today I are very I clear. think think in the hopefully

we are quarters as we between dividend and at with billion that we be matter a even this the a also though generating billion, that felt We having but very the balance clear step-up. felt it, dividend is to always thought just the quarter, level the in having. that had enough we're very cash said do to dividend, We free a first but would would that flow cash the buybacks progressive relation ahead payout. flow not material all, performance that $XX It's well. we a towards was clearly dividend share more for at actually the to do we needed today, it in of the So we that the $X.X outlook confident

want We annually, this rebase in So also signal we strength that's dividend but the but reset level we to new by why business We're which this future. only it. not not in confidence of the the is it. resetting

last per So top looking laid variable a to much be cash Jessica, that pretty progressive CapEx? back is as dividend it on forward, buybacks of October framework a on we very much out with year. of going share believe component the have that in we story capital this the

Jessica Uhl

for the everyone. the and question. Ben, Christyan, afternoon, call. Thanks, for thanks, Thanks joining Good

this these CapEx. go don't our year. getting significant strategy terms that's forward. we of couple we level or billion quantum signaled ability going to CapEx signal -- look dollar look and We've in a but spent, both of terms more Again, this CapEx deliver also that mind. to In forward, $XX stewardship, each indicated cash progress to at capital -- above keep of our of things trend our from our discipline, in of terms expect going of made -- discipline the don't also to We at continue we've but in we to

of part the second our the expect couple of to moved transition, but of energy we've to in spend terms strategy, allocation to bit our framework, we've discipline. do like shown way, terms capital years CapEx last in of to the we'll fund in more will we in measured as a much fund a forward, Going it

disciplined We way to from will do as billion $XX it billion to in and $XX go $XX $XX billion to a the measured we frame frame. a billion

of see we're relatively think the second generating that we to significant So to the generation quarter, don't from responds quickly. conditions, terms future to macro get macro you and is from the cash also of macro course, as the step. in tied a us of But We'll in that looks bright the do particularly I improving And to our expect And cash. company operating top very the in, that in perspective it well the generation. business. range environment

look stage forward to to So that our XXXX. of framework in getting next CapEx

Ben Van Beurden

Okay. earnings. our Thanks, our Christyan, for generation acknowledging and cash

Operator

Bank Royal from of Canada. Borkhataria Biraj

Biraj Borkhataria

Two, please.

Slide intensity I the can on look this regions. is The you whether surface, that way first X I something reports a to comments XX, one is which as of is showing progress the Permian. the which sales. it then one selling your mean pressured to metrics, is you've be about wondering And or like refinery. And carbon on looking were doesn't your to divestments. make was to looking thing I'm was time you divest at clearly There been shows on refinery a question recently upstream on given core second good hitting your on it that do. second And potentially of highlighted some one any --

I to divesting and That's obviously supply you're So with sales my as you the you so is wanted some flexibility? we maintain I details that on. get that leave understanding the assets, typically buyer, risk don't agreements with may sign these the guess is trading asset something ask, many table. you on value just

don't the important economics just see. can we see And you terms is how because is on case? just transactions headline ultimately So We firstly, of that in any of there is something the generally provide that color the these values.

would So be color any there appreciated.

Ben Van Beurden

questions. Great Biraj. Thanks, Yes.

them take me both. Let

be was day good rumors one, seen rumors. the to quite didn’t actually on start I’ve short. changing can well. particularly On the I practice. don’t a that We as think comment And I first today

will So I’m have afraid live to that. with you

yes, terms last good refineries, progress made few In years. in of we’ve the

in chart, we see XX back started with XXXX. refineries You in the

X down now. We’re to

then refineries to We And just will chemical X. indeed, be not parks. will integrated will and these of energy go refineries, part they be

good Now indeed, I’ll these have easy. been is always we out selling making But selling very of refineries returns not refineries. be clear, very

integration them And divested large, and quite associated with right the by also these have have, sense often, value. then you’re course, in for refineries, value it. of that We

typically hold. out new But integration we we with also able lifting idea to with value operations, it it. integration these hold the our like the of often contracts want that Now often chemicals, hold sites quite or and quite of on quite supply because advantaged buyers into value the also trading having supply to to are are because contracts we

we where it often, a there. very deal win-win in said, So with to the have made buyers. of on the progress I quite able the value as hold while And we are that find sharing will part also arrangement the we pleased with to I’m

divestments – to of this reduction refining million X emission that look and we Now Scope reductions, mind, refining the and over component of expect terms Scope Most at biggest XX% in we done year, into in divestments account of is in emissions the XXXX, And our since the then have single our X come you chemicals. we from Scope X the in you company. have emissions, take if and indeed, in refining tonnes, X the bear emissions. XX in

happens contribution as significant a is very actually do footprint help. to we much, why reason well. it that just changing but Biraj. So not you the Thank That’s it,

Operator

from Jon UBS. Rigby

Jon Rigby

Congratulations on distribution. the to change

last signal think a performance the we've few I quarters. that's very around over seen important the

questions. think I X just

medium-term that I have back first The place I quarter, Because I I in if was said the But or to sensibly was like you I you've a to be question good asked conditions? is in last, asked for the very one LNG such It's a something the I'd there to to which gas, time. quarters I the it whether look the and which right come think market stopping integrated that really structural, net, slowed is so. what of might And that know think if gas stellar short- participating no. on performer is down integrated it a was of sort first business quarter X say, Trinidad. you about in was not a called where standout sort long think business. a in structural, I and seems headwind there out first Peru maybe

us. around sort like maybe optimization be medium-term fairly obviously, So low discussion performance please. visibility trading is and that the of or for things Because will some guidance helpful, business of

of I and that lubricants, still conditions. from is, second more where be would good is and the The expect which very Products normal of But think is return. obviously your I a business below other a point to aviation probably we includes in this them optimistic some activity, view, Oil maybe are generated noticed

there's some that. So upside obviously potential in

are you I So where second the wonder lubes about can aviation make think some the particularly you comments after and just whether businesses quarter.

Ben Van Beurden

about thanks mind products. the for and results. acknowledging Jon, IG? you I'll about Thanks, our talking talk strong would Jessica,

Jessica Uhl

Good.

With as when question. the for business a environment But things. So soft And we're noted, quarter had, quarter. Gas, and me out in. a relatively a considering thanks Integrated Jon, soft have we few price the that great you've let tease we've

-- shouldn't pretty XXXX we in kind these When did and were market extraordinary take had events able and Integrated of. some consider point of course advantage XXXX, that of quarters of normal external to Gas in First we 'XX all, was business happened, business. that I and quarters, pretty out extraordinary the those

higher that was there's XXXX average So good perhaps perhaps in a XXXX an to quarters it ground some unusually been can I people think be. bit that and should than

had and this quarter, year, specifically, have we in to softness. some second the Looking

issues that's long-term there's a look issues. the feature some importantly, really issue been main It that of structural combination you been well. has supply it's and If levels of our Those levels, for been the and as gas supply some that's And assets, quarter. second been a liquefaction at couple in LNG issues the factors. operational production aren't

We will supply. resolve gas

resolve some that some In be will may operational instances, issues. We will be months. instances, In that the weeks.

we what's going in fundamentals the privileged business terms business got the So we've a impacting the Overall, that we'll we in, as the in that of are privileged And relationships emerging believe have to in see the business. relationships But some second well. there's continue we course, new of portfolio. of opportunities this into of think terms have. demand we supply of this quarter

So we've risks. the of seen some

So keep as regas a from the the perspective in delivering we're our well opportunities and opening perspective. shipping like that I new from places that or in mind things markets LNG have China, like realize carbon-neutral of we to up a

underpin, will Integrated that important new strengths we think, also fundamentals we terms of Ben? there's growing business continue for So quite in good. Gas the are believe the overall, the milestones business long-term the and to

Ben Van Beurden

Yes. Thanks very Jessica. much,

side, think strong I been the very a quarter. OP it on has

QX think XXXX, best outstanding I retail, the best think was I quarter. which actually quarter quarter. it it’s And since is second the in an

indeed, the business environment. is marketing in this well doing So altogether,

entirely volumetrically, we Now not Jon. are there yet,

So first think, back about of are, levels. to prepandemic globally I we retail, on of all, XX%

to across a of variation different But again were. where we little bit regions. the So it’s approximating

retailing, look you nonfuel our ahead. is by the significantly If way, that at

I more behind. you’re in indeed, is XXX% also right, contribution. terms aviation think of And it’s like lagging

are lagging. were were even XXX%. period. lubricants also flights obviously volumetric something the levels I is though that’s believe probably of well like aviation business in I globally because of up, our much think back And what still to XX% terms performing do And is margin. were surprising prepandemic intercontinental Lubricants picking not pretty in aviation

a of happy business in potential the would management, because ultimately, good come in I we in how lagging, recovery marketing of quite the discovery at with time. I minds has responded. altogether, bit even good still value. also may come see well more So And of this though Very will new very as point think aviation scenes to say, little

So thanks very much, Jon.

Operator

Michele Della Sachs. Goldman with Vigna

Michele Della Vigna

had if may. X on questions, I strong Congratulations results. the I

was pretty of seems to which shutdowns the that industry experienced LNG unplanned in business. be to about specifically just effectively your goes digest and for or I trend you long a seem X.X through second maintenance. maintenance will shutdown, There it of for Shell The not asset whole backlog the of how the been we've to normal across industry reliability? broad back a fully reduced doesn't be first back think wondering, It to is is take as My question to you've unexpected, go perhaps years very unique. given one this just decarbonization.

You've very made to commitment decarbonization. some strong

on agreement very consistent the Dutch looking, GXX and Europe look for reach doesn't the to clear reflect if policy. to the But all this about think you that global of contrast make that global global commitments the aspiration, for demand it, about ultimately following different what European basis instance, which we You've do of signaled but and any of in about a terms an very seeing, week a with meeting we intention upgrade is makes instance, be could which aspiration ruling. basis. shifting your How those even risk is inability of for a strategically on sense what perfect And of a the last in outcome? between are understanding commitment global could you at Europe, form reality

Ben Van Beurden

Michele. question, Great Yes.

one first, take one me will the LNG again. second Jessica Let the and take

correct. observation your is think I So

our in that was up, will we in We industry. et cetera. it did we a what my exactly part have step of accelerate, when indeed, it, clearly very of That SDXX. And decarbonization to are upgrade, mind, course, in also we indeed, said leader comes

the of court indeed, following the in announcements examine the Progress accelerating. of else, is now came if any, we February, we strategy Our very a court ruling, And which, but statement can believe the what stepping up way, our to have strategy of ruling, and I by do. much after hearings Powering

clear. the And AGM is thing voted a in that pretty and challenge other waypoint we'll X go been minus very will and emissions basically very X February to didn't Now our document XXXX. introduces than one X on by ruling says clear. a And in by say step to. That's I've We the in at shareholders our to XXXX. up that much we a XX% say that court Scope

et it et studying it, take, and cetera, are We examining would what we whether cetera. do could

we can go to Now again, if to XX%, that the for is will, to we which, it's Maybe seen refining and course, different what's how cannot of that's up means." we than That go very we do obligation, shareholders is have when back making that the is society. progress faster that a best also reality. believe would if just already and stepping side. but You a true. that, are on clear significant society, and "This our it, challenge say, Scope is We X, inconvenient effort And matter.

So say we as we we as here, go fast can.

if the yes, saying to if by delighted, to a package, are what customers question roughly XX% strategy half endorsed, we is Our I way, now your all XX%. point, And completely at, would the we the EU that which serving remains about in indeed. of that is managed is do But but is look our I with helping Fit that we decarbonize. for XX the in big package, sectors be doable, by it. the it way,

in the us how So ask jurisdiction world the a I half question, realistic aggressive of you only can, legitimately that. is for for yourself it reduction? can think, to XX% If the progressive, aim master most most

we economies appeal. But in way, by the Now sectors it when the it that's won't world. decarbonization we comes doesn't pushing Jessica? to the of reason, be also the mean that

Jessica Uhl

Michele, some at LNG play Great. are in of terms industry the of more what the dynamics broadly. in

disparate have many the been While of issues around assets a it’s within of Shell not industry, within assets, happening aware across issues certainly the been play. of pretty LNG And maintenance portfolio in issue Shell kind and it I’m maintenance. backlog the thematic family being there at

that right there’s that assets. and a the therefore, hadn’t the pretty to these of attention. there’s play been was maintenance been careful of gotten it. Not theme pandemic our So We’ve that at gets very all. asset level And implications issues maintenance distinct are and not integrity there with at ensure the activities to, through

think don’t a so So backlog I issue much. it’s

to maintenance these a at said, resolve issues causing supply not before, coming there’s I portfolio And a piece I necessarily supply outcomes. It’s it. to will parties. it. third That As gas weeks. some of There’s gas play think piece is of indicated these some in from that’s as I Shell the

take will some them of Some months.

this And year. portfolio. believe the just of our But again, the will issues these strong. fundamentals So going very continue I would structural I for I impact LNG as second some that half the we don’t business into emphasize of the of certainly to expect see once are

volumes achieved the half of XXXX, was first at at you the realized than prepandemic XX% If some the in industry look levels. or we’ve has it higher it’s

So from NBS perspective, changing that’s a opportunities demand in for I other think it LNG gas whether of a there’s be solid mentioned, coal the means. out I good as I And indication us, or think for more decarbonizing LNG. through the and for power sector shipping many

opportunities create I for will think forward. us more creation still that of lot value opportunity there’s a going

Operator

of Bank from Kuplent Christopher America.

Christopher Kuplent

This from will things your accelerate longer have hydrogen, much And just things, you tell XX% know LNG, you, to how XX% this 'XX, will are take in good you sure efforts. that for point decarbonization to you've me, of court disposals. disposals obviously refining capture, reduction, on To more you lot all said reduction at much appeal you the a X the us, I your is quite trying not wondered made. we but without your can terms I you've whether plan familiar that net how 'XX possible mentioned decision. a from I'm sound to And all et even to to than they, cetera, wonder Jessica, that comes about carbon of

the that wanted as ask discussion. to the just immediate perhaps reset I wonder question, what link dividend about means how lastly, into I back then So could come And and that Also your you decarbonization. budget accelerating view again. you reality, you to if second a

let who happy feel why much against, came benchmark bit a how very more one-off? you that and detail with know a are you not $X.XX, you You it $X.XX. with you this And $X.XX, can little $X.XX, not in up calling a Is us reset. perhaps

Ben Van Beurden

first time. in the What's a this take Jessica Yes. talk you Thank number. I'll much. very about one. the dividend will

let's on very the clear and I just be acceleration think disposals piece. the

we Scope That to be tonnes X of refineries, CCS, let million out X our very of talk minus that, address actually about a some will improvement, XX of total all you we X.X But of spend gigatonnes. closures, disposals. combination million of us rightsizing, a it about electrification, emissions. efficiency you towards, plus XX So and through require grade And amount that if capital wanted of tonnes, That's shall a going can small say, of amount ultimately were facilities will we to a to it that and and that will X. these modest on drive is XX% in emissions, anyway. disposals high

Scope customers, If emission you obviously [indiscernible] which we why is a the don't X And reductions, that's, strategy. not thing yes, again, The dispose work, can only meaningful talk of about disposals are accelerating you assets. appealing. is

addressing to yes, disposal Scope be, it the X always That's and emissions, it When I as So our their role comes X once product understood like clarification hence, actually is Scope would more portfolio here. therefore, it and well Jessica? not have changing X. your models. changing to in as business

Jessica Uhl

terms in and how of that’s so we Shell. number Christian, Great. the landed for right on $X.XX why

internal XX deal our actual example over in stressful all, pretty a the to of the of some at set to last company XX circumstances. performance which months, of we to was looked capacity and and extent, external, First a ability the of great

financial and strong robust macro? people, and How We the of the the a So company, cash feel and resilient I that in all We XX-, then next outlook. on of all upside, outcomes, the returns what couple we And the it at terms for of for when in look perspective investment We’ve XX-plus prices again, the particularly the dividend considering outcomes. the very the the ensure volatile of level a but our the time of stressed low the about last recovery the very But the always to probably very feeling framework months? the think performance we’re does assets, right of seeing particularly we’re downside, a consider some do spend in bit what’s about set providing consider been good think from of a we do levels so we’re we’ll very for considered it’s do stress compelling case the how more resilience What the over is generation, our we We about variety how business course, of and years, the company. through shareholders. fundamentals margins. seen the business. financial level we And looked different like pace circumstances. tested we’ve at extent. of X-, XX-,

You price increase share has overall we dividends we X.X $X.X billion And the by the of gives number, very our in which share to together, keep capital us retain that – another to count. flexibility opportunity us on progressive course, And course, share this $X.XX for all compelling of to a And to opportunity framework, dividend, dividend landed which quantum. our buybacks. do allocation is bring at of total continue X% which us and level, for reduce per we share year-on-year. case the

shareholder us. that for therefore, we so is the and to a buybacks distributions number billion balance, That’s remains think And important resilient further give a on shareholders. increase us meaningful compelling, forward. share going for importantly, our flexibility for priority us. And will more $X.X And

Operator

Stanley. Morgan from Rats Martijn

Martijn Rats

side, congratulations Also this announcements. my with from of set

have extremely I I welcoming. questions. two think it's

on of many BOE that to these talk oil, is important First part actually of down such of it's quite And is all, business. we so in of specifically oil other the something the things, a even but I production, still many but last oil, days, specifically that know your is notable an about year. XQ still peers. not visible is also basis, relative this And

could an all more are, they to industry being of actually you may of supply back start CapEx easy. bringing sort be be levels anything of whether trend sort non-OPEC to else. rather with not kind seems than wonder So And these there so of where

Cosan-driven? a on mostly And announced Is you think you're give process could I the you if oil ask why ongoing. to CapEx, things you of Shell-driven? thoughts of on level production actually selling seeing about it sort you types likely transaction while of us for one mostly in thoughts assets was is -- level give course. is versus why How perhaps Could of us sort particular wondering that of in place this this you're sort us is ago. sort shares energy-type the of Raizen, that put do your of you sort Shell to outside of Now that thoughts it in I certain the X will is you but is of on space. I your seeing little fall this you your of recovery template place. wanted business, I together, be in that what sort with IPO what could peers, lead of Could And direction, this? these when specifically a was wondering take Or new your how want own a And your production is which if -- the OPEC, second sort of of of I taking the give was think the transaction? don't other

Ben Van Beurden

the high-quality if Martijn. is indeed time Great, the we still on Even in need you decline next come. Yes, fund the still significantly indeed portfolio important. need believe I We've one, long have the the the X% all, report, oil oil, and see Thanks. we it of new will a oil lot and first Yes. IEA been on for want do decades The that a the company. we questions. to Good sort does portfolio Jessica for a last that will to gas clear, to world will decade. of think, a wanted very invest oil Raizen. very over to side it cash to I'll to generates XXs next into But well production. X% be very high-enough quality of

So shrinking have And X. But also last number that not non-OPEC of that's of a exactly peers portfolio. you're will it our few many years, indeed, be the in course, right over in space. that, the point invested sense mildly

on even by strong way, indeed that So could argue, bring demand the are that it capacity yourself there. work or to time, back even the all you volumes ask the question grows oil some out has stays if maybe going is to the You could how for to going OPEC be but needed indeed balances?

the Now going to speculate on what to I'm oil price. not will happen

surprised hazardous. markets, are for if tightness help think a to oil to see fund going we quarters few which, that's I come, our strategy is would be us I wouldn't in Jessica? going well, better. too But relative to I even imagine

Jessica Uhl

Good.

circumstances makes this this very steadily Raizen. a I the business. market in a over last if you There'll terms of portfolio years. of of template. of And it's of the been way that with for to important access that see us. set Cosan equity. our quite terms in a to necessarily sector. the it some that and be the downstream, company of distinct you capital participation wouldn't incredibly that part performance change choice exposure. will, further our our course, do of most the is growth of players the terms of be it of it's an given terms our the for the another Raizen, was for right couple gone which in way So and with of support encouraged makes Brazilian as company. of referenced, accessing the one it's we're capital participation terms strategy It Raizen, aligned again, in our us well very in I'd it's performance a our us, growing us Because of biofuels. significant solid And partnership a and accessing of in for we're in participate IPO, with in very for say pretty pleased of But equity minor It business. as will partners with to

Operator

Exane. Herrmann Lucas from

Lucas Herrmann

some confirm. the from start see one, of questions, follow-on, I just the being taken value the to time. asset And any My up last taking you talk actually, business to questions of if but if could nice today. Are markets a in about all It's out? just But at I presumption wonder your might. could I at with capital Couple Raizen. present if not, themselves, you Jessica, is

is a lot activities of just you're happening the Just usual where the at to project that more talk and little present pipeline pipeline timings Pennsylvania? How you looking bit chemicals? about of as have in on you what new question, divest developments, clearly the can core. -- a generally, What's You time. Vito down And the slim to developing? are

Ben Van Beurden

I to a double, -- a let if Lucas. few supplement correct and going If be Thank Jessica so you, be. things probably let -- will me this -- me is me I need think me. say

no, not This take planning joint out bio So invest also in of projects, continuing to Raizen. basically to is to tremendous venture funding has second-generation continue a but grow. we're opportunities to that capital

significant that adding see will And venture. means we Raizen ways very have have true seen done business. You that also and to upgrade capacity we continue a acquisition, XX% to to

deal the it a appreciate slippage pandemic mentioned, have a will of very there I'm in course, very, asset this raise have projects able that have able a for period. pleased of Jessica And to little capital in in point at the we that sandbag values we been -- basically with milestone been is pandemic. I'll do are with So a this a terms you in means and you talk that time. that But But the of to the projects, for how has bit a about great it's is to that. moment. actually

people a there we site. way. been also capacity simply difficult and yard So to yard. Singapore, crews, way, can significant you mass almost which able which slowdown. be deal by would to But back, outbreak, as very now enough few And in we haven't having period because in imagine a have constructed are you near to county the And had, being very with the relatively after Pennsylvania, that complement months to doing is to the construction a we well, is X,XXX careful we can have full bring a in a actually imagine, again, the do the not short reducing maybe is time, in pace quickly picking in up on a which of on Vito, few in quite very dozen

projects. project for So onshore think LNG construction Canada. from Kitimat tremendous is the our Same again, run I teams true to for resilience in these

actually the you a best to pleased our there. the the There's perhaps fact did incredibly have best pandemic, is you I'm few team. on questions So IR if And pipeline have to resilience details I specific projects, them, think, that impact I in Lucas, shown. all to the we posted. together, quite if the seen we have The slide miss? have that indeed Jessica, despite that of what talk I'm pack good from with -- teams an refer I probably

Jessica Uhl

That with we was as good. I believe the Pennsylvania, electrons our first there. power plant starting up had

site, really just moving that the are things think the forward at described. Ben well I So particularly backdrop COVID given

We on that be assets of the of been true M&A in traction until number expected. market, we got few half advanced. In of year. had more in Upstream we're in that's the of a healthier seeing we wouldn't well in I'd have funnel we our our divestments Downstream get that's -- working proven we've come say expecting. some And through. terms very year, that hopefully, And it's to healthy as that second the were assets potential we 'XX. as terms than can that 'XX, There really in Those a this the was assets. that And you're of land

comes economy So the perspective. it think, M&A I around I'd and responding when in to say people pretty are the bullish feeling are to, uptick an the sector

pleased with our very So delivery there.

Ben Van Beurden

of Very replicant will an bear that in just you. to in the we of be which Gulf Thank on course, – about Yes. but another of Mexico, important Whale, also just sanctioned And mind Vito. project, very XX% Project Vito, talked good. you

we are So will well. that you again, very as of advantage still see thanks, Lucas. Anyway, much opportunities taking these

Operator

Cheng Paul Scotiabank. from

Paul Cheng

to for you -- for Maybe given I And mean, You there, just Two potentially LNG LNG can the that questions, continued still the situation environment that, in about the first onshore -- any or looking impacted? you that's in Ben, the had be that also, asset of the part the to why that be the as opinion, if operation that. still for your of political you? And part core that on considered if Nigeria sales that's mentioned core. change is in guys if going progress gas the should think not operation that the deteriorating, case, is the on that have side operation, But you're the see or please. really, the question. as there's Nigeria? curious you the talk So deterioration

I new that's will question at Or be new that that mean think investing even place given you still model, in? that? country. new been the looking the second back U.S. your and with deal, past, like But in opportunity care If a Shell in go for Iran, a Iran The business deal attractive to care related an new we're how to model has a I between is Iran.

Ben Van Beurden

morning Thank you. you very to Paul, and much, good

Iran about I But close I'm Nigeria, think few very also a I let say the take which definitely very, question. things me have to to.

around on an participate indeed in, we opening reasons. us cautious to very political So Iran, obvious in were did time discussions, was opportunities when last there even and for for were but there go we

think would only different different, time it investment have of not around, strategies. be any we I also not but course, this

are So of than probably onshore this there outside is is say, too completely myself really very actively On in is let us lower because I risk stage been course, But going nothing of Nigeria, appetite. whatsoever much our get actually, not oil, think clear. the at were game, chances ahead development, oil on. completely before. pursuing Nigeria the they of me of we've Iran

that that to situation We basically the turn are incredibly have an concluded I trying with happening have quite is security we is and the delta, no way there. able in difficult banditry or we from to ourselves around insulate that to been, there think, heroically deal

now progressing are discussions the indeed, Nigeria. So with government federal the of

will We our to very through oil It's Petroleum, the behind. be all certain of to positive onshore executed stakeholders. We're other been out progress. get that need other NNPC this State That onshore. not or that of a way but GMD as fact, ways looking we of already just with with the asset in talking only for of plans not are that legacy also able necessarily Minister soon, a at firmly well are have sales. And with of matter and leaves extensively quite sorts as a

also in altogether. that's steal well a Bonny ball in run. LNG, very Bonny actually, difficult whole the whole delta. Island compared on And indeed the stealing delta. on game lot is of to LNG Now very And a Nigeria Island. It's security different situation course, there that, if it you is to oasis, call can oil. LNG it's more a stable the is

is, And haven't actually had any we when very our to course, issues it a Nigeria it So the performance. contributor significant comes of financial to good LNG.

Operator

Generale. Irene Societe Himona from

Irene Himona

how in Do wonder for seeing that congratulations provision the to that a the My -- the are you're example, and costs you sequentially, is business. price unit margins QX, have, exclude procurement seems investor higher if reversal, can cost talk long-term side for we XX% for relates you wonder for substantially evolution inflation. Upstream your lot distribution. And And if price. decision your XX% In around very commodities And unit you in we that I out we rose your on that a other increases cost insulate metals, protecting potential questions it on. of on about so from inflation. a if you profit question Upstream. Obviously, in leave period? very, I the oil are seeing contracts the

Ben Van Beurden

Yes. Thanks, Irene.

be make then doubt on me then to to it first a will add and the also question. the Jessica take beginning question, no second able Let and

So that we something indeed, carefully. very cost inflation watch is

cost We to have course, need be mindful of been can out. very good that But taking also back. come very at we it

quite inflation. modest you're the course, very so can of lock long-term in more seeing and advantage strategic is But maybe are you a place. where before. the And profound little most with suppliers, most areas is steel, our we significant in our advantages is procurement the contracts, significantly. base the much Jessica? categories, in steel with taking bit therefore, but far, also I from in imagine, perhaps course, activities to think recovery seen But is are a on many if getting main, modest And so And inflation quite challenging, of spend. of drop, on effect in being are actually logistics. of inflation that, we able a cost actually the of actually you've right, contracts logistics, seeing of course, we

Jessica Uhl

cost on happening well the in Ben, I think, supply the covered that perspective in of terms what’s chain.

a seeing, Upstream a you’re things of number of been it. improvement margin for terms are part that our and that In business, strategy that’s of and the core driving

is portfolio. our piece first The

that – We volume. in seeing over reshaped a that that portfolio have actively benefits to of lot the the shift managed settled about action. on think value we couple of We strategy and you’re be the years. And talked in last and I portfolio focused

the as a more improves. we that and importantly, for lot So have access the are available barrels, macro high-margin upside to barrels

upside. piece first is barrels that portfolio high-margin to a the access have we us done have gives what perspective So from that

course, The very coming year. terms efficiencies, business, piece seems from of to ambition that who’s his the grow focused That’s excellence, second cost margin and seeing. on Wael, a is you’re perspective, the through story, another in cost side each driving the running and which most and is Upstream the of that’s of that our equation. And also availability contributing from getting the operational assets. and pushing to piece of

X seeing that are I that’s of the pulled margin levers think the being and moment, what’s driving all those at improved year-on-year. you’re

Operator

Fargo. Roger Read Wells from

Roger Read

know we stream oil in been really I production the production a Just look to triggered What of significant congratulations that. debt, go all and repurchase, gas quickly your rate curtailments of if billion the is is, consistent X share and that have to declines reached long-term questions that on, at and what $XX in company I'd much pandemic net but the and overall here. want forecast. should first we're fairly you've higher the going and about what fairly is the of I question. than at thing, One second know around a Upstream going and you little front. at do it's one, there bit, mean looking sort be but the think sheet the That'd kind And my a with I it's been want we danced forward? and then basically, balance on to what all

So was on going the years, else the beginning sales relative at back, couple I'm think, the not next that over CapEx call. behind much of curtailment that the curtailment It's to comes we of just asked, scenes? asset the curious, look is as but pretty what some or I just of

Ben Van Beurden

more little much, on bit question Thanks what doing next? the Jessica, Yes. very good I'll production take you to talk first balance why morning a you. the about and in the sheet, sector. Roger, don't also we're

Jessica Uhl

Roger. morning, Good Okay.

and pleased we've reached -- very very not strong, by very milestone spoken improving reflecting very through macro second indeed, billion the performance and macro coming strong as to a quarter, that that strong $XX So we the earlier.

flow net function terms a and metrics. in generation. of some billion going In sheet expect the $X manage even very credit in that to us years. to to is within $X we'll But would billion by practice the is to AA course, sheet. overall committed we're of the reduce look forward, improving coming debt strong balance debt trajectory in to in net means net this company of What equivalent What terms and the much to a debt continue macro of I further balance cash environment, is

AA balance sheet, need we the and strengthen So go to these metrics. will things in hand. overriding look credit hand we the But company to to the within run message will is continue

Ben Van Beurden

very production Yes. talk And of company, been own clear. about we’ve all, our first if I, on piece, the

a not business level will that basis. just on We a this invest anymore at headline sustains

disclosures is. when keep $XX Upstream our it today, billion. So to said where back we spending you need go $X XXXX, would we billion in we’re And to

is accept We are in gas X% certain oil. that We means of inexorably oil. in to said decline spend into X% a going we bit but that clearly, of going a a decline. high-grade grow year to our it the decline the degree to and percentage per So mix, little

is core we that focused on spend And deepwater. the Now much core X $X the X positions, the very much on have, the billion, positions. focused it’s very within

our goes pretty to how we goes going And forward. to run XX% to XX% much business spend of that’s So intend core, deepwater. this

believe the facing I maybe that But companies. other about sector talk are can’t of do certain to the and because of I we companies uncertainties of have. some weaknesses degree hesitancy some a that the Now indeed, that currently invest oil in is there

other areas, some same. companies have decided also deploy our other preferentially to the done have we and Now in capital

indeed, to investing are. altogether, somewhat where levels it whole the is sector So make the to that what the is needed below they not is keep production unreasonable case to

invest again, IEA we’ll in energy. with see that how indeed, we the plays that collectively to companies and let’s have And collectively collectively Now up – out. clear The to the supplied that. world been very for do very keep sector to well doing continue has Roger. in are sector see the Thanks, order indeed whether

Operator

Barclays. from Rainforth Lydia

Lydia Rainforth

can level you of performance where the And very the questions, to dividends might you the well first reality it bad I is Two seems in that explanation good then business past, I it in in energy with and or ordinance talked of to the transition there. be? of of is idea second the that And better. get a here, macro is underlying the similar me, of if Shell XX% we particular what good and bad costs, costs, support. come happier you the it very, [indiscernible] kind the times reset much is the about thought the right you're the I CapEx. business as performance to than And do were could. just this is, of the can And back of now better XXXX And both. part the where that the number mean afraid, the one, about part positioned this terms CapEx, to and wonderful I'm is, is the April idea

at how talk investment. investment you're you're about it looking You how terms increase of some returns of pace in those? shareholder just that can and interpreting of the those bit do about you'll Can you and thinking more be decisions little a

Ben Van Beurden

Thanks very much, Lydia.

see Well, first said performance. one. that of think with that there now start see will will recovery we you than if expected. you improves, just a Jessica we through. indeed talk was strong second correlations, do make had. about the I the we've that clear course, Well, playing question always the the me And upside is a will if that very indeed been always a you macro comment, the Let better happier we'll be with

I pleased probably actually the the significant what with be is most company. think of resilience is part the to

you from from ourselves of potentially, turn and have you you ask And work home. yourself a our from for XX-plus-percent where Of that? in everybody down home, Yes, plans offices. and now our question, the so And indeed, supply you see contingency office do mind, the a inside we sudden all And through including to have places where we how it? you if much go will the you a like staff for terms can then and and we if we have of our quality working have do and all of grateful in everything out look I chains, have where only your operations. be have pandemic people to back through very in course, on proud quality our Bangalore how in the people managed incredibly so, of an bear Manila of back Chennai upside of disruption sudden

choices all I we robust have And sustainable. on to that's me resilient back, that, and also that But way. outside hands. yes, put the it, fact The is sense, very for made are of the and news of us us. it it that come think, in I'm -- course, distributions a with is positive think let Well, it Jessica? confidence So that is our surprise? good is macro happy the that gives

Jessica Uhl

thanks the Lydia, question. for Good.

company we that taken flows and certainly that of with how allocation. pandemic In framework increasing world going terms a terms of our of cash our phase to was and different how the first now the distributions. what of are cash about clear capital forward as that are and intentions of to grow, the terms in our we to a as want tried CapEx today in moving run provide we thinking We come shareholder improves we’ve out which we’re step

cash then we’ve the distributions. third which priority, increasing of priority, gets billion, achieved. CapEx shareholder strengthening $XX CapEx base sheet. and dividends was framework And That further us to the reaching which balance the the then additional is fourth So cash and

allocation to getting of We’re priority be company to to But to at currently need to that the today about our step and going And move fourth able point return important and in as the phase. priority a $XX shareholders, how at make hopefully, we – an forward we’re group for billion that XXXX the our is that that cash go XXXX. into the that. we’re continues this we’re $XX only we’ll providing to is sure keep which, that compelling need perform level. third billion and thinking if fourth phase We to today macro delivering, to with it optimize fourth was CapEx rather keeps in we capital as time, on

to maintain let’s we need move sure make serve That’s want of put priority. in to distributions shareholder next phase a time. we all shareholder we versus, the And third The balance When do to line is ensure second got to distributions. to cash say, that piece through sheet. priorities to we is And we’ve CapEx, we and grow. of strong piece fourth third priority the the with the those why

a importantly, disciplined, that we I step-up that of relationship in approach next measured between CapEx. so things. a those would that maintain cash X above And see is But ensuring

pickup in before that indication we’re thinking. of provide the very I in we guidance at this us the demonstrate We’ll But in second that at expect time. needs grow be to billion some next the indicated billion. what a we we’ll wouldn’t XXXX. But that’s have way, want of that [indiscernible] It’s of we us would invest to our to CapEx. step-up be it But see in so that continue and it company, an are cash range to what through terms investments point $XX next transition, from the is the each in and terms measured. returns we important between step-up high support be this year. somewhere XXXX indicate $XX that driving of of more end in necessarily the I phase in for The of And energy in expect would to for important half disciplined

Operator

Citi. Syme Alastair from

Alastair Syme

to It is very last much question. follow-up the a

that dollar had And that business? that so specific go per you just we of business would into? the there happen to incremental as priority clarify, for, capital a an allocation even is area if across does Where

Ben Van Beurden

Yes. Thanks very much, Alastair.

Let me that question. take

it’s we the I necessarily have work a where for the incremental So present in highest and necessarily way of our Ultimately, finding not it and company doesn’t the by themselves do not size decisions think dollar, there that’s return. makeup. always

So what solutions the priorities we particular a are allocations it of or “This level, whether appetite course, on doing company, we lay the Gas, This And of we clearly, our allocate the are hydrogen, These the portfolio. business, where of capital shareholder what the is. idea risk out when cetera. the achieve we below to sectors business CCS, and Products that’s these balance of have renewables energy and amount et we we where of certain is basically is the is is This the biofuels, X, CapEx sheet have. aim what that Chemicals in set Integrated level opportunity whether Upstream, And is to are. an we call now is.” of what objectives so we cash other very our and sort strategic company say,

$XX what is we breakdown, have we say it if about think don’t What pursue. the the will find money $XX point will we will back we our on And in of of will time. to So And CapEx that to we’re the been capital opportunities, is where basis very go mix we the are. the that to the said a of is expectations have billion the that clear it’s when go return we have give invest we of we pillar same have and already breakdown you businesses strategy the also what But morning. allocation cash saying what next we clearly, we a that billion the into published want the can up don’t allocate slides to we X level those made of this decide to on in business. at to as growth this phase, you February. And preponderance very

of this we other going. Alastair. and dollar go Thanks, So words, where end to energy customer is believe just there. would say the future But in in the premature will the at time, next point be it

Operator

Redburn. Peter Low from

Peter Low

outlook. macro the on another Just

restrictions? but on we from confidence? currently the that's you're there color expect helpful. half. to $XX Is markets perhaps you of billion simply very that? what's billion range. would what presuming that for $XX projects be new in just welcome, what And below You bottom cash the is tone result which a a it's a step-up investments of quite following COVID it ago. then found this And change the of annualizing end struck positive a a And led big in the phasing? end to given seeing the in drives is should your Any second CapEx change it perhaps Is year work today, particular and outline on this year, you Can that

Ben Van Beurden

one Thanks don't you Yes. much, the with positive end second talk very I to will Peter. and a why Jessica, tone.

Jessica Uhl

Excellent.

the a you've for et unusual bit supply Peter, staff are at think, in cetera. through back on Indeed, of lighter points we're getting touched -- That's half. And particularly relevant. of post-COVID, first a working you terms that working they're a still pickup have us I mentioned, still in So that the bit not as the second chains, half, little CapEx. we sites,

and drive half the we're continuing the That efficiency said, we are step-up being And some so getting capital spend. of And will that to the So about the also driver of dollar, It's that in timing. year. a up second more second for each is this would that's year. half expect we but pace more the year. in and the pick Ben? much again, not impacting of

Ben Van Beurden

of Yes. significantly at Last Thanks. we that at were end a were the the this question And what the it pandemic. we year, between at we Peter, pandemic. this of I of year, in what what's year, resilience looking had on last we difference last be was And year, when to going of we we and beginning And year could at feels the our your are and well, what really felt did. being ahead time the some happen time was -- was us, financial risk, it pandemic. knowing could take a decisions, to therefore, think bold that that prudence. And knew at we ahead

in significantly. of took a it outgoings A we of indeed, That of operating that $XX capital, We And in it costs. very working out lot distributions. terms was in first $XX our So the capital of also shareholder then in unfortunately, contained period. billion billion. lot very,

result Now only improve what the resilience we we financial not company, actually a as could could of of the seen it. happened preserve that it have we is

pretty QX are resiliency looking markets. working resurgence I et would results as confidence very The also Incredibly much and that since our at our a you very think, incredibly measures sort chemicals, what the has we therefore, And perspective, by the very, our vaccinations chains I have needed well working well seen decisions from have of only asset in absorbing these in now macro. but incredibly the $XX is is, not cetera. basically with through debt the that performed. time, grounded it's supply prudent how tremendous At we we've well our it. well well. a We reason in like a how time, But optimism. positive we down And back also same perspective, will people a from profitable a today, you and company the whether the that And seen oil see of a positive at see of how or the shows have. perspective, way, by were. billion. paid in And outlook that, that to future there volumes, very year, And for or same capital. last of So close today experience many are significant from amount gas

So last about thank our your have attending. about, What into you come et on quarter the how again insights in shareholder do you we're performance some cetera, such. all the you I distributions, the of getting so, the for given about or how questions. hope strategy. hour Thanks as but And that also for we they of

to Thank pleasant and best stay you for wish what’s week. your stay you do and you hope very me very I well. much. a And So the end is families of to safe

Operator

the concludes your this for session. And Thank participation. you

the may leave You now call.

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