- Royal Dutch Shell's (NYSE:RDS.A)(NYSE:RDS.B) second
quarter 2015 earnings, on a current cost of supplies (CCS) basis
(see Note [2]), were $3.4 billion
compared with $5.1 billion for the
same quarter a year ago.
- Compared with the second quarter 2014, CCS earnings excluding
identified items benefited from strong Downstream results
reflecting steps taken by the company to improve financial
performance and higher realised refining margins. In Upstream,
earnings were impacted by the significant decline in oil and gas
prices and decreased production volumes, partly offset by lower
costs and depreciation.
- Basic CCS earnings per share excluding identified items
decreased by 37% versus the same quarter last year.
- Total dividends distributed to Royal Dutch Shell plc
shareholders in the quarter were $3.0
billion, of which $0.7 billion
were settled under the Scrip Dividend Programme. No shares were
bought back during the second quarter.
- Gearing at the end of the second quarter 2015 was 12.7%.
During the quarter, the Malaysia LNG Dua Joint Venture Agreement
("JVA") expired and Shell transferred its 15% shareholding to
Petronas, in accordance with the original JVA terms.
In July, the Browse Joint Venture agreed to enter the front end
engineering and design ("FEED") phase for the proposed non-operated
Browse Floating Liquefied Natural Gas (FLNG) development (Shell
interest 27%), using Shell FLNG technology. The proposed
development is expected to deliver around 12 million tonnes per
annum of LNG.
In July, Shell announced the final investment decision ("FID")
to advance the Appomattox deep-water development (Shell interest
79%) in the United States. The
Appomattox platform will be Shell's seventh 4-column host in the
Gulf of Mexico. The Appomattox
development will initially produce from the Appomattox and
Vicksburg fields, with average peak production estimated to reach
approximately 175 thousand barrels of oil equivalent per day
(boe/d).
In July, Shell Midstream Partners, L.P. completed the
acquisition of a 36% equity interest in Poseidon Oil Pipeline
Company for $350 million from Equilon
Enterprises LLC, a subsidiary of Shell Oil Products US.
Basic CCS earnings per share decreased by 35% versus the same
quarter a year ago.
Basic CCS earnings per share excluding identified items
decreased by 37% versus the same quarter a year ago.
Total dividends distributed to Royal Dutch Shell plc
shareholders in the second quarter 2015 were $3.0 billion, of which $0.7 billion were settled by issuing some 23.4
million A shares under the Scrip Dividend Programme for the first
quarter 2015 dividend.
Return on average capital employed on a reported income basis
(see Note [C]) was 6.3% at the end of the second quarter 2015
versus 7.9% at the end of the second quarter 2014.
Gearing (see Note [D]) was 12.7% at the end of the second
quarter 2015 versus 13.4% at the end of the second quarter
2014.
Oil and gas production for the second quarter 2015 was 2,731
thousand boe/d, 11% lower than for the second quarter 2014.
Excluding the impact of divestments, curtailment and underground
storage reinjection at NAM in the
Netherlands, PSC price effects, and security impacts in
Nigeria, second quarter 2015
production was 3% lower than for the same period last year.
Equity sales of LNG of 5.46 million tonnes for the second
quarter 2015 were 9% lower than for the same quarter a year
ago.
Oil products sales volumes for the second quarter 2015 were 1%
higher than for the second quarter 2014. Chemicals sales volumes
for the second quarter 2015 decreased by 1% compared with the same
quarter a year ago.
Supplementary financial and operational disclosure for the
second quarter 2015 is available at
http://www.shell.com/investor.
Earnings for the second quarter 2015 reflected the following
items, which in aggregate amounted to a net charge of $474 million (compared with a net charge of
$979 million for the second quarter
2014), as summarised in the table below:
- Upstream earnings included a net charge of $263 million, reflecting a net charge on fair
value accounting of certain commodity derivatives and gas contracts
of $171 million, the negative impact
of a statutory tax rate change in Canada of $150
million, asset impairments, and redundancy and restructuring
charges. These items were partly offset by net divestment gains of
$168 million. Upstream earnings for
the second quarter 2014 included a net charge of $902 million.
- Downstream earnings included a net charge of $215 million, reflecting asset impairments of
$276 million, the negative impact of
a statutory tax rate change in Canada, and redundancy and restructuring
charges. These items were partly offset by the net impact of fair
value accounting of commodity derivatives and gains on divestments.
Downstream earnings for the second quarter 2014 included a net
charge of $76 million.
- Corporate results and Non-controlling interest included a net
gain of $4 million. Earnings for the
second quarter 2014 included a net charge of $1 million.
SUMMARY OF IDENTIFIED ITEMS
Quarters $ million Half year
Q2 2015 Q1 2015[1] Q2 2014 2015 2014
Segment earnings impact of
identified items:
(263) 1,864 (902) Upstream 1,601 (1,185)
(215) (132) (76) Downstream (347) (2,656)
Corporate and
4 (217) (1) Non-controlling interest (213) -
(474) 1,515 (979) Earnings impact 1,041 (3,841)
[1] See page 18
These identified items are shown to provide additional insight
into segment earnings and income attributable to shareholders. They
include the full impact on Shell's CCS earnings of the following
items:
- Divestment gains and losses
- Impairments
- Fair value accounting of certain commodity derivatives and gas
contracts (see Note [A])
- Redundancy and restructuring
Further items may be identified in addition to the above.
EARNINGS BY BUSINESS SEGMENT
UPSTREAM
Quarters $ million Half year
Q2 2015 Q1 2015 Q2 2014 %[1] 2015 2014 %
Upstream earnings
excluding identified
1,037 675 4,722 -78 items 1,712 10,432 -84
774 2,539 3,820 -80 Upstream earnings 3,313 9,247 -64
Upstream cash flow from
2,092 4,129 8,919 -77 operating activities 6,221 17,994 -65
Upstream capital
5,916 5,943 7,102 -17 investment 11,859 16,759 -29
Liquids production
available for sale
1,432 1,542 1,499 -4 (thousand b/d) 1,487 1,490 -
Natural gas production
available for sale
7,534 9,421 9,153 -18 (million scf/d) 8,473 9,687 -13
Total production
available for sale
2,731 3,166 3,077 -11 (thousand boe/d) 2,948 3,160 -7
Equity sales of LNG
5.46 6.17 6.00 -9 (million tonnes) 11.63 12.09 -4
[1] Q2 on Q2 change
Second quarter Upstream earnings excluding identified items were
$1,037 million compared with
$4,722 million a year ago. Identified
items were a net charge of $263
million, compared with a net charge of $902 million for the second quarter 2014 (see
page 4).
Compared with the second quarter 2014, earnings excluding
identified items were impacted by the significant decline in oil
and gas prices. Earnings were further reduced as a result of lower
oil and gas production volumes driven by planned maintenance at
Pearl GTL in Qatar, heavy oil in
Canada, and deep-water in the
Gulf of Mexico, lower fiscal
entitlement at Majnoon in Iraq,
curtailment and underground storage reinjection at NAM in
the Netherlands, and divestments
in North America resources plays.
Earnings benefited from lower costs, decreased depreciation, and
new liquids production volumes, mainly from Cardamom and Mars B in
the Gulf of Mexico.
Upstream Americas excluding identified items incurred a
loss.
Global liquids realisations were 43% lower than for the second
quarter 2014. Global natural gas realisations were 31% lower than
for the same quarter a year ago, with a 53% decrease in the
Americas and a 24% decrease outside the Americas.
Second quarter 2015 production was 2,731 thousand boe/d compared
with 3,077 thousand boe/d a year ago. Liquids production decreased
by 4% and natural gas production decreased by 18% compared with the
second quarter 2014. Excluding the impact of divestments,
curtailment and underground storage reinjection at NAM in
the Netherlands, PSC price
effects, and security impacts in Nigeria, second quarter 2015 production was 3%
lower than for the same period last year. Compared with the second
quarter 2014, production volumes were negatively impacted by 131
thousand boe/d due to higher planned maintenance activities.
New field start-ups and the continuing ramp-up of fields, in
particular Bonga NW in Nigeria,
Gumusut Kakap in Malaysia, and
Cardamom and Mars B in the Gulf of
Mexico contributed some 126 thousand boe/d to production for
the second quarter 2015, which more than offset the impact of field
declines.
Equity sales of LNG of 5.46 million tonnes decreased by 9%
compared to the same quarter a year ago, mainly reflecting the
impact of an unplanned shutdown at NWS in Australia, the Woodside divestment, and lower
volumes for Malaysia LNG Dua where the JVA expired.
Half year Upstream earnings excluding identified items were
$1,712 million compared with
$10,432 million for the first half
year 2014. Identified items were a net gain of $1,601 million, compared with a net charge of
$1,185 million for the first half
year 2014 (see page 4).
Compared with the first half year 2014, Upstream earnings
excluding identified items reflected significantly lower oil and
gas prices, and lower contributions from trading. Earnings
benefited from lower costs and fewer well write-offs.
Compared with the first half year 2014, the weakening Australian
dollar and Brazilian real reduced earnings by some $583 million and $313
million respectively. The impact of these items was some
$518 million after tax, compared with
a favourable impact of some $378
million after tax in the first half year 2014.
Global liquids realisations were 48% lower than for the first
half year 2014. Global natural gas realisations were 28% lower than
for the same period a year ago, with a 50% decrease in the Americas
and a 25% decrease outside the Americas.
Half year 2015 production was 2,948 thousand boe/d compared with
3,160 thousand boe/d for the same period a year ago. Liquids
production was in line with the first half year 2014 and natural
gas production decreased by 13%. Excluding the impact of
divestments, curtailment and underground storage reinjection at NAM
in the Netherlands, Abu Dhabi license expiry, PSC price effects,
and security impacts in Nigeria,
first half year 2015 production was 1% lower than for the same
period last year.
Equity sales of LNG of 11.63 million tonnes were 4% lower than
for the first half year 2014, reflecting the impact of an unplanned
shutdown at NWS in Australia, the
Woodside divestment, and lower volumes for Malaysia LNG Dua where
the JVA expired, partly offset by improved operating
performance.
DOWNSTREAM
Quarters $ million Half year
Q2 2015 Q1 2015 Q2 2014 %[1] 2015 2014 %
Downstream CCS earnings
excluding identified
2,961 2,646 1,347 +120 items 5,607 2,922 +92
2,746 2,514 1,271 +116 Downstream CCS earnings 5,260 266 +1,877
Downstream cash flow from
3,816 1,554 262 +1,356 operating activities 5,370 3,407 +58
Downstream capital
1,085 849 1,402 -23 investment 1,934 2,386 -19
Refinery processing
2,944 2,871 3,034 -3 intake (thousand b/d) 2,908 3,000 -3
Oil products sales
6,531 6,313 6,453 +1 volumes (thousand b/d) 6,423 6,386 +1
Chemicals sales volumes
4,326 4,192 4,387 -1 (thousand tonnes) 8,518 8,672 -2
[1] Q2 on Q2 change
Second quarter Downstream earnings excluding identified items
were $2,961 million compared with
$1,347 million for the second quarter
2014. Identified items were a net charge of $215 million, compared with a net charge of
$76 million for the second quarter
2014 (see page 4).
Compared with the second quarter 2014, Downstream earnings
excluding identified items benefited from lower costs, higher
contributions from manufacturing reflecting improved operating
performance, and lower taxation. Chemicals earnings benefited from
improved intermediates market conditions which more than offset
lower base chemicals industry conditions as well as the impact of
unit shut-downs at the Moerdijk chemical site in the Netherlands.
Refinery intake volumes were 3% lower compared with the same
quarter last year. Excluding portfolio impacts, refinery intake
volumes were in line with the second quarter 2014. Refinery
availability increased to 95% compared with 94% in the second
quarter 2014.
Oil products sales volumes increased by 1% compared with the
same period a year ago reflecting higher trading volumes partly
offset by lower marketing volumes.
Chemicals sales volumes decreased by 1% compared with the same
quarter last year, mainly as a result of reduced availability
driven by downtime at the Moerdijk chemical site in the Netherlands. Chemicals manufacturing plant
availability decreased to 86% from 90% for the second quarter 2014,
mainly reflecting increased maintenance activities.
Half year Downstream earnings excluding identified items were
$5,607 million compared with
$2,922 million for the first half
year 2014. Identified items were a net charge of $347 million, compared with a net charge of
$2,656 million for the first half
year 2014 (see page 4).
Compared with the first half year 2014, Downstream earnings
excluding identified items benefited from higher contributions from
manufacturing reflecting higher realised refining margins and
improved operating performance. Earnings also benefited from lower
costs, including the impact of favourable exchange rate effects and
divestments, and lower taxation. Earnings were impacted by negative
exchange rate effects in marketing, despite stronger underlying
performance. Chemicals earnings benefited from improved
intermediates market conditions which more than offset lower base
chemicals industry conditions as well as the impact of unit
shut-downs at the Moerdijk chemical site in the Netherlands.
Refinery intake volumes were 3% lower compared with the first
half year 2014. Excluding portfolio impacts, refinery intake
volumes were 1% higher than in the first half year 2014, mainly as
a result of improved operating performance. Refinery availability
increased to 95% from 93% for the same period a year ago.
Oil products sales volumes increased by 1% compared with the
same period a year ago, mainly as a result of higher trading
volumes partly offset by lower marketing volumes.
Chemicals sales volumes decreased by 2% compared with the first
half year 2014, mainly as a result of reduced availability driven
by downtime at the Moerdijk chemical site in the Netherlands. Chemicals manufacturing plant
availability decreased to 85% from 93% for the first half year
2014, mainly reflecting increased maintenance activities.
CORPORATE AND NON-CONTROLLING INTEREST
Quarters $ million Half year
Q2 2015 Q1 2015 Q2 2014 2015 2014
Corporate and Non-controlling
interest excl. identified
(163) (75) 57 items (238) 99
Of which:
(69) 46 101 Corporate (23) 177
(94) (121) (44) Non-controlling interest (215) (78)
Corporate and Non-controlling
(159) (292) 56 interest (451) 99
Second quarter Corporate results and Non-controlling interest
excluding identified items were a loss of $163 million, compared with a gain of
$57 million for the same period last
year. Identified items for the second quarter 2015 were a net gain
of $4 million, whereas earnings for
the second quarter 2014 included a net charge of $1 million (see page 4).
Compared with the second quarter 2014, Corporate results
excluding identified items were impacted by lower tax credits,
adverse currency exchange rate effects, and higher costs, partly
offset by lower net interest expense.
Half year Corporate results and Non-controlling interest
excluding identified items were a loss of $238 million compared with a gain of $99 million for the first half year 2014.
Identified items for the first half year 2015 were a net charge of
$213 million, compared with nil
impact for the first half year 2014 (see page 4).
Compared with the first half year 2014, Corporate results
excluding identified items were impacted by adverse currency
exchange rate effects, partly offset by lower net interest
expense.
Compared with the first half year 2014, earnings benefited from
the impact of the weakening Brazilian real on deferred tax
positions in Upstream by some $101
million. The impact of this on the first half 2015 earnings
excluding identified items was a gain of some $101 million after tax, compared with nil impact
in the first half 2014.
OPERATIONAL OUTLOOK FOR THE THIRD QUARTER 2015
Compared with the third quarter 2014, Upstream earnings are
expected to be impacted by some 104 thousand boe/d as a result of
divestments, some 80 thousand boe/d associated with the impact of
curtailment and underground storage reinjection at NAM, and some 33
thousand boe/d driven by planned maintenance in the third quarter
2015.
As a result of asset sales in Australia and Italy, refining capacity is expected to
decrease by 60 thousand barrels per day and marketing volumes are
expected to decrease by some 100 thousand barrels per day compared
with the third quarter 2014. Refinery availability is expected to
decline in the third quarter 2015 as a result of increased planned
maintenance compared to the same period a year ago. Unit shut-downs
at the Moerdijk chemical site in the
Netherlands are expected to continue to impact Chemicals
manufacturing plant availability.
FORTHCOMING EVENTS
Third quarter 2015 results and third quarter 2015 dividend are
scheduled to be announced on October 29,
2015.
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
CONSOLIDATED STATEMENT OF INCOME
Quarters $ million Half year
Q2 2015 Q1 2015 Q2 2014 %[1] 2015 2014 %
72,402 65,706 111,222 Revenue 138,108 220,880
Share of profit of
joint ventures and
1,136 1,405 1,716 associates 2,541 3,786
Interest and other
412 1,735 2,336 income 2,147 2,687
Total revenue and other
73,950 68,846 115,274 income 142,796 227,353
52,441 47,425 85,296 Purchases 99,866 169,131
Production and
6,506 6,655 7,839 manufacturing expenses 13,161 15,018
Selling, distribution
and administrative
3,076 2,894 3,755 expenses 5,970 7,189
Research and
252 253 274 development 505 557
964 800 1,128 Exploration 1,764 2,055
Depreciation, depletion
4,673 4,604 7,354 and amortisation 9,277 14,778
466 376 505 Interest expense 842 957
5,572 5,839 9,123 -39 Income before taxation 11,411 17,668 -35
1,458 1,302 3,778 Taxation 2,760 7,781
4,114 4,537 5,345 -23 Income for the period 8,651 9,887 -13
Income attributable to
non-controlling
128 107 38 interest 235 71
Income attributable to
Royal Dutch Shell plc
3,986 4,430 5,307 -25 shareholders 8,416 9,816 -14
[1] Q2 on Q2 change
EARNINGS PER SHARE
Quarters $ Half year
Q2 2015 Q1 2015 Q2 2014 2015 2014
0.63 0.70 0.84 Basic earnings per share 1.34 1.56
0.62 0.69 0.84 Diluted earnings per share 1.32 1.56
SHARES[1]
Quarters Millions Half year
Q2 2015 Q1 2015 Q2 2014 2015 2014
Weighted average number of
shares as the basis for:
6,304.6 6,292.2 6,323.0 Basic earnings per share 6,298.4 6,305.5
6,383.9 6,377.0 6,323.4 Diluted earnings per share 6,380.5 6,305.8
Shares outstanding at the
6,325.2 6,302.3 6,341.7 end of the period 6,325.2 6,341.7
[1] Royal Dutch Shell plc ordinary shares of EUR0.07 each
Notes 1 to 6 are an integral part of these unaudited Condensed
Consolidated Interim Financial Statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Quarters $ million Half year
Q2 2015 Q1 2015 Q2 2014 2015 2014
4,114 4,537 5,345 Income for the period 8,651 9,887
Other comprehensive income
net of tax:
Items that may be
reclassified to income in
later periods:
- Currency translation
1,668 (4,199) 591 differences (2,531) 40
- Unrealised gains/(losses)
(129) (135) (182) on securities (264) (154)
- Cash flow hedging
133 (9) (18) gains/(losses) 124 1
- Share of other
comprehensive income/(loss)
of joint ventures and
(25) 7 5 associates (18) (2)
1,647 (4,336) 396 Total (2,689) (115)
Items that are not
reclassified to income in
later periods:
- Retirement benefits
5,496 (1,316) (253) remeasurements 4,180 (799)
Other comprehensive
income/(loss) for the
7,143 (5,652) 143 period 1,491 (914)
Comprehensive income/(loss)
11,257 (1,115) 5,488 for the period 10,142 8,973
Comprehensive income/(loss)
attributable to
161 63 48 non-controlling interest 224 77
Comprehensive income/(loss)
attributable to Royal Dutch
11,096 (1,178) 5,440 Shell plc shareholders 9,918 8,896
Notes 1 to 6 are an integral part of these unaudited Condensed
Consolidated Interim Financial Statements.
CONDENSED CONSOLIDATED BALANCE SHEET
$ million
Jun 30, 2015 Mar 31, 2015 Dec 31, 2014
Assets
Non-current assets:
Intangible assets 6,779 6,852 7,076
Property, plant and equipment 192,633 189,263 192,472
Joint ventures and associates 32,284 31,643 31,558
Investments in securities 3,854 3,952 4,115
Deferred tax 7,969 8,439 8,131
Retirement benefits 3,892 1,912 1,682
Trade and other receivables 8,522 8,240 8,304
255,933 250,301 253,338
Current assets:
Inventories 22,485 19,968 19,701
Trade and other receivables 50,929 51,696 58,470
Cash and cash equivalents 26,981 19,867 21,607
100,395 91,531 99,778
Total assets 356,328 341,832 353,116
Liabilities
Non-current liabilities:
Debt 45,575 35,703 38,332
Trade and other payables 4,877 4,769 3,582
Deferred tax 11,676 10,240 12,052
Retirement benefits 12,642 17,642 16,318
Decommissioning and other
provisions 25,055 25,154 23,834
99,825 93,508 94,118
Current liabilities:
Debt 7,366 8,137 7,208
Trade and other payables 56,424 55,761 64,864
Taxes payable 10,362 11,705 9,797
Retirement benefits 367 361 377
Decommissioning and other
provisions 3,976 3,538 3,966
78,495 79,502 86,212
Total liabilities 178,320 173,010 180,330
Equity attributable to Royal Dutch
Shell plc shareholders 176,787 167,960 171,966
Non-controlling interest 1,221 862 820
Total equity 178,008 168,822 172,786
Total liabilities and equity 356,328 341,832 353,116
Notes 1 to 6 are an integral part of these unaudited Condensed
Consolidated Interim Financial Statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity attributable to Royal Dutch Shell
plc shareholders
Shares
Share held in Other Retained Non-controlling Total
$ million capital trust reserves earnings Total interest equity
At January 1,
2015 540 (1,190) (14,365) 186,981 171,966 820 172,786
Comprehensive
income
for the period - - 1,502 8,416 9,918 224 10,142
Capital
contributions
from, and
other changes
in,
non-controllin
g interest - - - (98) (98) 222 124
Dividends paid - - - (5,957) (5,957) (45) (6,002)
Scrip
dividends[1] 2 - (2) 731 731 - 731
Repurchases of
shares[2] (1) - 1 1 1 - 1
Shares held in
trust:
net sales and
dividends
received - 634 - 39 673 - 673
Share-based
compensation - - (421) (26) (447) - (447)
At June 30,
2015 541 (556) (13,285) 190,087 176,787 1,221 178,008
At January 1,
2014 542 (1,932) (2,037) 183,474 180,047 1,101 181,148
Comprehensive
income for the
period - - (920) 9,816 8,896 77 8,973
Capital
contributions
from, and
other changes
in,
non-controllin
g interest - - - 3 3 (7) (4)
Dividends paid - - - (5,862) (5,862) (73) (5,935)
Scrip
dividends[1] 6 - (6) 2,399 2,399 - 2,399
Repurchases of
shares[2] (4) - 4 (1,028) (1,028) - (1,028)
Shares held in
trust:
net sales and
dividends
received - 809 - 56 865 - 865
Share-based
compensation - - (305) - (305) - (305)
At June 30,
2014 544 (1,123) (3,264) 188,858 185,015 1,098 186,113
1 Under the Scrip Dividend Programme some 23.4 million A shares,
equivalent to $0.7 billion, were
issued during the first half year 2015 and some 64.6 million A
shares, equivalent to $2.4 billion,
were issued during the first half year 2014.
2 Includes shares committed to repurchase and repurchases
subject to settlement at the end of the quarter.
Notes 1 to 6 are an integral part of these unaudited Condensed
Consolidated Interim Financial Statements.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Quarters $ million Half year
Q2 2015 Q1 2015 Q2 2014 2015 2014
Cash flow from operating activities
4,114 4,537 5,345 Income for the period 8,651 9,887
Adjustment for:
1,753 2,947 4,336 - Current taxation 4,700 8,736
395 303 468 - Interest expense (net) 698 846
- Depreciation, depletion and
4,673 4,604 7,355 amortisation 9,277 14,779
- Net losses/(gains) on sale of
(247) (1,612) (2,203) non-current assets and businesses (1,859) (2,162)
(1,588) (372) (2,335) - Decrease/(increase) in working capital (1,960) (1,460)
- Share of loss/(profit) of joint
(1,136) (1,405) (1,716) ventures and associates (2,541) (3,786)
- Dividends received from joint ventures
1,071 1,077 1,768 and associates 2,148 3,275
- Deferred taxation, retirement
benefits, decommissioning
(90) (1,503) (396) and other provisions (1,593) (704)
255 94 399 - Other 349 928
Net cash from operating activities
9,200 8,670 13,021 (pre-tax) 17,870 30,339
(3,150) (1,564) (4,380) Taxation paid (4,714) (7,714)
6,050 7,106 8,641 Net cash from operating activities 13,156 22,625
Cash flow from investing activities
(6,205) (6,215) (7,906) Capital expenditure[1] (12,420) (15,062)
Investments in joint ventures and
(208) (409) (493) associates (617) (1,382)
Proceeds from sales of property, plant
206 2,203 3,539 and equipment and businesses 2,409 3,845
Proceeds from sales of joint ventures
165 4 3,671 and associates 169 3,727
59 56 31 Interest received 115 89
(80) (79) 222 Other[1] (159) 133
(6,063) (4,440) (936) Net cash used in investing activities (10,503) (8,650)
Cash flow from financing
activities
Net increase/(decrease) in debt with
1,072 (255) (1,397) maturity period within three months 817 (2,694)
10,045 752 140 Other debt: New borrowings 10,797 3,335
(2,188) (630) (251) Repayments (2,818) (3,184)
(317) (409) (398) Interest paid (726) (766)
424 (5) (13) Change in non-controlling interest[2] 419 (13)
Cash dividends paid to:
(2,294) (2,932) (1,964) - Royal Dutch Shell plc shareholders (5,226) (3,463)
(27) (18) (45) - Non-controlling interest (45) (73)
- (409) (346) Repurchases of shares (409) (1,587)
Shares held in trust: net
(5) (40) 90 sales/(purchases) and dividends received (45) 213
6,710 (3,946) (4,184) Net cash used in financing activities 2,764 (8,232)
Currency translation differences
relating to cash and
417 (460) (26) cash equivalents (43) (20)
Increase/(decrease) in cash and cash
7,114 (1,740) 3,495 equivalents 5,374 5,723
Cash and cash equivalents at beginning
19,867 21,607 11,924 of period 21,607 9,696
Cash and cash equivalents at end of
26,981 19,867 15,419 period 26,981 15,419
[1] Reflects a minor change to definition with effect from 2015
which has no overall impact on net cash used in investing
activities. Comparative data has been reclassified accordingly.
[2] Q2 2015 mainly relates to the public offering of limited
partner units in Shell Midstream Partners, L.P.
Notes 1 to 6 are an integral part of these unaudited Condensed
Consolidated Interim Financial Statements.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
1. Basis of preparation
These unaudited Condensed Consolidated Interim Financial
Statements ("Interim Statements") of Royal Dutch Shell plc and its
subsidiaries (collectively referred to as Shell) have been prepared
in accordance with IAS 34 Interim Financial Reporting as
adopted by the European Union and as issued by the International
Accounting Standards Board and on the basis of the same accounting
principles as, and should be read in conjunction with, the Annual
Report and Form 20-F for the year ended December 31, 2014 (pages 111 to 116) as filed
with the U.S. Securities and Exchange Commission.
The Directors consider it appropriate to continue to adopt the
going concern basis of accounting in preparing these Interim
Statements.
The financial information presented in the Interim Statements
does not constitute statutory accounts within the meaning of
section 434(3) of the Companies Act 2006. Statutory accounts for
the year ended December 31, 2014 were
published in Shell's Annual Report and a copy was delivered to the
Registrar of Companies in England
and Wales. The auditors' report on
those accounts was unqualified, did not include a reference to any
matters to which the auditors drew attention by way of emphasis
without qualifying the report and did not contain a statement under
sections 498(2) or 498(3) of the Companies Act 2006.
2. Segment information
Segment earnings are presented on a current cost of supplies
basis (CCS earnings), which is the earnings measure used by the
Chief Executive Officer for the purposes of making decisions about
allocating resources and assessing performance. On this basis, the
purchase price of volumes sold during the period is based on the
current cost of supplies during the same period after making
allowance for the tax effect. CCS earnings therefore exclude the
effect of changes in the oil price on inventory carrying
amounts.
Information by business segment:
Quarters $ million Half year
Q2 2015 Q2 2014 2015 2014
Third-party revenue
6,296 10,658 Upstream 14,062 23,671
66,082 100,548 Downstream 123,998 197,151
24 16 Corporate 48 58
72,402 111,222 Total third-party revenue 138,108 220,880
Inter-segment revenue
7,490 12,621 Upstream 13,720 24,872
271 463 Downstream 633 1,071
- - Corporate - -
Segment earnings
774 3,820 Upstream[1] 3,313 9,247
2,746 1,271 Downstream[2] 5,260 266
(68) 100 Corporate (239) 177
3,452 5,191 Total segment earnings 8,334 9,690
Quarters $ million Half year
Q2 2015 Q2 2014 2015 2014
3,452 5,191 Total segment earnings 8,334 9,690
Current cost of supplies adjustment:
765 151 Purchases 413 143
(219) (42) Taxation (117) (43)
Share of profit/(loss) of joint ventures and
116 45 associates 21 97
4,114 5,345 Income for the period 8,651 9,887
[1] Second quarter 2014 Upstream earnings included an impairment
charge of $1,943 million after
taxation, partly offset by divestment gains of $1,230 million after taxation.
[2] First quarter 2014 Downstream earnings included an
impairment charge of $2,284 million
related to refineries in Asia and
Europe.
3. Share capital
Issued and fully paid
Sterling deferred
Ordinary shares of EUR0.07 each shares
Number of shares A B of GBP1 each
At January 1, 2015 3,907,302,393 2,440,410,614 50,000
Scrip dividends 23,430,143 - -
Repurchases of shares (12,717,512) - -
At June 30, 2015 3,918,015,024 2,440,410,614 50,000
At January 1, 2014 3,898,011,213 2,472,839,187 50,000
Scrip dividends 64,568,758 - -
Repurchases of shares (8,620,000) (32,428,573) -
At June 30, 2014 3,953,959,971 2,440,410,614 50,000
Nominal value
Ordinary shares of EUR0.07 each
$ million A B Total
At January 1, 2015 334 206 540
Scrip dividends 2 - 2
Repurchases of shares (1) - (1)
At June 30, 2015 335 206 541
At January 1, 2014 333 209 542
Scrip dividends 6 - 6
Repurchases of shares (1) (3) (4)
At June 30, 2014 338 206 544
The total nominal value of sterling deferred shares is less than $1 million.
At Royal Dutch Shell plc's Annual General Meeting on
May 19, 2015, the Board was
authorised to allot ordinary shares in Royal Dutch Shell plc, and
to grant rights to subscribe for or to convert any security into
ordinary shares in Royal Dutch Shell plc, up to an aggregate
nominal amount of €147 million (representing 2,100 million ordinary
shares of €0.07 each), and to list such shares or rights on any
stock exchange. This authority expires at the earlier of the close
of business on August 19, 2016, and
the end of the Annual General Meeting to be held in 2016, unless
previously renewed, revoked or varied by Royal Dutch Shell plc in a
general meeting.
4. Other reserves
Share Accumulated
premium Capital other
Merger reserve[1] redemption Share plan comprehensive
$ million reserve[1] reserve[2] reserve income Total
At January 1, 2015 3,405 154 83 1,723 (19,730) (14,365)
Other comprehensive
income/(loss)
attributable to Royal
Dutch Shell plc
shareholders - - - - 1,502 1,502
Scrip dividends (2) - - - - (2)
Repurchases of shares - - 1 - - 1
Share-based
compensation - - - (421) - (421)
At June 30, 2015 3,403 154 84 1,302 (18,228) (13,285)
At January 1, 2014 3,411 154 75 1,871 (7,548) (2,037)
Other comprehensive
income/(loss)
attributable to Royal
Dutch Shell plc
shareholders - - - - (920) (920)
Scrip dividends (6) - - - - (6)
Repurchases of shares - - 4 - - 4
Share-based
compensation - - - (305) - (305)
At June 30, 2014 3,405 154 79 1,566 (8,468) (3,264)
[1] The merger reserve and share premium reserve were
established as a consequence of Royal Dutch Shell plc becoming the
single parent company of Royal Dutch Petroleum Company and The
"Shell" Transport and Trading Company, plc, now The Shell Transport
and Trading Company Limited, in 2005.
[2] The capital redemption reserve was established in connection
with repurchases of shares of Royal Dutch Shell plc.
5. Derivative contracts
The table below provides the carrying amounts of derivatives
contracts held, disclosed in accordance with IFRS 13 Fair Value
Measurement.
$ million Jun 30, 2015 Mar 31, 2015 Dec 31, 2014
Included within:
Trade and other receivables - non-current 774 799 703
Trade and other receivables - current 9,090 11,378 14,037
Trade and other payables - non-current 1,635 1,643 520
Trade and other payables - current 7,574 9,644 11,554
As disclosed in the Consolidated Financial Statements for the
year ended December 31, 2014,
presented in the Annual Report and Form 20-F for that year, Shell
is exposed to the risks of changes in fair value of its financial
assets and liabilities. The fair values of the financial assets and
liabilities are defined as the price that would be received to sell
an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. Methods and
assumptions used to estimate the fair values at June 30, 2015 are consistent with those used in
the year ended December 31, 2014, and
the carrying amounts of derivative contracts measured using
predominantly unobservable inputs have not changed materially since
that date.
The fair value of debt excluding finance lease liabilities at
June 30, 2015, was $47,942 million (March 31,
2015: $39,753 million;
December 31, 2014: $41,120 million). Fair value is determined from
the prices quoted for those securities.
6. Recommended cash and share offer for BG Group plc by Royal
Dutch Shell plc
On April 8, 2015, the Boards of
Royal Dutch Shell plc and BG Group plc announced that they have
reached agreement on the terms of a recommended cash and share
offer to be made by Royal Dutch Shell plc for the entire issued and
to be issued share capital of BG Group plc, representing a value of
approximately £47 billion based on the closing price of
2,208.5 pence per Royal Dutch Shell
plc B share on April 7, 2015.
The transaction is subject to certain pre-conditions and
conditions and Royal Dutch Shell plc has agreed to use its
reasonable endeavours to secure the necessary regulatory clearances
and authorisations. It is expected that Royal Dutch Shell plc's
circular will be despatched to shareholders, and its prospectus
published, at the same time as BG Group's scheme document is
published, and no later than 28 days after the pre-conditions are
satisfied and/or waived. The transaction is expected to complete in
early 2016.
Under certain circumstances occurring on or prior to
July 31, 2016, such as the Royal
Dutch Shell plc Board withdrawing its recommendation to Royal Dutch
Shell plc shareholders to vote in favour of the transaction, Royal
Dutch Shell plc has agreed to pay BG Group plc £750 million by way
of compensation for any loss suffered by BG Group plc in connection
with the preparation and negotiation of the transaction.
ADDITIONAL NOTES FOR INFORMATION
A. Impacts of accounting for derivatives
In the ordinary course of business Shell enters into contracts
to supply or purchase oil and gas products as well as power and
environmental products. Derivative contracts are entered into for
mitigation of resulting economic exposures (generally price
exposure) and these derivative contracts are carried at period-end
market price (fair value), with movements in fair value recognised
in income for the period. Supply and purchase contracts entered
into for operational purposes are, by contrast, recognised when the
transaction occurs (see also below); furthermore, inventory is
carried at historical cost or net realisable value, whichever is
lower.
As a consequence, accounting mismatches occur because: (a) the
supply or purchase transaction is recognised in a different period;
or (b) the inventory is measured on a different basis.
In addition, certain UK gas contracts held by Upstream are, due
to pricing or delivery conditions, deemed to contain embedded
derivatives or written options and are also required to be carried
at fair value even though they are entered into for operational
purposes.
The accounting impacts of the aforementioned are reported as
identified items in this Report.
B. Capital investment
Capital investment is a measure used to make decisions about
allocating resources and assessing performance. It is defined as
the sum of capital expenditure, exploration expense (excluding well
write-offs), new investments in joint ventures and associates, new
finance leases and other adjustments.
C. Return on average capital employed
Return on average capital employed (ROACE) measures the
efficiency of Shell's utilisation of the capital that it employs
and is a common measure of business performance. In this
calculation, ROACE is defined as the sum of income for the current
and previous three quarters, adjusted for after-tax interest
expense, as a percentage of the average capital employed for the
same period. The tax rate used is Shell's effective tax rate for
the period. Capital employed consists of total equity, current debt
and non-current debt.
D. Gearing
Gearing, calculated as net debt (total debt less cash and cash
equivalents) as a percentage of total capital (net debt plus total
equity), is a key measure of Shell's capital structure.
E. Liquidity and capital resources
Net cash from operating activities for the second quarter 2015
was $6.1 billion compared with
$8.6 billion for the same period last
year.
Total current and non-current debt increased to $52.9 billion at June 30,
2015 from $43.8 billion at
March 31, 2015 while cash and cash
equivalents increased to $27.0
billion at June 30, 2015 from
$19.9 billion at March 31, 2015. During the second quarter 2015
Shell issued $10.0 billion of debt
under the US shelf registration. No new debt was issued under the
euro medium-term note programme.
Capital investment for the second quarter 2015 was $7.1 billion, of which $5.9 billion in Upstream and $1.1 billion in Downstream. Capital investment
for the same period of 2014 was $8.5
billion, of which $7.1 billion
in Upstream and $1.4 billion in
Downstream.
Dividends of $0.47 per share are
announced on July 30, 2015 in respect
of the second quarter. These dividends are payable on September 21, 2015. In the case of B shares, the
dividends will be payable through the dividend access mechanism and
are expected to be treated as UK-source rather than Dutch-source.
See the Annual Report and Form 20-F for the year ended December 31, 2014 for additional information on
the dividend access mechanism.
Under the Scrip Dividend Programme shareholders can increase
their shareholding in Shell by choosing to receive new shares
instead of cash dividends. Only new A shares will be issued under
the Programme, including to shareholders who currently hold B
shares.
Half year net cash from operating activities was
$13.2 billion compared with
$22.6 billion for the same period
last year.
Total current and non-current debt increased to $52.9 billion at June 30,
2015 from $45.5 billion at
December 31, 2014 while cash and cash
equivalents increased to $27.0
billion at June 30, 2015 from
$21.6 billion at December 31, 2014. During the first half year
2015 Shell issued $10.0 billion of
debt under the US shelf registration. No new debt was issued under
the euro medium-term note programme.
Capital investment for the first half year 2015 was $13.9 billion, of which $11.9 billion in Upstream and $1.9 billion in Downstream. Capital investment
for the same period of 2014 was $19.2
billion, of which $16.8
billion in Upstream and $2.4
billion in Downstream.
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and uncertainties affecting Shell are
described in the Risk Factors section of the Annual Report and Form
20-F for the year ended December 31,
2014 (pages 11 to 14) and are summarised below. There are no
material changes in those Risk Factors for the remaining 6 months
of the financial year.
- We are exposed to fluctuating prices of crude oil, natural gas,
oil products and chemicals.
- Our ability to deliver competitive returns and pursue
commercial opportunities depends in part on the robustness and,
ultimately, the accuracy of our price assumptions.
- Our ability to achieve strategic objectives depends on how we
react to competitive forces.
- As our business model involves treasury and trading risks, we
are affected by the global macroeconomic environment as well as
financial and commodity market conditions.
- Our future hydrocarbon production depends on the delivery of
large and complex projects, as well as on our ability to replace
proved oil and gas reserves.
- An erosion of our business reputation would have a negative
impact on our brand, our ability to secure new resources and our
licence to operate.
- Our future performance depends on the successful development
and deployment of new technologies.
- Rising climate change concerns could lead to additional
regulatory measures that may result in project delays and higher
costs.
- The nature of our operations exposes the communities in which
we work and us to a wide range of health, safety, security and
environment risks.
- Shell mainly self-insures its risk exposures.
- A further erosion of the business and operating environment in
Nigeria would adversely impact
Shell.
- We operate in more than 70 countries that have differing
degrees of political, legal and fiscal stability. This exposes us
to a wide range of political developments that could result in
changes to laws and regulations. In addition, Shell and its joint
ventures and associates face the risk of litigation and disputes
worldwide.
- Our operations expose us to social instability, civil unrest,
terrorism, piracy, acts of war, and risks of pandemic diseases that
could have an adverse impact on our business.
- We rely heavily on information technology systems for our
operations.
- We have substantial pension commitments, whose funding is
subject to capital market risks.
- The estimation of proved oil and gas reserves involves
subjective judgements based on available information and the
application of complex rules, so subsequent downward adjustments
are possible.
- Many of our major projects and operations are conducted in
joint arrangements or associates. This may reduce our degree of
control, as well as our ability to identify and manage risks.
- Violations of antitrust and competition law carry fines and
expose us and/or our employees to criminal sanctions and civil
suits.
- Violations of anti-bribery and corruption law and anti-money
laundering law carry fines and expose us and/or our employees to
criminal sanctions and civil suits.
- Violations of data protection laws carry fines and expose us
and/or our employees to criminal sanctions and civil suits.
- Violations of trade controls, including sanctions expose us and
our employees to criminal sanctions and civil suits.
- We execute acquisitions and divestments in the pursuit of our
strategy. A number of risks impact the success of such acquisitions
and divestments.
- The Company's Articles of Association determine the
jurisdiction for shareholder disputes. This might limit shareholder
remedies.
FIRST QUARTER 2015 PORTFOLIO DEVELOPMENTS
Upstream
In April, the Boards of Royal Dutch Shell plc and BG Group plc
announced that they have reached agreement on the terms of a
recommended cash and share offer to be made by Royal Dutch Shell
plc for the entire issued and to be issued share capital of BG
Group plc.
In Shell's heartlands exploration programme there were two
non-operated gas discoveries offshore Australia, Blake (Shell interest 50%) and
Isosceles (Shell interest 25%), during the quarter. In Brazil, hydrocarbons were discovered at the
non-operated Libra C-1 well (Shell interest 20%).
Shell had continued success with near-field exploration
discoveries in New Zealand and
Oman.
As part of its global exploration programme, Shell added new
acreage positions following successful bidding results in
Algeria, Australia, Italy, Myanmar and Norway.
In Nigeria, the Shell Petroleum
Development Company of Nigeria Limited ("SPDC"), a subsidiary of
Shell, completed the divestment of its 30% interest in oil mining
lease ("OML") 18 and related facilities in the Eastern Niger Delta
for a consideration of some $0.7
billion.
Also in Nigeria, SPDC completed
the divestment of its 30% interest in OML 29 and the Nembe Creek
Trunk Line and related facilities in the Eastern Niger Delta for a
consideration of some $1.7
billion.
Downstream
In Canada, Shell has taken
final investment decision ("FID") on the Scotford HCU debottleneck
project (Shell interest 100%) which is expected to increase
hydrocracking capacity by 20%.
In Denmark, Shell announced
that it has reached an agreement with Couche-Tard for the sale of
its marketing operations including retail, commercial fleet,
commercial fuels, aviation and connected trading and supply
products businesses. The sale is subject to regulatory approvals
and is expected to complete in 2015.
In Qatar, Shell announced that
as a result of high capital costs, Shell and its partner, Qatar
Petroleum, will not proceed with the proposed Al Karaana
petrochemicals project and will stop further work on it.
In April, Shell announced that it has accepted offers for the
sale of 185 service stations across the United Kingdom to independent dealers and has
exchanged contracts for 158 of these service stations with two
dealer groups. All 185 service stations will retain the Shell brand
and sell Shell's fuels.
FIRST QUARTER 2015 SUMMARY OF IDENTIFIED ITEMS
Earnings for the first quarter 2015 reflected the following
items, which in aggregate amounted to a net gain of $1,515 million (compared with a net charge of
$2,862 million in the first quarter
2014), as summarised below:
- Upstream earnings included a net gain of $1,864 million, mainly reflecting a gain of
$1,415 million related to divestments
and a credit of some $600 million
reflecting a statutory tax rate reduction in the United Kingdom. These items were partly offset
by asset impairments of $159 million.
Earnings for the first quarter 2014 included a net charge of
$283 million.
- Downstream earnings included a net charge of $132 million, including the net impact of fair
value accounting of commodity derivatives of $56 million. Earnings for the first quarter 2014
included a net charge of $2,580
million.
- Corporate and Non-controlling interest earnings included a net
charge of $217 million mainly
reflecting a tax charge related to prior years. Earnings for the
first quarter 2014 included a net gain of $1
million.
RESPONSIBILITY STATEMENT
It is confirmed that to the best of our knowledge: (a) the
Condensed Consolidated Interim Financial Statements have been
prepared in accordance with IAS 34 Interim Financial Reporting as
adopted by the European Union; (b) the interim management report
includes a fair review of the information required by Disclosure
and Transparency Rule (DTR) 4.2.7R (indication of important events
during the first six months of the financial year, and their impact
on the Condensed Consolidated Interim Financial Statements, and
description of principal risks and uncertainties for the remaining
six months of the financial year); and (c) the interim management
report includes a fair review of the information required by DTR
4.2.8R (disclosure of related parties transactions and changes
thereto).
The Directors of Royal Dutch Shell plc are as shown on pages
58-60 in the Annual Report and Form 20-F for the year ended
December 31, 2014 except that
Jorma Ollila stepped down as a
Director on May 19, 2015.
On behalf of the Board
Ben van Beurden Simon Henry
Chief Executive Officer Chief Financial Officer
July 30, 2015 July 30, 2015
INDEPENDENT REVIEW REPORT TO ROYAL DUTCH SHELL PLC
Report on the Condensed Consolidated Interim Financial
Statements
Our conclusion
We have reviewed the Condensed Consolidated Interim Financial
Statements, defined below, in the half-yearly financial report of
Royal Dutch Shell plc for the six months ended June 30, 2015. Based on our review, nothing has
come to our attention that causes us to believe that the Condensed
Consolidated Interim Financial Statements are not prepared, in all
material respects, in accordance with International Accounting
Standard 34 as adopted by the European Union and the Disclosure and
Transparency Rules of the United
Kingdom's Financial Conduct Authority. This conclusion is to
be read in the context of what we say in the remainder of this
report.
What we have reviewed
The Condensed Consolidated Interim Financial Statements, which
are prepared by Royal Dutch Shell plc, comprise:
- the Consolidated Statement of Income and Consolidated Statement
of Comprehensive Income for the six months ended June 30, 2015;
- the Condensed Consolidated Balance Sheet as at June 30, 2015;
- the Consolidated Statement of Changes in Equity and Condensed
Consolidated Statement of Cash Flows for the six months ended
June 30, 2015; and
- the explanatory notes to the Condensed Consolidated Interim
Financial Statements.
The annual financial statements of Royal Dutch Shell plc are
prepared in accordance with applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European
Union. The Condensed Consolidated Interim Financial Statements
included in this half-yearly financial report have been prepared in
accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as adopted by the European Union and the
Disclosure and Transparency Rules of the United Kingdom's Financial Conduct
Authority.
What a review of the Condensed Consolidated Financial Statements
involves
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial
Information Performed by the Independent Auditor of the Entity'
issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with
International Standards on Auditing (UK and Ireland) and, consequently, does not enable us
to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion. We have read the other information
contained in the half-yearly financial report and considered
whether it contains any apparent misstatements or material
inconsistencies with the information in the Condensed Consolidated
Interim Financial Statements.
Responsibilities for the Condensed Consolidated Interim
Financial Statements and the review
Our responsibilities and those of the directors
The half-yearly financial report, including the Condensed
Consolidated Interim Financial Statements, is the responsibility
of, and has been approved by, the directors. The directors are
responsible for preparing the half-yearly financial report in
accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct
Authority. Our responsibility is to express to the company a
conclusion on the Condensed Consolidated Interim Financial
Statements in the half-yearly financial report based on our review.
This report, including the conclusion, has been prepared for and
only for the company for the purpose of complying with the
Disclosure and Transparency Rules of the Financial Conduct
Authority and for no other purpose. We do not, in giving this
conclusion, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent
in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
July 30, 2015
- The maintenance and integrity of the Royal Dutch Shell plc
website (http://www.shell.com) are the responsibility of the
directors; the work carried out by the auditors does not involve
consideration of these matters and, accordingly, the auditors
accept no responsibility for any changes that may have occurred to
the Condensed Consolidated Interim Financial Statements since they
were initially presented on the website.
- Legislation in the United
Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other
jurisdictions.
CAUTIONARY STATEMENT
The release, presentation, publication or distribution of this
announcement in jurisdictions other than the United Kingdom may be restricted by law and
therefore any persons who are subject to the laws of any
jurisdiction other than the United
Kingdom should inform themselves about and observe any
applicable requirements. Any failure to comply with applicable
requirements may constitute a violation of the laws and/or
regulations of any such jurisdiction.
This announcement is not intended to and does not constitute or
form part of any offer to sell or subscribe for or any invitation
to purchase or subscribe for any securities or the solicitation of
any vote or approval in any jurisdiction pursuant to the
recommended combination of Royal Dutch Shell plc ("Shell") and BG
Group plc ("BG") (the "Combination") or otherwise nor shall there
be any sale, issuance or transfer of securities of Shell or BG
pursuant to the Combination in any jurisdiction in contravention of
applicable laws.
All amounts shown throughout this announcement are unaudited.
All peak production figures in Portfolio Developments are quoted at
100% expected production.
The companies in which Royal Dutch Shell plc directly and
indirectly owns investments are separate entities. In this
announcement "Shell", "Shell group" and "Royal Dutch Shell" are
sometimes used for convenience where references are made to Royal
Dutch Shell plc and its subsidiaries in general. Likewise, the
words "we", "us" and "our" are also used to refer to subsidiaries
in general or to those who work for them. These expressions are
also used where no useful purpose is served by identifying the
particular company or companies. "Subsidiaries", "Shell
subsidiaries" and "Shell companies" as used in this announcement
refer to companies over which Royal Dutch Shell plc either directly
or indirectly has control. Companies over which Shell has joint
control are generally referred to as "joint ventures" and companies
over which Shell has significant influence but neither control nor
joint control are referred to as "associates". The term "Shell
interest" is used for convenience to indicate the direct and/or
indirect ownership interest held by Shell in a venture, partnership
or company, after exclusion of all third-party interest.
This announcement contains forward-looking statements concerning
the financial condition, results of operations and businesses of
Royal Dutch Shell and of the Combination. 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, BG and the combined group to market risks and
statements expressing management's expectations, beliefs,
estimates, forecasts, projections and assumptions. These
forward-looking statements are identified by their use of terms and
phrases such as "anticipate", "believe", "could", "estimate",
"expect", "goals", "intend", "may", "objectives", "outlook",
"plan", "probably", "project", "risks", "schedule", "seek",
"should", "target", "will" and similar terms and phrases. There are
a number of factors that could affect the future operations of
Royal Dutch Shell and could cause those results to differ
materially from those expressed in the forward-looking statements
included in this announcement, including (without limitation): (a)
price fluctuations in crude oil and natural gas; (b) changes in
demand for Shell's products; (c) currency fluctuations; (d)
drilling and production results; (e) reserves estimates; (f) loss
of market share and industry competition; (g) environmental and
physical risks; (h) risks associated with the identification of
suitable potential acquisition properties and targets, and
successful negotiation and completion of such transactions; (i) the
risk of doing business in developing countries and countries
subject to international sanctions; (j) legislative, fiscal and
regulatory developments including regulatory measures addressing
climate change; (k) economic and financial market conditions in
various countries and regions; (l) political risks, including the
risks of expropriation and renegotiation of the terms of contracts
with governmental entities, delays or advancements in the approval
of projects and delays in the reimbursement for shared costs; and
(m) changes in trading conditions. All forward-looking statements
contained in this announcement are expressly qualified in their
entirety by the cautionary statements contained or referred to in
this section. Readers should not place undue reliance on
forward-looking statements. Additional risk factors that may affect
future results are contained in Royal Dutch Shell's Form 20-F for
the year ended December 31, 2014 (available at
http://www.shell.com/investor and http://www.sec.gov ). These
risk factors also expressly qualify all forward-looking statements
contained in this announcement and should be considered by the
reader. Each forward-looking statement speaks only as of the
date of this announcement, July 30, 2015. Neither Royal Dutch Shell
plc nor any of its subsidiaries undertake any obligation to
publicly update or revise any forward-looking statement as a result
of new information, future events or other information. In light of
these risks, results could differ materially from those stated,
implied or inferred from the forward-looking statements contained
in this announcement.
We may have used certain terms, such as resources, in this
announcement that the United States Securities and Exchange
Commission (SEC) strictly prohibits us from including in our
filings with the SEC. U.S. investors are urged to consider closely
the disclosure in our Form 20-F, File No 1-32575, available on the
SEC website http://www.sec.gov . You can also obtain this form from
the SEC by calling 1-800-SEC-0330.
July 30, 2015
The information in this Report reflects the unaudited
consolidated financial position and results of Royal Dutch Shell
plc. The information in this Report also represents Royal Dutch
Shell plc's half-yearly financial report for the purposes of the
Disclosure and Transparency Rules of the UK Financial Conduct
Authority. As such: (1) the interim management report can be found
on pages 2 to 7 and 15 to 18; (2) the condensed set of financial
statements on pages 8 to 15; and (3) the directors' responsibility
statement on page 19 and the auditors' independent review on page
20. Company No. 4366849, Registered Office: Shell Centre,
London, SE1 7NA, England, UK.
Contacts:
- Investor Relations: International +31-(0)70-377-4540;
North America +1-832-337-2034
- Media: International +44-(0)207-934-5550; USA
+1-713-241-4544