TIDMRDSA TIDMRDSB 
 
   The Hague, February 11, 2021 - Shell today set out its strategy to 
accelerate its transformation into a provider of net-zero emissions 
energy products and services, powered by growth in its customer-facing 
businesses. A disciplined cash allocation framework and rigorous 
approach to driving down carbon emissions will deliver value for 
shareholders, customers and wider society. Shell also confirmed its 
expectation that total carbon emissions for the company peaked in 2018, 
and oil production peaked in 2019. 
 
   "Our accelerated strategy will drive down carbon emissions and will 
deliver value for our shareholders, our customers and wider society," 
said Royal Dutch Shell Chief Executive Officer, Ben van Beurden. 
 
   "We must give our customers the products and services they want and need 
-- products that have the lowest environmental impact. At the same time, 
we will use our established strengths to build on our competitive 
portfolio as we make the transition to be a net-zero emissions business 
in step with society. 
 
   "Whether our customers are motorists, households or businesses, we will 
use our global scale and trusted brand to grow in markets where demand 
for cleaner products and services is strongest, delivering more 
predictable cash flows and generating higher returns." 
 
   From today, Shell is integrating its strategy, portfolio, environmental 
and social ambitions under the goals of Powering Progress: generating 
shareholder value, achieving net-zero emissions, powering lives and 
respecting nature. Shell's reshaped organisation will deliver on these 
goals through the three business pillars of Growth, Transition and 
Upstream. 
 
   FINANCIAL RESILIENCE AND PROFITABLE GROWTH THROUGH DISCIPLINED CAPITAL 
ALLOCATION 
 
   Shell reiterated its cash priorities to deliver value for shareholders 
today while growing value for tomorrow, including: 
 
 
   -- Maintain the progressive dividend policy, increasing dividend per share 
      by around 4% per year, subject to Board approval. 
 
   -- Retain near-term annual Cash capital expenditure of $19-22 billion. 
 
   -- Reduce net debt to $65 billion. 
 
   -- On reducing net debt to $65 billion, target total shareholder 
      distributions of 20-30% of cash flow from operations; increased 
      shareholder distributions achieved through a combination of Shell's 
      progressive dividends and share buybacks. 
 
   -- Disciplined and measured capital expenditure growth balanced with 
      additional shareholder distributions and further strengthening of our 
      balance sheet. 
 
 
   In the near term we expect to maintain underlying operating expenses of 
no higher than $35 billion, and pursue divestments averaging $4 billion 
a year. Over time the balance of capital spending will shift towards the 
businesses in the Growth pillar, attracting around half of the 
additional capital spend. Cash flow will follow the same trend and in 
the long term will become less exposed to oil and gas prices, with a 
stronger link to broader economic growth. 
 
   THE ROAD TO NET-ZERO EMISSIONS: A COMPREHENSIVE CARBON MANAGEMENT 
APPROACH 
 
   Shell set out details of how it will achieve its target to be a net-zero 
emissions energy business by 2050, in step with society's progress 
towards achieving net zero. This target covers the emissions from our 
operations and the emissions from the use of all the energy products we 
sell. And crucially, it includes emissions from the oil and gas that 
others produce and Shell then sells as products to customers, making the 
target comprehensive. 
 
   Powering Progress supports the most ambitious goal of the Paris 
Agreement on climate change to limit the global temperature rise to 
1.5deg Celsius. To achieve net zero, Shell: 
 
 
   -- will continue with short-term targets that will drive down carbon 
      emissions as we make progress towards our 2050 target, linked to the 
      remuneration of more than 16,500 staff. This includes a new set of 
      targets to reduce our net carbon intensity: 6-8% by 2023, 20% by 2030, 
      45% by 2035 and 100% by 2050, using a baseline of 2016; 
 
   -- expects that its total carbon emissions peaked in 2018 at 1.7 gigatonnes 
      per annum; 
 
   -- confirms that its total oil production peaked in 2019; 
 
   -- will seek to have access to an additional 25 million tonnes a year of 
      carbon, capture and storage (CCS) capacity by 2035. Currently, three key 
      CCS projects of which Shell is a part, Quest in Canada (in operation), 
      Northern Lights in Norway (sanctioned) and Porthos in The Netherlands 
      (planned), will total around 4.5 million tonnes of capacity; 
 
   -- aims to use nature-based solutions (NBS), in line with the philosophy of 
      avoid, reduce and only then mitigate, to offset emissions of around 120 
      million tonnes a year by 2030, with those we use being of the highest 
      independently verified quality; 
 
   -- will work with the Science Based Targets Initiative, Transition Pathway 
      Initiative and others to develop standards for the industry and align 
      with those standards; 
 
   -- starting at the 2021 AGM, submit an Energy Transition Plan for an 
      advisory vote to shareholders, the first in the sector to do so. We will 
      update that plan every three years and seek an advisory vote on the 
      progress made each year. 
 
 
   DELIVERING WITH A PORTFOLIO FOR THE ENERGY TRANSITION 
 
   Shell is a customer-focused organisation, serving more than 1 million 
commercial and industrial customers, and 30 million customers at 46,000 
retail service stations daily. Shell uses its world-leading brand, 
global reach and expertise to be a one-stop shop for both consumer and 
business customers. A presence across the entire energy system means we 
can optimise, scale up, and trade products in a way that develops 
markets, drives down costs, and will help accelerate the energy 
transition. 
 
   Shell's aim is to build material low-carbon businesses of significant 
scale by the early 2030s. Upstream will continue to deliver vital energy 
supplies, which will help to generate the cash and returns needed to 
fund shareholder distributions while accelerating investment in the 
growth businesses to capture new market opportunities. 
 
   In the near term, Shell's strategy will rebalance its portfolio, 
investing annually $5-6 billion in its Growth pillar (around $3 billion 
in Marketing; $2-3 billion in Renewables and Energy Solutions), $8-9 
billion in its Transition pillar (around $4 billion Integrated Gas; $4-5 
billion Chemicals and Products) and around $8 billion in Upstream. Plans 
include: 
 
   Growth: 
 
   Marketing 
 
   Target to increase Adjusted Earnings to around $6 billion by 2025 (from 
$4.5 billion in 2020), achieved by improving the already market-leading 
position of the lubricants business, an increase to 40 million customers 
at 55,000 retail sites (from 30 million at 46,000 sites today) and 
growth of global electric vehicle (EV) network from more than 60,000 
charge points today to around 500,000 by 2025. 
 
   Low-carbon fuels -- extend our leading biofuels production and 
distribution business, which in 2019 sold more than 10 billion litres of 
biofuels. Our joint venture Raízen, which produces low-carbon fuels 
from sugar cane in Brazil, recently announced the acquisition of Biosev. 
This is set to increase Raízen's bioethanol production capacity by 
50%, to 3.75 billion litres a year, around 3% of global production. 
 
   Renewables and Energy Solutions 
 
   Integrated Power -- aim to sell some 560 terawatt hours a year by 2030 
which is twice as much electricity as we sell today. We expect to serve 
more than 15 million retail and business customers worldwide. We aim to 
be a leading provider of clean Power-as-a-Service. We will make our 
investments go further by partnering with others with the emphasis for 
Shell being on managing clean electrons. 
 
   Nature-based solutions -- expect to invest around $100 million a year in 
high-quality, independently verified projects on the ground to build a 
significant and profitable business to help customers meet their 
net-zero emissions targets. 
 
   Hydrogen -- build on Shell's leading position in hydrogen by developing 
integrated hydrogen hubs to serve industry and heavy-duty transport, aim 
to achieve double-digit share of global clean hydrogen sales. 
 
   Transition: 
 
   Integrated Gas 
 
   Extend leadership in liquefied natural gas (LNG) volumes and markets, 
with selective investment in competitive LNG assets to deliver more than 
7 million tonnes per annum of new capacity on-stream by middle of the 
decade. Continue to support customers with their own net-zero ambitions, 
with leading offers such as carbon-neutral LNG. 
 
   Chemicals and Products 
 
   Transform our refinery footprint from 13 sites today to six high-value 
Chemicals and Energy Parks and reduce production of traditional fuels by 
55% by 2030. Intention to grow volumes of the chemicals portfolio and 
increase cash generation from Chemicals by $1-2 billion a year by 2030 
compared with the medium term. Will produce chemicals from recycled 
waste, known as circular chemicals, and by 2025 aim to annually process 
1 million tonnes a year of plastic waste. 
 
   Upstream: 
 
   Focus on value over volume, being simpler and more resilient, continuing 
to provide material cash flow into the 2030s.  An expected gradual 
reduction in oil production of around 1-2% each year, including 
divestments and natural decline. 
 
   CONTACTS 
 
   Media International: +44 (0) 207 934 5550 
 
   Media Americas: +1 832 337 4355 
 
   CAUTIONARY NOTE 
 
   The companies in which Royal Dutch Shell plc directly and indirectly 
owns investments are separate legal 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 Royal Dutch Shell plc and its subsidiaries in 
general or to those who work for them. These terms are also used where 
no useful purpose is served by identifying the particular entity or 
entities. "Subsidiaries", "Shell subsidiaries" and "Shell companies" 
as used in this announcement refer to entities over which Royal Dutch 
Shell plc either directly or indirectly has control. Entities and 
unincorporated arrangements over which Shell has joint control are 
generally referred to as "joint ventures" and "joint operations", 
respectively. Entities 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 an entity or 
unincorporated joint arrangement, after exclusion of all third-party 
interest. This announcement contains the following forward-looking 
Non-GAAP measures: Adjusted Earnings, Cash capital expenditure, 
Underlying operating expenses, and Divestment proceeds. We are unable to 
provide a reconciliation of the above forward-looking Non-GAAP measures 
to the most comparable GAAP financial measures because certain 
information needed to reconcile the above Non-GAAP measure to the most 
comparable GAAP financial measure is dependent on future events some 
which are outside the control of the company, such as oil and gas prices, 
interest rates and exchange rates. Moreover, estimating such GAAP 
measures consistent with the company accounting policies and the 
required precision necessary to provide a meaningful reconciliation is 
extremely difficult and could not be accomplished without unreasonable 
effort. Non-GAAP measures in respect of future periods which cannot be 
reconciled to the most comparable GAAP financial measure are calculated 
in a manner which is consistent with the accounting policies applied in 
Royal Dutch Shell plc's financial statements. 
 
   Also, in this announcement we may refer to Shell's "Net Carbon 
Footprint", which includes Shell's carbon emissions from the production 
of our energy products, our suppliers' carbon emissions in supplying 
energy for that production and our customers' carbon emissions 
associated with their use of the energy products we sell. Shell only 
controls its own emissions. The use of the term Shell's "Net Carbon 
Footprint" is for convenience only and not intended to suggest these 
emissions are those of Shell or its subsidiaries. It is important to 
note that as of February 11, 2021, Shell's operating plans and budgets 
do not reflect Shell's Net-Zero Emissions target. Shell's aim is that, 
in the future, its operating plans and budgets will change to reflect 
this movement towards its new Net-Zero Emissions target. However, these 
plans and budgets need to be in step with the movement towards a Net 
Zero Emissions economy within society and among Shell's customers. 
 
   This announcement contains forward-looking statements (within the 
meaning of the U.S. Private Securities Litigation Reform Act of 1995) 
concerning the financial condition, results of operations and businesses 
of Royal Dutch Shell. All statements other than statements of historical 
fact are, or may be deemed to be, forward-looking statements. 
Forward-looking statements are statements of future expectations that 
are based on management's current expectations and assumptions and 
involve known and unknown risks and uncertainties that could cause 
actual results, performance or events to differ materially from those 
expressed or implied in these statements. Forward-looking statements 
include, among other things, statements concerning the potential 
exposure of Royal Dutch Shell to market risks and statements expressing 
management's expectations, beliefs, estimates, forecasts, projections 
and assumptions. These forward-looking statements are identified by 
their use of terms and phrases such as "aim", "ambition", "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; (m) risks associated with the impact of 
pandemics, such as the COVID-19 (coronavirus) outbreak; and (n) changes 
in trading conditions. No assurance is provided that future dividend 
payments will match or exceed previous dividend payments. 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, 2019 (available at www.shell.com/investor and 
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, February 11, 2021. 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. Investors are 
urged to consider closely the disclosure in our Form 20-F, File No 
1-32575, available on the SEC website www.sec.gov. 
 
   LEI number of Royal Dutch Shell plc: 21380068P1DRHMJ8KU70 
 
 
 
 
 
 
 
 

(END) Dow Jones Newswires

February 11, 2021 02:15 ET (07:15 GMT)

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