TIDMRDSA TIDMRDSB 
 
   The Hague, September 30, 2020 - This is an update to the third quarter 
2020 outlook provided in the second quarter results announcement on July 
30, 2020. The impacts presented here may vary from the actual results 
and are subject to finalisation of the third quarter 2020 results. 
 
   Unless otherwise indicated, presented impacts relate to Adjusted 
Earnings on a post-tax basis. 
 
   INTEGRATED GAS 
 
 
   -- Production is expected to be between 820 and 860 thousand barrels of oil 
      equivalent per day. 
 
   -- LNG liquefaction volumes are expected to be between 7.9 and 8.3 million 
      tonnes. 
 
   -- Trading and optimisation results are expected to be below average. 
 
   -- A one-off tax charge is expected to have a negative impact on Adjusted 
      Earnings in the range of $100 to $200 million, no cash impact is expected 
      in the third quarter. 
 
   -- Approximately 80% of our term sales of LNG in 2020 have been oil price 
      linked with a price-lag of up to 6 months. Consequently, lower realised 
      prices due to this price-lag are expected to have a significant impact on 
      LNG margins in the third quarter. 
 
   -- CFFO can be impacted by margining resulting from movements in the forward 
      commodity curves up until the last day of the quarter. Margining inflows 
      are expected to be in line with the second quarter 2020. 
 
 
   UPSTREAM 
 
 
   -- Production is expected to be between 2,150 and 2,250 thousand barrels of 
      oil equivalent per day, which includes a production impact of 60 to 70 
      thousand barrels of oil equivalent per day from hurricanes in the US Gulf 
      of Mexico. 
 
   -- Realised liquids prices in the first two months of this quarter reflected 
      a 15 to 20 percent discount to Brent, similar to the discount in the 
      second quarter 2020. Realised gas prices are trending in line with Henry 
      Hub. 
 
   -- Depreciation is expected to be at a similar level as in the second 
      quarter 2020. 
 
   -- Similar to the second quarter 2020, while Adjusted Earnings are expected 
      to show a loss, CFFO is not expected to reflect equivalent cash tax 
      effects due to the build-up of deferred tax positions in a number of 
      countries. 
 
 
   OIL PRODUCTS 
 
 
   -- Refinery utilisation is expected to be between 64% and 68%. 
 
   -- Realised gross Refining margins are expected to be significantly lower 
      compared with the second quarter 2020. 
 
   -- Sales volumes are expected to be between 4,000 and 5,000 thousand barrels 
      per day. 
 
   -- Trading and optimisation results are expected to be lower than the 
      historical average and significantly lower compared with the second 
      quarter 2020. 
 
   -- Marketing margins are expected to be significantly higher compared with 
      the second quarter 2020. 
 
   -- Compared with the second quarter 2020, Adjusted Earnings are expected to 
      be negatively impacted by $200 to $400 million due to higher volume 
      driven activity, phasing of maintenance activities and provisions. 
 
   -- A one-off deferred tax benefit is expected to have a positive impact on 
      Adjusted Earnings of around $100 million, no cash impact is expected in 
      the third quarter. 
 
   -- Working capital movements are typically impacted by movements between the 
      quarter opening and closing price of crude along with changes in 
      inventory volume. Inventory volumes are expected to be lower compared 
      with the end of the second quarter 2020, impacting working capital 
      positively. 
 
   CHEMICALS 
 
 
   -- Chemicals manufacturing plant utilisation is expected to be between 79% 
      and 83%. 
 
   -- Chemicals sales volumes are expected to between 3,700 and 4,000 thousand 
      tonnes. 
 
   -- Compared with the second quarter 2020, Adjusted Earnings are expected to 
      be negatively impacted by around $100 million due to increased activity, 
      provisions and phasing of maintenance activities. 
 
   CORPORATE 
 
 
   -- Corporate segment Adjusted Earnings are expected to be a net expense at 
      the lower end of the $800 to $875 million range for the third quarter. 
      This excludes the impact of currency exchange effects. 
 
   OTHER 
 
 
   -- As per previous disclosures, CFFO price sensitivity at Shell Group level 
      is estimated to be $6 billion per annum for each $10 per barrel Brent 
      price movement. 
 
          -- Note that this price sensitivity is indicative and is most 
             applicable to smaller price changes than those in the current 
             environment and in relation to the full-year results. This 
             excludes the short-term impacts from working capital movements and 
             cost-of-sales adjustments. 
 
   -- Post-tax impairment charges in the range of $1.0 to $1.5 billion are 
      expected for the third quarter. Impairment charges are reported as 
      identified items. 
 
   Consensus 
 
   The consensus collection for quarterly Adjusted Earnings and CFFO 
excluding working capital movements, managed by VARA research, is 
scheduled to be opened for submission on 8 October 2020, closed on 21 
October 2020, and made public on 22 October 2020. 
 
   Recent publications 
 
   Two recent news publications are highlighted below. They do not to 
impact the third quarter 2020 results. 
 
 
   -- In an interview published today, Ben van Beurden, Chief Executive Officer 
      of Royal Dutch Shell, discusses how Shell has responded to the COVID-19 
      pandemic, explains the drive behind the enhanced ambition to be a 
      net-zero emissions energy business, and outlines the direction of the 
      ongoing restructuring of Shell's ways of working and organisation. 
      Specifically, the simpler, streamlined and lower-cost organisation will 
      focus on: 
 
          -- Upstream providing strong and resilient cash generation, focused 
             on accelerating value; 
 
          -- reducing the Refining footprint to less than 10 sites, keeping 
             those sites that are strategically essential in key locations, 
             with flexibility to adapt and further integrate with the growing 
             Chemicals and Trading businesses; 
 
          -- Integrated Gas having a larger focus on unlocking new and 
             expanding existing LNG markets and furthering customer-led energy 
             solutions; and 
 
          -- a customer-focused organisation, providing lower and zero carbon 
             solutions through the Integrated Power, Biofuels and Hydrogen 
             businesses that are significant, competitive, and complement 
             existing businesses like Marketing. 
 
 
   Reduced organisational complexity, along with other measures, are 
expected to deliver sustainable annual cost savings of between $2.0 to 
$2.5 billion by 2022. This will partially contribute to the announced 
underlying operating cost reduction of $3.0 to $4.0 billion by the first 
quarter 2021. Job reductions of 7,000 to 9,000 are expected (including 
around 1,500 people who have agreed to take voluntary redundancy this 
year) by the end of 2022. 
 
   The full interview is available here: https://www.shell.com/reshape 
 
 
   -- Our Shell Scenarios team considered the implications of choices societies 
      could make while living with COVID-19 and explored what this might mean 
      for energy demand and the energy transition. Explore the Rethinking the 
      2020s publication here: https://www.shell.com/rethinking 
      https://www.shell.com/rethinkingthe2020s the 
      https://www.shell.com/rethinkingthe2020s 2020 
      https://www.shell.com/rethinkingthe2020s s 
      https://www.shell.com/rethinkingthe2020s 
 
 
   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 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, September 30, 2020. 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. 
 
   Scenarios don't describe what will happen, or what should happen, rather 
they explore what could happen. We base them on plausible assumptions 
and quantification, and they are designed to stretch management's 
thinking and even to consider events that may only be remotely possible. 
Scenarios, therefore, are not intended to be predictions of likely 
future events or outcomes or a strategy. Investors should not rely on 
them when making an investment decision with regard to Royal Dutch Shell 
plc securities. 
 
   LEI number of Royal Dutch Shell plc: 21380068P1DRHMJ8KU70 
 
 
 
 

(END) Dow Jones Newswires

September 30, 2020 02:15 ET (06:15 GMT)

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