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CONFIDENTIAL
Shell Refining Company (Federation of Malaya) Berhad
Investors Briefing
3rd July 2014
1
CONFIDENTIAL
DISCLAIMER The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this presentation “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 presentation 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 “joint ventures” and companies over which Shell has significant influence but neither control nor joint control are referred to as “associates”. In this presentation, joint ventures and associates may also be referred to as “equity-accounted investments”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect (for example, through our 23% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.
This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections 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 presentation, 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 presentation 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 20-F for the year ended December 31, 2012 (available at www.shell.com/investor and www.sec.gov ). These risk factors also expressly qualify all forward looking statements contained in this presentation and should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, [insert date]. 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 presentation.
We may have used certain terms, such as resources, in this presentation that 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 www.sec.gov. You can also obtain these forms from the SEC by calling 1-800-SEC-0330.
2
SHELL MALAYSIA DOWNSTREAM - REFINING
RM200m jetty completed in 1991
SRC Sports Club
Refinery
• Every day, some 125,000 barrels of crude oil are processed
• We produce world-class gasoline, diesel, heating oils, aviation fuel, lubricants and bitumen
• 90% of refined products are sold in Malaysia
• Listed on the Main Board, with 51% Shell interest
5CONFIDENTIAL
REFINERY TECHNOLOGY
RM200m jetty completed in 1991
• Long Residue Catalytic Cracker came on-stream in July 1999 - reduced Malaysia’s imports of petroleum and produced higher export value products like propylene.
• Project Hijau Gasoil Solution in 2013 –constructed and commissioned a new diesel processing unit including:
• new diesel hydrodesulphurisation unit, Shell Claus Offgas Treating unit
• amine regeneration unit and sour water stripper unit
• revamp of the existing sulphur recovery unit
Hijau had enabled the processing of a wider range of crude oil.
Diesel production had increase, and improved refinery margins.
6CONFIDENTIAL
REFINERY – BRIEF HISTORY
RM200m jetty completed in 1991
1963 1967 1974 1982 1988 1991 1993 1999
New 20 kbbl/dayHydroskimmingRefinery
New 20 kbbl/dayHydroskimmingRefinery
Debottleneckto 30 kbbl/d
Debottleneckto 30 kbbl/d
CD No. 2... 75 kbbl/d
CD No. 2... 75 kbbl/d
Platformer IIMogas trebled
Platformer IIMogas trebled
Debottleneck to 90 kbbl/d
Debottleneck to 90 kbbl/d
New JettyNew Jetty
Debottleneckto 105 kbbl/d
Debottleneckto 105 kbbl/d
LRCCU Complex... 125 kbbl/d
LRCCU Complex... 125 kbbl/d
1963 1967 1974 1982 1988 1991 1993 1999
New 20 kbbl/dayHydroskimmingRefinery
New 20 kbbl/dayHydroskimmingRefinery
Debottleneckto 30 kbbl/d
Debottleneckto 30 kbbl/d
CD No. 2... 75 kbbl/d
CD No. 2... 75 kbbl/d
Platformer IIMogas trebled
Platformer IIMogas trebled
Debottleneck to 90 kbbl/d
Debottleneck to 90 kbbl/d
New JettyNew Jetty
Debottleneckto 105 kbbl/d
Debottleneckto 105 kbbl/d
LRCCU Complex... 125 kbbl/d
LRCCU Complex... 125 kbbl/d
• Principal Activities : Refining and Manufacturing of Petroleum
• Incorporated in Malaysia on 19th September 1960
• Listed in the Main Board of KLSE on 29th October1962 with 25% Malaysian
public participation. Current public participation is 49%
• Paid up capital of RM 300 Million • Turnover of RM 14 Billion (as per 2013 audited results)
• In 1999, completed RM1.4 Billion investment in Malaysia’s first Long Residue
Catalytic Cracker (LRCC) with significant value to the Company operations
•In 2013, completed RM800 million investment on new diesel
processing unit “Hijau”
2013
New diesel processing
unit “HIJAU”
7CONFIDENTIAL
CONFIDENTIAL 03 July 2014
Awards
• Prime Minister’s Hibiscus Award• Malaysian Society of Occupational Safety and Health Grand Award• Shell Group EVP Manufacturing Awards
8
CONFIDENTIAL
External Benchmarking – 2012 Solomon Fuels Analysis
ASIA/PACIFIC/INDIAN OCEAN
FUELS REFINERY PERFORMANCE ANALYSIS
1st Quartile 2nd Quartile 3rd Quartile 4th Quartile
Process
Volume Expansion Index
Energy
EII®
Personnel
Personnel Cost Index, US $/EDC
Maintenance Information
Maintenance Index, US$/EDC
Mechanical Availability, %
Cash Operating Expenses
Non-Energy, US $/EDC
SRCPD’s position in GOC1 (Asia Pac excl Middle east)
SRCPD’s position in Asia Pac Excluding Japan group 11
CONFIDENTIAL 03 July 2014
Sustaining Business Continuity
� “DRIVE” – Deliver Robust Integrated Value Enhancement
� People – Embed One Team actions and nurture Commercial
Mindset
12
CONFIDENTIAL 03 July 2014
Challenging Refining Environment
� Refining margins continue to face a tough market environment with
high crude prices and weak product demand
Dec-13
14
CONFIDENTIAL 03 July 2014
DATED-DUBAI DIFFERENTIALUSD/bbl (Dated-Dubai)
AVG 2007
AVG 2008
AVG 2009
AVG 2010
Jan-11
Feb-11
Mar-11
Apr-11
May-11Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11Dec-11
Jan-12
Feb-12
Mar-12
Apr-12May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14Feb-14Mar-14
0
20
40
60
80
100
120
140
-1
1
3
5
7
9
-3 2 7 12 17 22 27 32 37 42 47
Dated - Dubai Dated Brent
16
USD/bbl (Dated Brent)
CONFIDENTIAL
SRC REFINERY INTAKE – SOURCES OF SUPPLY
2013 YTD March 2014
Malaysia
54%
Far East,
Australia &
Africa
(excluding
Malaysia)
31%
Middle East
16%
2012
17
CONFIDENTIAL
(High sulphur)
SRC TURNOVER BY PRODUCT
Maximised Gasoil production to take advantage of high Gasoil prices
2013 YTD March 2014
18
CONFIDENTIAL
Q&A?
Contact details:Ms. Cecilia Ng Finance ManagerTel: +606-6471311Fax: +606-6479658Email: [email protected]
19