Shell Exploration Production More Upstream Profitable Downstream The

Shell Exploration & Production More Upstream, Profitable Downstream The 2005 EP Roadmap to realising the strategy

Where we are now: 2004 full year figures Copyright 2005 SIEP B. V. Shell Exploration & Production l 2005 half year update Active in 30+ counties around the world l ~ 12 bln boe proved reserves l 3, 772 thousand b/d equity production ------ 3, 684 thousand b/d l Earnings $9 billion ---------------- $5. 7 blillion l Capital investment of $9. 9 billion ------- $5. 1 billion l Total operating cost of $ 7. 2 billion l Debt adjusted cashflow of $ 16. 4 billion The World’s 3 rd largest IOC

The Shell Strategy More Upstream, Profitable Downstream Shell’s 2004 Capital Investment demonstrates the commitment to EP’s contribution to delivering the strategy. 2004 Capital Investment $14. 9 bln $ bln (100%) Half Year Update: on track for $15 bln 10 8 Copyright 2005 SIEP B. V. Shell Exploration & Production 6 4 2 0 EP GP Shaping the portfolio to match the strategy OP CH

Realising the Strategy in EP. . . Higher Upside Where we want to be Portfolio today Copyright 2005 SIEP B. V. Shell Exploration & Production • Robust cash generation • Leader in Gas • Lower proved reserves life • Existing Oil • New Material Oil • More Integrated Gas • More Unconventional Oil Portfolio Action Exploration & New Positions Project Delivery, Operational Excellence, Competitive Costs

. . . requires setting Priorities today And our six EP Business Priorities: 1. RRR at least 100% over 2004 – 2008 2. Production 3. 5 - 3. 8 mln boe/d in 2005/6 3. Grow resource base 4. Effective Project Delivery 5. Operational Excellence 6. Competitive Cost Structure Copyright 2005 SIEP B. V. Shell Exploration & Production SAFETY TAKES PRIORITY Deepening professionalism – inspiring our people

Accountabilities for ensuring global targets are met EP Business Priority 1. RRR at least 100% over 2004– 8 3. Grow our resource base – Working the maturation funnel John Darley Regional EVP Forum: Tom Botts (Chair), Copyright 2005 SIEP B. V. Shell Exploration & Production Growth Leadership Forum: Brinded (Chair), John Darley Simon Henry 5. Operational Excellence Malcolm 3. Grow our resource base – Aggressive Exploration and NBD – Reshaping the portfolio 4. Effective Project Delivery 6. Competitive Cost Structure

… Responsibility for delivery unchanged Delivering each Priority Copyright 2005 SIEP B. V. Shell Exploration & Production Regional EVP’s Matthias Bichsel Guy Outen 1. Regional proved reserve addition targets 2. Regional production targets 3. Regional HC maturation targets 4. Value delivery of projects against GIP 5. Drive delivery of performance improvements 6. Delivery of operating cost targets 3. Grow our resource base – Aggressive Exploration – Working the (front part of the) maturation funnel 3. Grow our resource base – Aggressive NBD – Reshaping the portfolio

Copyright 2005 SIEP B. V. Shell Exploration & Production So, how do we contribute?

Safety takes priority Safety is, and will ALWAYS remain, a priority In the event of conflict, safety takes precedence Copyright 2005 SIEP B. V. Shell Exploration & Production Everyone can and must contribute to this priority and the relentless pursuit of improvement.

Safety takes priority HOW l Copyright 2005 SIEP B. V. Shell Exploration & Production Common global processes and standards l Winning “Hearts and Minds” of staff, contractors & suppliers l Visible leadership And, we will focus on contractor safety as we move into big new frontier development projects

Business Priority 1 RRR average 100% over 2004 -2008 Copyright 2005 SIEP B. V. Shell Exploration & Production A significant driver of long-term value for the Group and a key business goal in the planning cycle HOW: l Get staff back to development activities l Increase Petroleum Engineering resources l Focus on proved reserves in the business planning cycle l Accelerate new project FIDs l Treat proved reserves bookings as projects

Business Priority 2 Production 3. 5 – 3. 8 mln boe/d in 2005/6 HOW l Flawless start up l Single global total reliability process l Top quartile uptime l Improved drilling performance l Best practice sharing l Extra production-generating opex New Volumes Other Field decline 4. 0 Production mln boe/d Copyright 2005 SIEP B. V. Shell Exploration & Production The biggest single contributor to Group financial success in the short-term Divestments hurricanes PSC Half year update: 3. 6 b/d 3. 8 2005 -6 Target Range 3. 6 3. 5 3. 4 2003 2004

Business Priority 3 Grow the Resource base HOW l Aggressive exploration & new business development l Accelerate the maturation funnel l Reshaping the portfolio Hydrocarbon resources and development Includes oil sands Excludes Sakhalin minority interests No change in overall resource base Difficult scope e. g. further volumes in Sakhalin, Kazakhstan, Nigeria, oil sands, Asia Pacific gas Producible resources, bln boe Copyright 2005 SIEP B. V. Shell Exploration & Production Growth of our overall hydrocarbon resource base is key in the coming 3 -5 years 40 Longer-term scope e. g. Kashagan Phase-2, Go. M Perdido, Brazil Deepwater, Nigeria Deepwater, Athabasca Jackpine mine FID by end 2009 20 Onstream by end 2009 e. g. Bonga, Erha, Holstein, Qatar, Deimos, Ormen Lange, Sakhalin, Kashagan 66 Onstream by end 2004 0 Short-term Medium-term Long-term

Business Priority 4 Effective Project Delivery to ensure medium/longer term production growth l Bring projects onstream to unlock 13 bln boe by 2009 l Effective project delivery – on time, on budget – is key l Compliance (OPMG) + Competence + Contracting effectiveness Shell Exploration & Production 2009 Outlook 3. 8 – 4. 0 mln boe/d ~5% Copyright 2005 SIEP B. V. ~15% 2014 Aspiration 4. 5 – 5. 0 mln boe/d 10 – 15% ~40% ~25% ~20% 40 – 45% ~40% Existing Oil New Material Oil Unconventional Oil Integrated Gas

Business Priority 5 Operational Excellence Maximise cashflow from existing operations to support growth plans Operational excellence, focused on production operations, technical integrity and well delivery, is key in this. Copyright 2005 SIEP B. V. HOW l Focus on fundamentals l Top quartile performance l Globalisation, standardisation and simplification 7 Mixed Product Fields 6 5 $/boe Shell Exploration & Production Regional Benchmarking: eg GOM Operating Costs 4 3 2 1 0 Shell Source : Ziff 2003

Business Priority 6 Competitive Cost Structure HOW Clear accountabilities • Budget control • Supply chain management • Reducing complexity Copyright 2005 SIEP B. V. Shell Exploration & Production • $ bln Our cost base has increased – partly by external circumstances, partly by choice - but good cost management is essential 9 8 7 6 5 4 3 2 1 0 2002 2003 2004 2005 TGT

Copyright 2005 SIEP B. V. Shell Exploration & Production Supporting the priorities

Deepening professionalism – inspiring our people Build pride in Shell and trust in leaders Strong business results and an exciting work environment • Resource the business – 1300 new staff in 2005 • Expand technical career ladders, extend job tenure Copyright 2005 SIEP B. V. Shell Exploration & Production • Improve coaching and development • Simplify CBD, Progression and MOR • More frequent two-way engagement Business direction & performance • Enterprise First behaviours • Employee Value Proposition & Shell People Survey • Half year update: 50% recruited

One Scorecard Simplifies and reinforces Enterprise First: l TSR reflects EP profitability and growth l Cash reflects EP volumes and cost control l EP TRCF within SD measure l Production within Operational Excellence Connects directly with EP Weighting Copyright 2005 SIEP B. V. Shell Exploration & Production Weighting EP-Production kboe/d 40% GP-LNG Sales 10% 30% OP-Refinery Downtime % 40% 20% Chemicals-Cap. Utilisation % 10% Relative TSR 25% Cash $ bln 25% Operational Excellence Sustainable Development

Copyright 2005 SIEP B. V. Shell Exploration & Production EP Dashboard

Strengthening performance management Roll-up and corrective actions Performance Management ECMB Copyright 2005 SIEP B. V. Shell Exploration & Production Decision Forums EPLT members Regions, Global businesses, Functions Report Cascade l Strengthened mandate of the Decision Forums l Focused quarterly performance reviews up to ECMB and EPLT members

In summary l Copyright 2005 SIEP B. V. Shell Exploration & Production Reserves recategorisation now behind us l We can be positive about the future l Delivering on the priorities is key to delivering on our strategy Safety takes Priority 1. RRR 100% 2. Production 2005/6 3. Grow the Resource Base 4. Project Delivery 5. Operational Excellence 6. Competitive Cost Structure We have a long term strategy We have clear priorities We know how we must contribute to delivering them both