More Upstream, Profitable Downstream The 2005 EP Roadmap to realising the strategy

1. More Upstream, Profitable Downstream The 2005 EP Roadmap to realising the strategy

2. Where we are now: • Active in 30+ counties around the world • ~ 12 bln boe proved reserves • 3,772 thousand b/d equity production ------ 3,684 thousand b/d • Earnings $9 billion ------------------------------- $5.7 blillion • Capital investment of $9.9 billion ------------- $5.1 billion • Total operating cost of $ 7.2 billion • Debt adjusted cashflow of $ 16.4 billion The World’s 3rd largest IOC 2005 half year update 2004 full year figures

3. The Shell Strategy • More Upstream, Profitable Downstream 2004 Capital Investment $14.9 bln$ bln (100%)Half Year Update: on track for $15 bln Shell’s 2004 Capital Investment demonstrates the commitment to EP’s contribution to delivering the strategy. 10 8 6 4 2 0 EP GP OP CH Shaping the portfolio to match the strategy

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

5. . . . requires setting Priorities today • SAFETY TAKES PRIORITY • And our six EP Business Priorities: • RRR at least 100% over 2004 – 2008 • Production 3.5 - 3.8 mln boe/d in 2005/6 • Grow resource base • Effective Project Delivery • Operational Excellence • Competitive Cost Structure Deepening professionalism – inspiring our people

6. Regional EVP Forum: Tom Botts (Chair), • Growth Leadership Forum: Malcolm Brinded (Chair), • John Darley 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 • 5. Operational Excellence • 3. Grow our resource base • Aggressive Exploration and NBD • Reshaping the portfolio • 4. Effective Project Delivery Simon Henry • 6. Competitive Cost Structure

7. 3. Grow our resource base • Aggressive Exploration • Working the (front part of the) maturation funnel • Matthias Bichsel • 3. Grow our resource base • Aggressive NBD • Reshaping the portfolio • Guy Outen … Responsibility for delivery unchanged Delivering each Priority • 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 • Regional EVP’s

8. So, how do we contribute?

9. Safety takes priority • Safety is, and will ALWAYS remain, a priority • In the event of conflict, safety takes precedence Everyone can and must contribute to this priority and the relentless pursuit of improvement.

10. Safety takes priority HOW • Common global processes and standards • Winning “Hearts and Minds” of staff, contractors & suppliers • Visible leadership • And, we will focus on contractor safety as we move into big new frontier development projects

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

12. Business Priority 2 • Production 3.5 –3.8 mln boe/d in 2005/6 • The biggest single contributor to Group financial success in the short-term HOW • Flawless start up • Single global total reliability process • Top quartile uptime • Improved drilling performance • Best practice sharing • Extra production-generating opex Other New Volumes DivestmentshurricanesPSC Field decline 4.0 Half year update: 3.6 b/d 3.8 3.8 2005-6 Target Range Production mln boe/d 3.6 3.5 3.4 2004 2003

13. 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 Longer-term scope 40 e.g. Kashagan Phase-2, GoM Perdido, Brazil Deepwater, Nigeria Deepwater, Athabasca Jackpine mine Producible resources, bln boe FID by end 2009 e.g. Bonga, Erha, Holstein, Qatar, Deimos, Ormen Lange, Sakhalin, Kashagan66 Onstream by end 2009 20 Onstream by end 2004 Short-term Medium-term Long-term 0 Business Priority 3 • Grow the Resource base • Growth of our overall hydrocarbon resource base is key in the coming 3-5 years • HOW • Aggressive exploration & new business development • Accelerate the maturation funnel • Reshaping the portfolio

14. 2009 Outlook 3.8 – 4.0 mln boe/d 2014 Aspiration 4.5 – 5.0 mln boe/d ~5% 10 – 15% ~15% ~25% ~40% ~20% 40 – 45% ~40% Business Priority 4 • Effective Project Delivery to ensure medium/longer term production growth • Bring projects onstream to unlock 13 bln boe by 2009 • Effective project delivery – on time, on budget – is key • Compliance (OPMG) + Competence + Contracting effectiveness Existing Oil New Material Oil Unconventional Oil Integrated Gas

15. 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. • HOW • Focus on fundamentals • Top quartile performance • Globalisation, standardisation and simplification Regional Benchmarking: eg GOM Operating Costs 7 Mixed Product Fields 6 5 4 $/boe 3 2 Shell 1 0 Source : Ziff 2003

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

17. Supporting the priorities

18. 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 • 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

19. One Scorecard • Simplifies and reinforces Enterprise First: • TSR reflects EP profitability and growth • Cash reflects EP volumes and cost control • EP TRCF within SD measure • Production within Operational Excellence Connects directly with EP

20. E X A M P L E EP Dashboard

21. Strengthening performance management • Roll-up and corrective actions • Performance Management • ECMB • Strengthened mandate of the Decision Forums • Focused quarterly performance reviews up to ECMB and EPLT members • Decision Forums • EPLT members • Regions, Global businesses, Functions • Report • Cascade

22. Safety takes Priority  • RRR 100% • Production 2005/6 • Grow the Resource Base  • Project Delivery • Operational Excellence • Competitive Cost Structure In summary • Reserves recategorisation now behind us • We can be positive about the future • Delivering on the priorities is key to delivering on our strategy We have a long term strategy We have clear priorities We know how we must contribute to delivering them both

23. With 6.5 cm 4 cm from the top