Royal Dutch Shell plc: 2nd Quarter 2009 Unaudited Results

LONDON, July 30 /PRNewswire-FirstCall/ --

- Royal Dutch Shell's (NYSE: RDS.A; NYSE: RDS.B) second quarter 2009
earnings, on a current cost of supplies (CCS) basis, were $2.3 billion
compared to $7.9 billion a year ago. Basic CCS earnings per share
decreased by 70% versus the same quarter a year ago.

- Cash flow from operating activities for the second quarter
2009 was $0.9 billion, including $3.6 billion of cash contributions to
pension plans and a $2.8 billion increase in working capital.

- Net capital investment for the quarter was $7.8 billion.
Total cash returned to shareholders in the form of dividends was $2.9
billion.

- A second quarter 2009 dividend has been announced of $0.42
per share, an increase of 5% over the US dollar dividend per share for
the same period in 2008.

Summary of unaudited results

Quarters $ million Six Months
Q2 2009 Q1 2009 Q2 2008 %(1) 2009 2008 %

2,089 2,169 6,857 Upstream(2) 4,258 13,197
(273) 1,018 933 Downstream (CCS basis)(3) 745 2,328
Corporate and Minority
524 110 112 interest 634 153
2,340 3,297 7,902 -70 CCS earnings 5,637 15,678 -64
Estimated CCS adjustment
for Downstream(3)
1,482 191 3,654 (see Note 2) 1,673 4,961
Income attributable to
3,822 3,488 11,556 -67 shareholders 7,310 20,639 -65
Basic CCS earnings per
0.38 0.54 1.28 -70 share ($) 0.92 2.54 -64
Estimated CCS adjustment
0.24 0.03 0.59 per share ($) 0.27 0.80
Basic earnings per
0.62 0.57 1.87 -67 share ($) 1.19 3.34 -64
Dividend per
0.42 0.42 0.40 +5 ordinary share ($) 0.84 0.80 +5

(1) Q2 on Q2 change

(2) Exploration & Production, Gas & Power and Oil Sands earnings.

(3) Oil Products and Chemicals earnings.

Key features of the second quarter 2009
Royal Dutch Shell Chief Executive Officer Peter Voser commented:
"Our second quarter results were affected by the weak global economy.
This weakness is creating a difficult environment both in Upstream and
Downstream.
"Energy demand is weak. There is excess capacity in the market, and
industry costs remain high.
"Conditions are likely to remain challenging for some time, and we are
not banking on a quick recovery. Shell is adapting to this new situation, and
we must do more. We are sharpening our focus on delivery and affordability.
"We are in the middle of a programme to build 1 million barrels of oil
equivalent per day (boe) of additional Upstream capacity, with selective
Downstream investment.
"New production start-ups in the first half 2009, at Sakhalin II in
Russia, and Parque das Conchas (BC-10) in Brazil are important milestones in
the delivery of this strategy.
"This is the most competitive programme in our industry, and managing
affordability in today's climate is a key priority for Shell.
"Taking new steps to reduce our costs, combined with Shell's financing
capabilities, allows us to continue with our investments for medium term
shareholder value, despite today's tough market conditions.
"Shell has a number of initiatives underway to reduce costs. Through a
combination of self-help, reduced supply-chain costs, and lower discretionary
spending, we have reduced operating costs by $0.7 billion in the first half
2009, compared to the first half 2008. This reduction excludes the impact of
exchange rate movements and non-cash pension costs. We expect to reduce 2010
organic capital spending by over 10% compared to 2009 levels, to around $28
billion.
"A new restructuring programme - called 'Transition 2009' - which we
announced in June, will be completed by the end of this year. This will
simplify Shell, and increase personal accountabilities. The top 600
management positions in the new organisation have been announced. This has
enabled us to reduce the number of senior management positions by 20%, and
substantial further staff reductions are likely.
"Looking beyond 2009, Shell needs to become a more efficient company,
with faster decision-making, sharper implementation of strategy, and more
focus on costs and value. The 'Transition 2009' programme is the beginning of
that change.
"Further out, beyond 2012, we have an industry-leading Upstream option
set that can deliver growth to 2020. In addition, we continue to find new
fields through exploration. The 6 notable discoveries in the first half of
2009 contribute to at least 0.7 billion boe of new resources potential.
"We are keeping our pre-FID options warm, but managing affordability and
profitability are key priorities.
"The industry outlook remains a challenging one, despite the rally in oil
prices in recent months. We are taking steps to improve our performance, to
bridge the company, and our shareholders, into a period of significant growth
in the coming years."
Summary of unaudited results

Quarters $ million Six Months
Q2 2009 Q1 2009 Q2 2008 %(1) 2009 2008 %

1,334 1,697 5,881 Exploration & Production 3,031 11,024
705 514 625 Gas & Power 1,219 1,573
50 (42) 351 Oil Sands 8 600
(255) 1,092 1,075 Oil Products (CCS basis) 837 2,269
(18) (74) (142) Chemicals (CCS basis) (92) 59
548 133 201 Corporate 681 347
(24) (23) (89) Minority interest (47) (194)
2,340 3,297 7,902 -70 CCS earnings 5,637 15,678 -64

(1) Q2 on Q2 change

Key features of the SECOND quarter 2009 (continued)
Second quarter 2009 CCS earnings were $2,340 million, 70% lower than in
the same quarter a year ago.
Second quarter 2009 reported earnings were $3,822 million compared to
earnings of $11,556 million in the same quarter a year ago.
Basic CCS earnings per share decreased by 70% versus the same quarter a
year ago.
Total cash returned to shareholders in the form of dividends in the
second quarter 2009 was $2.9 billion.
Cash flow from operating activities for the second quarter 2009 was $0.9
billion, compared to $4.2 billion in the same quarter last year. Excluding
cash contributions to pension plans of $3.6 billion and net working capital
movements of $2.8 billion, cash flow from operating activities was $7.4
billion in the second quarter 2009, compared to $16.1 billion, on the same
basis, for the second quarter 2008.
Capital investment for the second quarter 2009 was $8.1 billion. Net
capital investment (capital investment, less divestment proceeds) for the
second quarter 2009 was $7.8 billion.
Return on average capital employed (ROACE), on a reported income basis
(see Note 3), was 8.3%.
Gearing was 12.6% at the end of the second quarter 2009 versus 5.0% at
the end of the second quarter 2008.
Oil and gas production, including oil sands production, for the second
quarter 2009 was 2,960 thousand barrels of oil equivalent per day (boe/d).
Security in Nigeria remains a significant challenge. Excluding the impact of
the security situation in Nigeria, divestments, production sharing contracts
(PSC) pricing effects and OPEC quota restrictions, production was broadly
similar to the same quarter last year.
Liquefied Natural Gas (LNG) sales volumes of 2.89 million tonnes were 6%
lower than in the same quarter a year ago. Excluding the impact of the
security situation in Nigeria, LNG sales volumes were 7% higher than in the
same quarter last year.
Oil Products marketing sales volumes were 4% lower than in the second
quarter 2008. Excluding the impact of divestments, marketing sales volumes
decreased by 3%. Chemical product sales volumes in the second quarter 2009
decreased by 17% compared to the second quarter 2008.
Oil Products refinery availability was 95% compared with 92% in the
second quarter 2008. Chemicals manufacturing plant availability was 88%, 7%
lower than in the second quarter 2008. Oil Sands upgrader availability was
88% compared to 96% in the same quarter last year.
Summary of identified items
Earnings in the second quarter 2009 reflected the following items, which
in aggregate amounted to a net charge of $810 million (compared to a net
charge of $677 million in the second quarter 2008), as summarised in the
table below:
Exploration & Production earnings included a net charge of $109 million,
reflecting a charge of $389 million related to the mark-to-market valuation
of certain UK gas contracts and a charge of $19 million related to a
retirement healthcare plan modification in the USA. These charges were partly
offset by a gain related to a lease litigation settlement of $229 million and
a divestment gain of $70 million. Earnings for the second quarter 2008
included a net gain of $98 million.
Gas & Power earnings included a charge of $6 million related to a
retirement healthcare plan modification in the USA. Earnings for the second
quarter 2008 included a charge of $300 million.
Oil Products earnings included a charge of $611 million, reflecting
charges related to the estimated fair value accounting of commodity
derivatives of $450 million (see Note 7), an asset impairment of $120 million
and a charge of $41 million related to a retirement healthcare plan
modification in the USA. Earnings for the second quarter 2008 included a net
charge of $269 million.
Chemicals earnings included a charge of $67 million, reflecting an
impairment charge of $57 million and $10 million related to a retirement
healthcare plan modification in the USA. Earnings for the second quarter 2008
included a net charge of $206 million.
Corporate earnings included a charge of $17 million related to a
retirement healthcare plan modification in the USA.
Summary of Identified items (1)

Quarters $ million Six Months
Q2 2009 Q1 2009 Q2 2008 2009 2008
Segment earnings impact of
identified items:
(109) 345 98 Exploration & Production 236 32
(6) (15) (300) Gas & Power (21) (311)
- - - Oil Sands - -
(611) (186) (269) Oil Products (CCS basis) (797) (269)
(67) (19) (206) Chemicals (CCS basis) (86) (206)
(17) 162 - Corporate 145 -
- - - Minority interest - -
(810) 287 (677) CCS earnings impact (523) (754)

(1) As from the second quarter 2009, the summary of identified
items includes the estimated fair value accounting of commodity
derivatives related to operational activities (see Note 7). For
comparison purposes, the first quarter 2009 was reclassified by a
charge of $50 million in the Oil Products segment. The second
quarter 2008 was reclassified by a charge of $300 million in the
Gas & Power segment and by a charge of $450 million in the Oil
Products segment.

These identified items generally relate to events with an impact of more
than $50 million on Royal Dutch Shell's earnings and are shown to provide
additional insight into its segment earnings, CCS earnings and income
attributable to shareholders. Further additional comments on the business
segments are provided in the section 'Earnings by business segment' on page 5
and onwards.
Earnings by business segment

Exploration & Production

Quarters $ million Six Months
Q2 2009 Q1 2009 Q2 2008 %(1) 2009 2008 %

1,334 1,697 5,881 -77 Segment earnings 3,031 11,024 -73

Crude oil production
1,569 1,639 1,711 -8 (thousand b/d) 1,604 1,733 -7
Natural gas production
available for sale
7,614 9,751 7,789 -2 (million scf/d) 8,676 8,772 -1
Barrels of oil equivalent
2,882 3,321 3,054 -6 (thousand boe/d)(2) 3,100 3,246 -4

(1) Q2 on Q2 change

(2) Excludes oil sands bitumen production

Second quarter Exploration & Production segment earnings were $1,334
million compared to $5,881 million a year ago. Earnings included a net charge
of $109 million related to identified items, compared to a net gain of $98
million in the second quarter 2008 (see page 4 for details).
Earnings compared to the second quarter 2008 reflected the impact of
significantly lower oil and gas prices on revenues, lower oil and gas
production volumes, higher exploration expenses and non-cash pension charges,
which were partly offset by lower royalty and tax expenses.
Although oil prices increased during the quarter, realised natural gas
prices remained at low levels mainly due to contractual lag effects. European
gas demand declined in the second quarter 2009, impacting natural gas
production compared to the second quarter 2008.
Global liquids realisations were 53% lower than in the second quarter
2008. Global gas realisations were 47% lower than a year ago. Outside the
USA, gas realisations decreased by 39% whereas in the USA gas realisations
decreased by 68%.
Second quarter 2009 production (excluding oil sands bitumen production)
was 2,882 thousand boe/d compared to 3,054 thousand boe/d a year ago. Crude
oil production was down 8% and natural gas production was down 2% compared to
the second quarter 2008.
In Nigeria, the security situation remains a significant challenge. As a
consequence, The Shell Petroleum Development Company of Nigeria Ltd's (SPDC)
onshore and shallow water oil and gas production declined from some 210
thousand boe/d (Shell share) in the second quarter 2008 to approximately 120
thousand boe/d (Shell share) in the second quarter 2009.
Underlying production, compared to the second quarter 2008, increased by
some 210 thousand boe/d from new field start-ups and the continuing ramp-up
of fields over the last 12 months, more than offsetting field declines.
Second quarter portfolio developments
During the first half of 2009, Shell made 6 notable discoveries in the US
Gulf of Mexico, Australia, Malaysia and Norway. Shell also increased its
overall acreage position through acquisitions of new exploration licences in
Guyana, Italy, Brazil, USA, Norway, Egypt and Jordan.
In Brazil, on July 13, 2009, production started from the multi-field
Parque das Conchas (BC-10) project (Shell share 50%). Production wells, which
are some 2 kilometres deep, are linked to a Floating Production, Storage and
Offloading (FPSO) vessel with a capacity to process 100 thousand barrels of
oil and 50 million cubic feet of natural gas a day (100% basis).
Gas & Power

Quarters $ million Six Months
Q2 2009 Q1 2009 Q2 2008 %(1) 2009 2008 %

705 514 625 +13 Segment earnings 1,219 1,573 -23

LNG sales volumes
2.89 3.06 3.08 -6 (million tonnes) 5.95 6.59 -10

(1) Q2 on Q2 change

Second quarter Gas & Power segment earnings were $705 million compared to
$625 million a year ago. Earnings included a charge of $6 million related to
identified items, compared a charge of $300 million in the second quarter
2008 (see page 4 for details).
Earnings compared to the second quarter 2008 mainly reflected lower LNG
earnings, reduced gas-to-liquids product prices and non-cash pension charges,
which were offset by higher natural gas and power trading contributions.
LNG earnings were lower than in the same quarter last year reflecting the
significant impact of lower oil prices on revenues and lower LNG sales
volumes. These were partly offset by increased contributions from the North
West Shelf (Train 5) and Sakhalin II LNG projects, higher income from LNG
cargo diversion opportunities and the benefit of recent sales contract
renegotiations.
LNG sales volumes of 2.89 million tonnes were 6% lower than in the same
quarter a year ago. Volumes reflected lower contributions from Nigeria LNG
due to continued natural gas supply disruptions and reduced Asia Pacific LNG
demand, which were partly offset by the ramp-up in sales volumes from Train
5, at the North West Shelf project, and the Sakhalin II LNG project.
Excluding the impact of the security situation in Nigeria, LNG sales volumes
were 7% higher than the same quarter last year.
Natural gas and power marketing and trading earnings were higher than in
the same quarter a year ago, reflecting increased contributions from both
Europe and North America.
Oil Sands

Quarters $ million Six Months
Q2 2009 Q1 2009 Q2 2008 %(1) 2009 2008 %

50 (42) 351 -86 Segment earnings 8 600 -99
Bitumen production
78 75 72 +8 (thousand b/d) 76 78 -3
Sales volumes
101 110 104 -3 (thousand b/d) 106 124 -15
88 96 96 Upgrader availability (%) 92 94

(1) Q2 on Q2 change

Second quarter Oil Sands segment earnings were $50 million compared to
$351 million in the same quarter last year.
Earnings compared to the second quarter 2008 mainly reflected the impact
of significantly lower oil prices on revenues and non-cash pension charges.
Bitumen production compared to the same quarter last year increased by
8%. Upgrader availability was 88% compared to 96% in the same quarter last
year.
Oil Products

Quarters $ million Six Months
Q2 2009 Q1 2009 Q2 2008 %(1) 2009 2008 %

(255) 1,092 1,075 Segment CCS earnings 837 2,269 -63
Estimated CCS adjustment
1,418 304 3,464 (see Note 2) 1,722 4,637
1,163 1,396 4,539 Segment earnings 2,559 6,906

Refinery intake
3,136 3,153 3,464 -9 (thousand b/d) 3,144 3,579 -12
Total Oil Products
6,174 6,029 6,642 -7 sales (thousand b/d) 6,102 6,737 -9

95 92 92 Refinery availability (%) 93 92

(1) Q2 on Q2 change

Second quarter Oil Products segment earnings were $1,163 million compared
to $4,539 million for the same period last year.
Second quarter Oil Products CCS segment results were a loss of $255
million compared to earnings of $1,075 million in the second quarter 2008.
Results included a charge of $611 million related to identified items,
compared to a net charge of $269 million in the second quarter 2008 (see page
4 for details).
CCS earnings compared to the second quarter 2008 reflected significantly
lower refining earnings and non-cash pension charges, which were partly
offset by higher marketing contributions.
Marketing earnings increased compared to the same period a year ago
reflecting higher retail, B2B and lubricants earnings and improved trading
contributions.
Oil Products (marketing and trading) sales volumes decreased by 7%
compared to the same quarter last year mainly as a result of reduced global
demand. Marketing sales volumes were 4% lower than in the second quarter
2008. Excluding the impact of divestments, marketing sales volumes decreased
by 3%.
Industry refining margins declined worldwide compared to the same period
a year ago.
Oil Products CCS earnings in the second quarter 2009 reflected refining
losses mainly as a consequence of declining worldwide realised refining
margins and reduced demand for refined products.
Refinery intake volumes decreased by 9% compared to the same quarter last
year. Refinery availability was 95% compared to 92% at the second quarter
2008.

Chemicals

Quarters $ million Six Months
Q2 Q1 Q2 %(1) 2009 2008 %
2009 2009 2008

(18) (74) (142) +87 Segment CCS earnings (92) 59
Estimated
CCS adjustment
121 (108) 299 (see Note 2) 13 446
103 (182) 157 Segment earnings (79) 505
Sales volumes
4,459 4,294 5,396 -17 (thousand tonnes) 8,753 10,855 -19
Manufacturing
88 92 95 plant availability (%) 90 95

(1) Q2 on Q2 change

Second quarter Chemicals segment earnings were $103 million compared to
earnings of $157 million for the same period last year.
Second quarter Chemicals CCS segment results were a loss of $18 million
compared to a loss of $142 million in the same quarter last year. Results
included a charge of $67 million related to identified items, compared to a
charge of $206 million in the second quarter 2008 (see page 4 for details).
CCS earnings compared to the second quarter 2008 reflected lower sales
volumes, lower realised margins, and non-cash pension charges, which were
partly offset by higher income from equity-accounted investments and lower
operating costs.
Sales volumes decreased by 17% compared to the second quarter 2008,
mainly as a result of reduced global demand.
Chemicals manufacturing plant availability was 88%, 7% lower than in the
second quarter 2008. The reduced global demand for chemical products
significantly impacted the chemicals manufacturing plant utilisation rate,
which dropped to 68% from 84% in the second quarter 2008.
Corporate

Quarters $ million Six Months
Q2 2009 Q1 2009 Q2 2008 2009 2008

548 133 201 Segment earnings 681 347

Second quarter Corporate segment earnings were $548 million compared to
$201 million for the same period last year. Earnings included a charge of $17
million related to an identified item (see page 4 for details). Currency
exchange gains in the second quarter 2009 were $379 million compared to $27
million in the second quarter 2008.
Earnings, when compared to the second quarter 2008, mainly reflected
higher currency exchange gains combined with higher net underwriting income
and increased tax credits, which were partly offset by lower net interest
income.
Price and Margin Information

Oil & Gas

Quarters Six Months
Q2 2009 Q1 2009 Q2 2008 2009 2008
Realised oil prices -
Exploration & Production (period
$/bbl average) $/bbl

52.19 42.88 110.96 World outside USA 47.56 101.15
55.25 37.81 118.07 USA 46.62 105.02
52.62 42.16 111.92 Global 47.43 101.70

Realised oil prices - Oil Sands
$/bbl (period average) $/bbl
53.91 37.94 116.20 Canada 45.64 98.12

Realised gas prices
$/thousand scf (period average) $/thousand scf
5.93 9.44 9.38 Europe 7.76 9.19
World outside USA
3.88 5.75 6.31 (including Europe) 4.83 6.09
3.82 4.80 11.89 USA 4.32 10.69
3.87 5.57 7.30 Global 4.74 6.91

Oil and gas marker industry
prices (period average)
59.13 44.46 121.26 Brent ($/bbl) 51.60 108.96
59.71 43.20 123.81 WTI ($/bbl) 51.26 110.83
56.85 40.25 125.18 Edmonton Par ($/bbl) 48.55 111.58
3.67 4.61 11.36 Henry Hub ($/MMBtu) 4.14 9.95
UK National Balancing Point
27.54 46.90 60.41 (pence/therm) 37.22 56.73
Japanese Crude Cocktail - JCC
49.79 44.28 110.35 ($/bbl)(1) 46.48 101.76

Refining & Cracker Industry Margins(2)

Quarters Six Months
Q2 2009 Q1 2009 Q2 2008 2009 2008
Refining marker industry
$/bbl gross margins (period average) $/bbl
6.05 10.65 11.55 ANS US West Coast coking margin 8.30 10.10
7.20 7.90 10.55 WTS US Gulf Coast coking margin 7.55 9.60
1.65 3.00 5.85 Rotterdam Brent complex 2.35 4.70
Singapore 80/20
0.20 2.85 3.95 Arab light/Tapis complex
Cracker industry margins
$/tonne (period average) $ tonne
290.00 352.00 413.00 US ethane 321.00 386.00
239.00 164.00 262.00 Western Europe naphtha 202.00 348.00
(8.00) (67.00) 28.00 North East Asia naphtha (37.00) 18.00

(1) JCC prices for the second quarter 2009 are based on available
market data up to the end of May 2009. Prices for these periods
will be updated when full market data is available.

(2) The refining and cracker industry margins shown above do not
represent actual Shell realised margins for the periods. These are
estimated industry margins based on available market information at
the end of the quarter.

Oil & Gas - Operational data

Quarters Six Months
Q2 2009 Q1 2009 Q2 2008 %(1) 2009 2008 %
thousand b/d Crude oil production thousand b/d
306 361 390 Europe 333 402
256 274 314 Africa 265 318
181 207 196 Asia Pacific 194 202
470 455 434 Middle East, Russia, CIS 463 431
278 275 293 USA 277 297
78 67 84 Other Americas 72 83
Total crude oil
production excluding oil
1,569 1,639 1,711 -8 sands 1,604 1,733 -7
Bitumen production - oil
78 75 72 sands 76 78
Total crude oil
production including oil
1,647 1,714 1,783 -8 sands 1,680 1,811 -7

Natural gas production
million scf/d(2) available for sale million scf/d(2)

2,532 4,762 2,930 Europe 3,641 3,912
256 253 549 Africa 254 584
2,673 2,708 2,512 Asia Pacific 2,691 2,475
402 340 230 Middle East, Russia, CIS 371 231
1,056 1,110 1,096 USA 1,082 1,101
695 578 472 Other Americas 637 469
7,614 9,751 7,789 -2 8,676 8,772 -1

Total production in
thousand boe/d(3) barrels of oil equivalent thousand boe/d(3)

743 1,182 895 Europe 961 1,077
300 318 409 Africa 309 419
642 674 629 Asia Pacific 658 628
539 514 474 Middle East, Russia, CIS 527 471
460 466 482 USA 463 487
198 167 165 Other Americas 182 164
Total production
2,882 3,321 3,054 -6 excluding oil sands 3,100 3,246 -4
Bitumen production - oil
78 75 72 sands 76 78
Total production
2,960 3,396 3,126 -5 including oil sands 3,176 3,324 -4

(1) Q2 on Q2 change

(2) scf/d = standard cubic feet per day; 1 standard cubic foot =
0.0283 cubic metre.

(3) Natural gas converted to oil equivalent at 5.8 million scf/d =
thousand boe/d.

Oil Products and Chemicals - Operational Data

Quarters Six Months
Q2 2009 Q1 2009 Q2 2008 %(1) 2009 2008 %
Refinery processing
thousand b/d intake thousand b/d
Europe
1,360 1,357 1,498 Africa, Asia, 1,359 1,619
612 644 741 Australia/Oceania 628 749
829 794 874 USA 811 859
335 358 351 Other Americas 346 352
3,136 3,153 3,464 -9 3,144 3,579 -12

Oil sales
2,107 1,957 2,067 Gasolines 2,031 2,076
727 718 816 Kerosenes 723 815
2,047 2,046 2,225 Gas/diesel oils 2,047 2,281
572 620 776 Fuel oil 596 807
721 688 758 Other products 705 758

6,174 6,029 6,642 -7 Total oil products * 6,102 6,737 -9

*Comprising:
Europe
1,610 1,645 1,781 Africa, Asia, 1,627 1,870
1,273 1,229 1,276 Australia/Oceania 1,251 1,260
1,368 1,335 1,436 USA 1,352 1,416
690 682 704 Other Americas 686 730
1,233 1,138 1,445 Export sales 1,186 1,461

Chemical sales volumes by
thousand tonnes main product category (2)** thousand tonnes
2,429 2,419 3,061 Base chemicals 4,848 6,180
2,030 1,875 2,335 First line derivatives 3,905 4,675
4,459 4,294 5,396 -17 8,753 10,855 -19

**Comprising:
Europe
1,874 1,782 2,189 Africa, Asia, 3,656 4,478
1,116 1,123 1,294 Australia/Oceania 2,239 2,522
1,414 1,321 1,760 USA 2,735 3,544
55 68 153 Other Americas 123 311

(1) Q2 on Q2 change

(2) Excluding volumes sold by equity-accounted investments, chemical
feedstock trading and by-products.

Note
All amounts shown throughout this Report are unaudited.
Third quarter results are expected to be announced on October 29, 2009.
The companies in which Royal Dutch Shell plc directly and indirectly owns
investments are separate entities. In this document "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 document refer to companies in which Royal Dutch Shell either
directly or indirectly has control, by having either a majority of the voting
rights or the right to exercise a controlling influence. The companies in
which Shell has significant influence but not control are referred to as
"associated companies" or "associates" and companies in which Shell has joint
control are referred to as "jointly controlled entities". In this document,
associates and jointly controlled entities are also 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
34% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell
in a venture, partnership or company, after exclusion of all third-party
interest.
This document 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", "intend", "may", "plan", "objectives", "outlook",
"probably", "project", "will", "seek", "target", "risks", "goals", "should"
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 document, including (without limitation): (a)
price fluctuations in crude oil and natural gas; (b) changes in demand for
the Group's products; (c) currency fluctuations; (d) drilling and production
results; (e) reserve 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 potential litigation and regulatory effects arising from
recategorisation of reserves; (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 document 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 factors that may affect future results
are contained in Royal Dutch Shell's Annual Report and Form 20-F for the year
ended December 31, 2008 (available at www.shell.com/investor and
www.sec.gov). These factors also should be considered by the reader. Each
forward-looking statement speaks only as of the date of this document, July
30, 2009. Neither Royal Dutch Shell 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 document.
The United States Securities and Exchange Commission (SEC) permits oil
and gas companies, in their filings with the SEC, to disclose only proved
reserves that a company has demonstrated by actual production or conclusive
formation tests to be economically and legally producible under existing
economic and operating conditions. We use certain terms in this document that
SEC's guidelines strictly prohibit us from including in 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 http://www.sec.gov. You can
also obtain these forms from the SEC by calling 1-800-SEC-0330. July 30,
2009
Appendix: Royal Dutch Shell financial report and tables

Statement of income (see note 1)

Quarters $ million Six Months
Q2 2009 Q1 2009 Q2 2008 %(1) 2009 2008 %

63,882 58,222 131,419 Revenue(2) 122,104 245,721
55,415 49,245 109,261 Cost of sales 104,660 206,041
8,467 8,977 22,158 -62 Gross profit 17,444 39,680 -56

Selling, distribution and
3,953 3,693 4,444 administrative expenses 7,646 8,413
606 496 408 Exploration 1,102 733
Share of profit of
equity-accounted
1,535 928 2,671 investments 2,463 5,096
Net finance costs and
(400) (18) (140) other (income)/expense (418) (193)
5,843 5,734 20,117 -71 Income before taxation 11,577 35,823 -68

1,940 2,218 8,363 Taxation 4,158 14,868
3,903 3,516 11,754 -67 Income for the period 7,419 20,955 -65

Income attributable to
81 28 198 minority interest 109 316
Income attributable to
Royal Dutch Shell plc
3,822 3,488 11,556 -67 shareholders 7,310 20,639 -65

(1) Q2 on Q2 change

(2) Revenue is stated after deducting sales taxes, excise duties and
similar levies of $19,251 million in Q2 2009, $17,555 million in Q1
2009, $25,462 million in Q2 2008 and $22,920 million in Q1 2008.

Basic earnings per share (SEE NOTES 1, 2 AND 6)

Quarters Six Months
Q2 2009 Q1 2009 Q2 2008 2009 2008
0.62 0.57 1.87 Earnings per share ($) 1.19 3.34
0.38 0.54 1.28 Basic CCS earnings per share ($) 0.92 2.54

Diluted earnings per share (SEE NOTES 1, 2 AND 6)

Quarters Six Months
Q2 2009 Q1 2009 Q2 2008 2009 2008
0.62 0.57 1.87 Earnings per share ($) 1.19 3.33
0.38 0.54 1.28 Diluted CCS earnings per share ($) 0.92 2.53

Earnings by business segment (see notes 2 and 4)

Quarters $ million Six Months
Q2 2009 Q1 2009 Q2 2008 %(1) 2009 2008 %

Exploration & Production:
822 1,753 3,952 -79 - World outside USA 2,575 7,492 -66
512 (56) 1,929 -73 - USA 456 3,532 -87
1,334 1,697 5,881 -77 3,031 11,024 -73

Gas & Power:
620 601 788 -21 - World outside USA 1,221 1,721 -29
85 (87) (163) - - USA (2) (148) -99
705 514 625 +13 1,219 1,573 -23

50 (42) 351 -86 Oil Sands 8 600 -99

Oil Products (CCS basis):
(262) 1,036 765 - - World outside USA 774 1,743 -56
7 56 310 -98 - USA 63 526 -88
(255) 1,092 1,075 - 837 2,269 -63

Chemicals (CCS basis):
127 109 112 +13 - World outside USA 236 416 -43
(145) (183) (254) +43 - USA (328) (357) -8
(18) (74) (142) +87 (92) 59 -

1,816 3,187 7,790 -77 Total operating segments 5,003 15,525 -68

Corporate:
- Interest and investment
25 21 81 income/(expense) 46 191
- Currency exchange
379 (46) 27 gains/(losses) 333 (35)
- Other
144 158 93 - including taxation 302 191
548 133 201 +173 681 347 +96

(24) (23) (89) Minority interest (47) (194)
2,340 3,297 7,902 -70 CCS earnings 5,637 15,678 -64

Estimated CCS adjustment
for Oil Products
1,482 191 3,654 and Chemicals 1,673 4,961

Income attributable
to Royal Dutch Shell
3,822 3,488 11,556 -67 plc shareholders 7,310 20,639 -65

(1) Q2 on Q2 change

Summarised balance sheet (see notes 1 and 5)
$ million
Jun 30, 2009 Mar 31, 2009 Jun 30, 2008

Assets
Non-current assets:
Intangible assets 5,197 4,961 5,336
Property, plant and equipment 121,708 113,255 109,191
Investments:
- equity-accounted investments 29,986 28,516 32,514
- financial assets 4,130 4,092 2,975
Deferred tax 4,144 3,464 4,089
Pre-paid pension costs 9,640 5,575 6,215
Other 8,886 6,976 6,504
183,691 166,839 166,824

Current assets:
Inventories 24,921 21,404 39,624
Accounts receivable 72,529 77,116 127,241
Cash and cash equivalents 10,596 15,961 8,990
108,046 114,481 175,855

Total assets 291,737 281,320 342,679

Liabilities
Non-current liabilities:
Debt 25,469 18,341 11,072
Deferred tax 13,726 12,778 13,994
Retirement benefit obligations 5,787 5,463 6,162
Other provisions 13,259 12,444 14,086
Other 4,619 3,642 4,857
62,860 52,668 50,171

Current liabilities:
Debt 4,621 6,693 5,352
Accounts payable and accrued 76,298 81,554 126,246
liabilities
Taxes payable 10,205 9,849 15,895
Retirement benefit obligations 410 386 419
Other provisions 2,221 2,229 2,687
93,755 100,711 150,599

Total liabilities 156,615 153,379 200,770

Equity attributable to Royal Dutch 133,509 126,434 139,809
Shell plc shareholders

Minority interest 1,613 1,507 2,100
Total equity 135,122 127,941 141,909

Total liabilities and equity 291,737 281,320 342,679

Summarised statement of cash flows (see note 1)

Quarters $ million Six Months
Q2 2009 Q1 2009 Q2 2008 2009 2008

Cash flow from operating
activities:
3,903 3,516 11,754 Income for the period 7,419 20,955
Adjustment for:
2,367 1,844 8,701 - Current taxation 4,211 15,106
370 330 269 - Interest (income)/expense 700 447
- Depreciation, depletion and
3,279 3,090 3,439 amortisation 6,369 6,585
- (Gains)/losses on sale of
(138) (147) (757) assets (285) (1,038)
- Decrease/(increase) in net
(2,835) (365) (11,751) working capital (3,200) (8,967)
- Share of profit of
(1,535) (928) (2,671) equity-accounted investments (2,463) (5,096)
- Dividends received from
equity-accounted
1,242 977 2,447 investments 2,219 4,199
- Deferred taxation and other
(951) 365 (152) provisions (586) 170
(1,931) 141 10 - Other (1,790) 104
Cash flow from operating
3,771 8,823 11,289 activities (pre-tax) 12,594 32,465

(2,852) (1,264) (7,121) Taxation paid (4,116) (11,435)

Cash flow from operating
919 7,559 4,168 activities 8,478 21,030

Cash flow from investing
activities:
(6,806) (5,985) (7,352) Capital expenditure (12,791) (14,781)
Investments in
(1,418) (436) (521) equity-accounted investments (1,854) (1,137)
274 204 2,026 Proceeds from sale of assets 478 2,471
Proceeds from sale of
203 17 272 equity-accounted investments 220 333
Proceeds from sale of
/(additions to) financial
(58) 6 275 assets (52) 285
69 101 269 Interest received 170 554
Cash flow from investing
(7,736) (6,093) (5,031) activities (13,829) (12,275)

Cash flow from financing
activities:
Net increase/(decrease) in debt
with maturity period
(2,046) (3,588) 839 within three months (5,634) (24)
7,044 6,884 131 Other debt: New borrowings 13,928 316
(430) (1,386) (1,479) Repayments (1,816) (2,143)
(262) (262) (369) Interest paid (524) (667)
7 12 34 Change in minority interest 19 27
- - (1,350) Repurchases of shares - (2,423)
Dividends paid to:
- Shareholders of Royal Dutch
(2,852) (2,405) (2,489) Shell plc (5,257) (4,818)
(69) (30) (115) - Minority interest (99) (166)
Treasury shares:
- Net sales/(purchases) and
(49) 136 242 dividends received 87 442
Cash flow from financing
1,343 (639) (4,556) activities 704 (9,456)

Currency translation
differences relating to cash
and
109 (54) (8) cash equivalents 55 35
Increase/(decrease) in cash
(5,365) 773 (5,427) and cash equivalents (4,592) (666)

Cash and cash equivalents at
15,961 15,188 14,417 beginning of period 15,188 9,656

Cash and cash equivalents at
10,596 15,961 8,990 end of period 10,596 8,990

Capital investment
Quarters $ million Six Months
Q2 Q1 Q2 2009 2008
2009 2009 2008
Capital expenditure:
Exploration & Production:
2,300 2,835 3,038 - World outside USA 5,135 5,240
969 801 916 - USA 1,770 3,446
3,269 3,636 3,954 6,905 8,686

Gas & Power:
846 877 1,006 - World outside USA 1,723 1,829
3 3 3 - USA 6 4
849 880 1,009 1,729 1,833

762 749 761 Oil Sands 1,511 1,472

Oil Products:
745 454 862 - World outside USA 1,199 1,318
168 188 68 - USA 356 129
913 642 930 1,555 1,447

Chemicals:
470 367 399 - World outside USA 837 773
62 49 34 - USA 111 68
532 416 433 948 841

63 62 83 Corporate 125 120

6,388 6,385 7,170 Total capital expenditure 12,773 14,399

Exploration expense
165 176 218 - World outside USA 341 353
82 79 86 - USA 161 166
247 255 304 502 519

New equity in equity-accounted
investments
271 160 347 - World outside USA 431 712
9 36 41 - USA 45 46
280 196 388 476 758

1,138 240 133 New loans to equity-accounted 1,378 379
investments

8,053 7,076 7,995 Total capital investment* 15,129 16,055

*Comprising:
3,789 4,191 4,621 - Exploration & Production 7,980 10,060
942 959 1,156 - Gas & Power 1,901 2,081
762 749 761 - Oil Sands 1,511 1,472
1,962 699 934 - Oil Products 2,661 1,470
534 416 439 - Chemicals 950 851
64 62 84 - Corporate 126 121
8,053 7,076 7,995 15,129 16,055

Additional segmental information(1)

Quarters $ million Six Months
Q2 2009 Q1 2009 Q2 2008 2009 2008
Exploration & Production
1,334 1,697 5,881 Segment earnings 3,031 11,024
Including:
606 496 408 - Exploration 1,102 733
- Depreciation, depletion &
1,962 2,073 2,228 amortisation 4,035 4,393
- Share of profit of
813 548 1,103 equity-accounted investments 1,361 2,315

3,237 4,043 8,659 Cash flow from operations 7,280 18,988
Less: Net working capital
709 (901) (374) movements(2) (192) 549
Cash flow from operations
excluding net working capital
2,528 4,944 9,033 movements 7,472 18,439

59,713 55,882 49,185 Capital employed 59,713 49,185

Gas & Power
705 514 625 Segment earnings 1,219 1,573
Including:
- Depreciation, depletion &
80 88 85 amortisation 168 166
- Share of profit of
312 319 620 equity-accounted investments 631 1,204

630 1,724 149 Cash flow from operations 2,354 2,066
Less: Net working capital
(589) 1,030 (845) movements(2) 441 57
Cash flow from operations
excluding net working capital
1,219 694 994 movements 1,913 2,009

23,964 22,169 21,010 Capital employed 23,964 21,010

Oil Sands
50 (42) 351 Segment earnings 8 600
Including:
- Depreciation, depletion &
42 38 45 amortisation 80 89

141 5 645 Cash flow from operations 146 943
Less: Net working capital
(7) (57) 66 movements(2) (64) (36)
Cash flow from operations
excluding net working capital
148 62 579 movements 210 979

8,028 6,763 5,881 Capital employed 8,028 5,881

(1) Corporate segment information has not been included in the table
shown. Please refer to the Earnings by business segment section for
additional information. The above data do not consider minority
interest impacts on the segments.

(2) Excluding working capital movements related to taxation.

Additional segmental information(1) (continued)

Quarters $ million Six Months
Q2 2009 Q1 2009 Q2 2008 2009 2008
Oil Products

(255) 1,092 1,075 Segment CCS earnings 837 2,269
Including:
- Depreciation, depletion &
747 549 609 amortisation 1,296 1,217
- Share of profit of
(4) 89 441 equity-accounted investments 85 708

(1,876) 526 (4,148) Cash flow from operations (1,350) (1,786)
Less: Net working capital
(2,367) (2,113) (9,439) movements(2) (4,480) (9,874)
Cash flow from operations
excluding net working capital
491 2,639 5,291 movements 3,130 8,088

52,353 44,690 63,298 Capital employed 52,353 63,298

Chemicals
(18) (74) (142) Segment CCS earnings (92) 59
Including:
- Depreciation, depletion &
257 159 356 amortisation 416 518
- Share of profit of
187 68 92 equity-accounted investments 255 250

120 (110) 361 Cash flow from operations 10 747
Less: Net working capital 725 (225)
616 109 (216) movements(2)
Cash flow from operations
excluding net working capital
(496) (219) 577 movements (715) 972

10,774 10,096 11,328 Capital employed 10,774 11,328

(1)Corporate segment information has not been included in the table
shown. Please refer to the Earnings by business segment section for
additional information. The above data do not consider minority
interest impacts on the segments.

(2) Excluding working capital movements related to taxation.

Notes
1. Accounting policies and basis of presentation
The quarterly financial report and tables are prepared in accordance with
the accounting policies set out in Note 2 to the Consolidated Financial
Statements of Royal Dutch Shell plc in the Annual Report and Form 20-F for
the year ended December 31, 2008 on pages 118 to 122. The accounting policies
are in accordance with IFRS as adopted by the European Union.
This publication is unaudited and does not comprise statutory accounts.
Statutory accounts for the year ended December 31, 2008 were approved by the
Board of Directors on March 11, 2009 and delivered to the Registrar of
Companies. The report of the auditors on those accounts was unqualified, did
not include a reference to any matters to which the auditors drew attention
by way of emphasis without qualifying the report, and did not contain any
statement under sections 237(2) or (3) of the Companies Act 1985.
2. Earnings on an estimated current cost of supplies (CCS) basis
To facilitate a better understanding of underlying business performance,
the financial results are also analysed on an estimated current cost of
supplies (CCS) basis as applied for the Oil Products and Chemicals segment
earnings. Earnings on an estimated current cost of supplies basis provides
useful information concerning the effect of changes in the cost of supplies
on Royal Dutch Shell's results of operations and is a measure to manage the
performance of the Oil Products and Chemicals segments but is not a measure
of financial performance under IFRS.
On this basis, Oil Products and Chemicals segment cost of sales of the
volumes sold during the period is based on the cost of supplies during the
same period after making allowance for the estimated tax effect, instead of
the first-in, first-out (FIFO) method of inventory accounting. Earnings
calculated on this basis do not represent an application of the last-in,
first-out (LIFO) inventory basis and do not reflect any inventory drawdown
effects.
3. Return on average capital employed (ROACE)
ROACE is defined as the sum of the current and previous three quarters'
income adjusted for interest expense, after tax, divided by the average
capital employed for the period. Components of the calculation are:

$ million Q2 2009 Q2 2008

Income (four quarters) 12,940 36,628
Interest expense after tax 437 752
ROACE numerator 13,377 37,380

Capital employed - opening 158,333 131,846
Capital employed - closing 165,212 158,333
Capital employed - average 161,773 145,090

ROACE 8.3% 25.8%

4. Earnings by business segment
Operating segment results are presented before deduction of minority
interest and also exclude interest and other income of a non-operational
nature, interest expense, non-trading currency exchange effects and tax on
these items, which are included in the Corporate results. Operating segment
results are after tax and include equity-accounted investments.
5. Equity
Total equity comprises equity attributable to shareholders of Royal Dutch
Shell and to the minority interest. Other reserves comprise the capital
redemption reserve, share premium reserve, merger reserve, share plan
reserve, currency translation differences, unrealised gains/(losses) on
securities and unrealised gains/(losses) on cash flow hedges.
$ million Ordinary Treasury Other Retained Total Minority Total
share shares reserves earnings interest equity
capital

At Dec 31, 2008 527 (1,867) 3,178 125,447 127,285 1,581 128,866
Income for the
period - - - 7,310 7,310 109 7,419
Other
comprehensive
income - - 3,882 - 3,882 3 3,885
Capital
contributions/
(repayments)
from/to minority
shareholders and
other changes in
minority interest - - - 3 3 19 22
Dividends paid - - - (5,257) (5,257) (99) (5,356)
Treasury shares:
net
sales/(purchases)
and dividends
received - 234 - - 234 - 234
Repurchases of
shares - - - - - -
Share-based
compensation - - (175) 227 52 - 52
At June 30, 2009 527 (1,633) 6,885 127,730 133,509 1,613 135,122

$ million Ordinary Treasury Other Retained Total Minority Total
share shares reserves earnings interest equity
capital
At Dec 31, 2007 536 (2,392) 14,148 111,668 123,960 2,008 125,968
Income for the
period - - - 20,639 20,639 316 20,955
Other
comprehensive
income - - 1,853 - 1,853 (110) 1,743
Capital
contributions/
(repayments)
from/to minority
shareholders and
other changes in
minority interest - - - 59 59 52 111
Dividends paid - - - (4,818) (4,818) (166) (4,984)
Treasury shares:
net
sales/(purchases)
and dividends
received - 442 - - 442 - 442
Repurchases of
shares (5) - 5 (2,237) (2,237) - (2,237)
Share-based
compensation - - (107) 18 (89) - (89)
At June 30,
2008 531 (1,950) 15,899 125,329 139,809 2,100 141,909

6. Basis for Royal Dutch Shell earnings per ordinary share
The total number of Royal Dutch Shell ordinary shares in issue at the end
of the period was 6,241.5 million. Royal Dutch Shell reports earnings per
share on a basic and on a diluted basis, based on the weighted average number
of Royal Dutch Shell (combined A and B) ordinary shares outstanding. Shares
held in respect of share options and other incentive compensation plans are
excluded in determining basic and diluted earnings per share.
Basic earnings per share calculations are based on the following weighted
average number of shares:
Millions Q2 2009 Q1 2009 Q2 2008

Royal Dutch Shell ordinary
shares of EUR0.07 each 6,126.7 6,121.6 6,170.3

Diluted earnings per share calculations are based on the following
weighted average number of shares. This adjusts the basic number of shares
for all share options currently "in-the-money".
Millions Q2 2009 Q1 2009 Q2 2008
Royal Dutch Shell ordinary
shares of EUR0.07 each 6,129.4 6,124.5 6,189.1

Basic shares outstanding at the end of the following periods are:

Millions Q2 2009 Q1 2009 Q2 2008
Royal Dutch Shell ordinary
shares of EUR0.07 each 6,127.4 6,124.9 6,159.1

One American Depository Receipt (ADR) is equal to two Royal Dutch Shell
ordinary shares.
7. Accounting for derivatives
IFRS require that derivative instruments be recognised in the financial
statements at fair value. Any change in the current period between the
period-end market price and the contract settlement price is recognised in
income where hedge accounting is either not permitted or not applied to these
contracts.
The physical crude oil and related products held by the Downstream
business as inventory are recorded at historical cost or net realisable
value, whichever is lower, as required under IFRS. Consequently, any increase
in value of the inventory over cost is not recognised in income until the
sale of the commodity occurs in subsequent periods.
In the Downstream business, the buying and selling of commodities
includes transactions conducted through the forward markets using commodity
derivatives to reduce economic exposure. Some derivatives are associated with
a future physical delivery of the commodities.
Differences in the accounting treatment for physical inventory (at cost
or net realisable value, whichever is lower) and derivative instruments (at
fair value) have resulted in timing differences in the recognition of gains
or losses between reporting periods.
Similarly, earnings from long-term contracts held in the Upstream
business are recognised in income upon realisation. Associated commodity
derivatives are recognised at fair value as of the end of each quarter.
These differences in accounting treatment for long-term contracts (on
accrual basis) and derivative instruments (at fair value) have resulted in
timing differences in the recognition of gains or losses between the
reporting periods.
The aforementioned timing differences for Downstream and Upstream are
reported as identified items in the quarterly results and are estimates
derived from the overall portfolio of derivatives.
Certain UK gas contracts held by Upstream contain embedded derivatives or
written options, for which IFRS requires recognition at fair value, even
though they are entered into for operational purposes. The impact of the
mark-to-market calculation is also reported as an identified item in the
quarterly results.
SOURCE Royal Dutch Shell plc

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