Royal Dutch Shell plc Shell First Quarter 2021 Update Note

TIDMRDSA TIDMRDSB 
 
   The Hague, April 7, 2021 - This is an update to the first quarter 2021 
outlook provided in the fourth quarter results announcement on February 
4, 2021. The impacts presented here may vary from the actual results and 
are subject to finalisation of the first quarter 2021 results. Unless 
otherwise indicated, presented impacts relate to Adjusted Earnings on a 
post-tax basis. 
 
   The Texas winter storm had an impact on our operations and is expected 
to have an aggregate adverse impact of up to $200 million on Adjusted 
Earnings, individual segmental impacts are further detailed below. 
 
   INTEGRATED GAS 
 
 
   -- Production is expected to be between 920 and 960 thousand barrels of oil 
      equivalent per day. 
 
   -- LNG liquefaction volumes are expected to be between 7.8 and 8.4 million 
      tonnes. 
 
   -- Pre-tax depreciation is expected to be between $1.3 and $1.4 billion. 
 
   -- Trading and optimisation results are expected to be significantly below 
      average. 
 
   -- Approximately 80% of our term sales of LNG in 2020 have been oil price 
      linked with a price-lag of up to 6 months. The volatility of the JKM spot 
      price in January had limited impact on Adjusted Earnings. 
 
   -- Operational and net financial impact from the Texas winter storm is 
      expected to be limited as trading margins are offset by provisions due to 
      related counterparty credit risk. 
 
   -- CFFO is expected to be impacted by a working capital outflow driven by 
      increased receivables reflecting the higher commodity price environment. 
 
   -- CFFO excluding working capital is expected to be not significantly 
      impacted by cash flows related to commodity derivatives. 
 
   UPSTREAM 
 
 
   -- Adjusted Earnings are expected to be positive in the first quarter 2021, 
      capturing the upside from the current commodity price environment. 
 
   -- Production is expected to be between 2,400 and 2,475 thousand barrels of 
      oil equivalent per day, including 10 to 20 thousand barrels per day lower 
      production due to the Texas winter storm. 
 
   -- Total Adjusted Earnings are expected to be adversely impacted by up to 
      $40 million due to operational impacts of the Texas winter storm. 
 
   -- Pre-tax depreciation is expected to be between $3.1 and $3.4 billion. 
 
   -- Currency effects are expected to adversely impact Adjusted Earnings by up 
      to $200 million. 
 
   -- Tax expenses are expected to be between $700 and $1,100 million. 
 
   -- Tax paid is expected to be between $500 and $750 million. 
 
   -- Working capital outflows as expected due to increased receivables 
      reflecting the higher commodity price environment. 
 
   OIL PRODUCTS 
 
 
   -- Refinery utilisation is expected to be between 71% and 75%. Latest 
      refinery crude distillation capacities are provided in the 2020 Annual 
      Report, replacing calendar-day with stream day. 
 
   -- Refining indicative margin is around $2.6/bbl, slightly improved from 
      $1.6/bbl in the fourth quarter 2020. Definition and formula are provided 
      at the end of this release. 
 
   -- Trading and optimisation results are expected to be average and higher 
      than the fourth quarter 2020. 
 
   -- Sales volumes are expected to be between 3,700 and 4,700 thousand barrels 
      per day. 
 
   -- Marketing results are expected to be higher compared with the fourth 
      quarter 2020, as higher margins and lower costs are more than offsetting 
      lower sales volumes. 
 
   -- Pre-tax depreciation is expected to be between $0.9 and $1.1 billion. 
 
   -- Total Adjusted Earnings are expected to be adversely impacted by up to 
      $80 million due to operational impacts of the Texas winter storm. 
 
   -- Working capital outflows are expected due to the higher commodity price 
      environment. 
 
   -- CFFO excluding working capital is expected to be positively impacted by 
      the lower cash cost of sales. 
 
 
   CHEMICALS 
 
 
   -- Chemicals Adjusted Earnings are expected to be positively impacted by 
      improved base margins and slightly higher intermediate margins compared 
      with the fourth quarter 2020. 
 
   -- Chemicals manufacturing plant utilisation is expected to be between 77% 
      and 81%. 
 
   -- Chemicals sales volumes are expected to be between 3,500 and 3,700 
      thousand tonnes. 
 
   -- Pre-tax depreciation is expected to be between $250 and $350 million. 
 
   -- Total Adjusted Earnings are expected to be adversely impacted by around 
      $60 million due to operational impacts of the Texas winter storm. 
 
   -- CFFO is expected to be negatively impacted by $150 to $250 million due to 
      timing effect of dividends received from Joint Ventures & Associates. 
 
 
   CORPORATE 
 
 
   -- Corporate segment Adjusted Earnings are expected to be a net expense of 
      $600 to $700 million for the first quarter. This excludes the impact of 
      currency exchange effects. 
 
 
   Shell enhancing financial disclosures 
 
   At our first quarter 2021 results announcement we are planning to 
provide enhanced voluntary disclosures in a Quarterly Databook, to be 
available on www.shell.com/investors. The disclosures will cover 
Integrated Gas, Upstream, Refining & Trading, Marketing and Chemicals. 
The publication of the enhanced disclosures will be followed by a 
webcast on the 4th of May 2021, with an opportunity for Q&A. 
 
   Full-year price and margin sensitivities 
 
   The Adjusted Earnings and CFFO price and margin sensitivities are 
indicative and in relation to the full-year results. These exclude the 
short-term impacts from working capital movements, cost-of-sales 
adjustments and derivatives. Sensitivity accuracy is subject to trading 
and optimisation performance, including short-term opportunities, 
depending on market conditions. 
 
 
 
 
$ million                              Adjusted Earnings  CFFO 
-------------------------------------  -----------------  ----- 
Integrated Gas 
-------------------------------------  -----------------  ----- 
+$10/bbl Brent                                     1,100  1,200 
-------------------------------------  -----------------  ----- 
+$10/bbl Japan Customs-cleared Crude 
 - 3 months                                        1,100  1,200 
-------------------------------------  -----------------  ----- 
Upstream 
-------------------------------------  -----------------  ----- 
+$10/bbl Brent                                     3,000  4,000 
-------------------------------------  -----------------  ----- 
+$1/mmbtu Henry Hub                                  350    450 
-------------------------------------  -----------------  ----- 
+$1/mmbtu EU TTF                                     150    200 
-------------------------------------  -----------------  ----- 
Refining 
-------------------------------------  -----------------  ----- 
+$1/bbl indicative refining margin     500                -- 
-------------------------------------  -----------------  ----- 
 
 
   Indicative refining margin 
 
   The indicative margin is an approximation of Shell's global net realised 
refining margin, calculated using price and margin markers from third 
parties' databases. It is based on an approximation of Shell's crude 
intake and production from refinery units. The actual margins realised 
by Shell may vary due to factors including specific local market effects, 
refinery configuration, crude diet, operating decisions and production. 
 
   Q1 2021: $2.65/bbl 
 
   Q4 2020: $1.59/bbl 
 
   Q3 2020: $0.84/bbl 
 
   The formula provided will be reviewed and updated annually, reflecting 
any changes in our refining portfolio. 
 
   Calculation formula ($/bbl) - note that brackets indicate a negative 
sign 
 
   Brent*(25%) + MSW*(11%) + LLS*(24.5%) + Dubai*(24.5%) + Urals CIF 
EU*(13%) + NWE Naphtha (RDAM FOB Barge)*8% + NWE Mogas premium 
unleaded*12.50% + NWE Kero*11.50% + NWE AGO*24.5% + NWE Benzene*1% + 
Sing Fueloil 380 cst*6.50% + Edmonton ULG Reg*3.50% + Edmonton 
ULSD*3.50% + USGC Normal Butane*1.50% + USGC LS No 2 Gasoil*7% + USGC 
Natural Gas*(2%) + USGC CBOB*15% + RINS*(20.50%) + NWE Propylene 
Platts*0.50% -- $1.7/bbl 
 
   Consensus 
 
   The consensus collection for quarterly Adjusted Earnings and CFFO 
excluding working capital movements, managed by VARA research, will be 
published on 22 April 2021. 
 
   Contacts 
 
   Media International: [phone] 
 
   Media Americas: [phone] 
 
   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 "Group" 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 the following forward-looking Non-GAAP 
measure: Adjusted Earnings.We are unable to provide a reconciliation of 
these forward-looking Non-GAAP measures to the most comparable GAAP 
financial measures because certain information needed to reconcile the 

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