Event Brief of Royal Dutch/Shell Group of Companies Strategy Presentation & Conference Call (New York) - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

CORPORATE PARTICIPANTS

. Jeroen van der Veer, Royal Dutch Petroleum Company, Chairman of

the CMD and President . Tim Morrison, Royal Dutch/Shell Group of Companies, Acting Director of Finance . Rob Routs, Royal Dutch/Shell Group of Companies, Member of the Board of Management . Malcolm Brinded, Royal Dutch/Shell Group of Companies, Vice-Chairman of the CMD and Managing Director, The Shell Transport and Trading Company, p.l.c. . Linda Cook, Royal Dutch/Shell Group of Companies, Member of the Board of Management

OVERVIEW

RD reported good earnings and cash generation; not only from high energy prices, but also due to good performing assets. RD have increased investment in organic growth to $15b per year and expect $4b of divestments this year. The focus is more Upstream and a profitable Downstream. RD's end 2003 SEC proved reserves were established at 14.4b barrels, yielding a proved reserves to production ratio of 10.2 years. Q&A Focus: price screening, capex, acquisitions, reserves, divestments.

FINANCIAL DATA

A. Key Data From Call 1. Investment in organic growth = $15b per year 2. Expect divestments this year = $4b 3. Dividend this year = $7.5b 4. End 2003 SEC proved reserves = 14.4b barrels 5. Proved reserves to production ratio = 10.2 years 6. Expected Debt Ratio b y year-end = 14-15%

PRESENTATION SUMMARY

S1. Overview (J.V.) 1. Progress: 1. Is about actions and urgency.

2. Driving Shell to be a different company. 3. How to do that:

1. Good earnings and cash; not only high energy prices, but good performing assets. 2. Reserves issues. 3. Structure and culture. 4. Strategy: 1. More Upstream and Profitable Downstream: 2. Need the right portfolio. 5. Three tools:

1. Investment in organic growth - increased to $15b per year;

below $10b in 1990s. 1. Organic growth is logical path forward when energy prices high. 2. Divestments - $20b over past five years; expect about $4b this year. 3. Acquisitions - if they increase shareholder value; difficult when oil prices are high.

6. Raise Performance Bar: 1. Would like top quartile performance; apples-to-apples comparisons. 2. Key capability is to execute multi-billion dollar projects, often in difficult environments.

3. Projects should be on time, on classification, and on-budget.

4. Projects should give good returns and cash generation. 7. Enterprise First Culture: 1. Better on leadership, accountability and teamwork. 2. Helps if co. has simplified organization, with global operating models. 2. Update on Reserves Issue: 1. Restated reserves with SEC. 2. Internal measures implemented; 13 real changes in procedures and organization, external auditors of reserves etc. 3. Significant changes to finance organization. 3. Future:

1. Must think about reserves position vis-a-vis competition.

2. Settled with SEC and FSA; full co-operation with other authorities. 3. Defend class action litigation. 4. Structure and Governance: 1. Issues: 1. Four Key Terms: 1. Better effectiveness. 2. Clear accountability. 3. Transparency. 4. Simplicity.

2. Work is more complicated than expected: 1. Have to ensure preferred option doesn't have unexpected tax consequences. 2. Must be fair and feasible to shareholders. 3. Committed to decision on preferred option in November. 3. Changes already made: 1. Non-executive Chairman in-place. 2. RD will deliver priority shares at next AGM. 3. New executive team in-place; new CFO starts 1 October. 4. Clear accountabilities with CEOs. 5. Business Environment:

1. Think oil and gas price outlook higher than some years ago.

1. Basis of RD thinking: 2. In the coming 25 years, oil industry will grow. 3. Will be reserves to grow; industry won't plateau.

4. Gas growth will exceed oil growth. 5. OPEC share could increase. 6. Industry investment could increase to $200b per year according to IEA. 6. Way Forward: 1. Regain Upstream Strength:

1. Have a lot of good upstream positions. 2. Leaders in LNG. 3. Have to improve reserves. 4. Can improve operational excellence and project delivery. 2. Downstream: 1. Drastic portfolio restructuring actions. 2. Top quartile performance important. 3. Global organization and standardization progressing; gives very good cost positions. 4. Integrating chemical manufacturing with refineries; synergies with hydrocarbons and specialist staff.

3. Financial Underpinning: 1. Strong cash generation at high oil prices. 4. Cash used for: 1. Very high dividends; $7.5b this year. 1. Paid $5.5b dividends only several years ago; increase due to FX. 2. Fund investments. 3. Conservative balance sheet. 4. Buybacks. 5. Important to know where cash breakeven is. 6. Planned co. at $20 per barrel; think that is too low now.

7. Better to plan co. at $25 per barrel. 8. Higher capex level; more in Upstream. 9. EP and GP together total $11.5b. 10. Conservative figures for divestments. 7. Measuring Success: 1. Five key aspects:

1. Earnings or cash returns better than competition. 2. Percentage of assets in top quartile performance. 3. Can reserves be replaced? 4. Has the co. met project milestones? 5. Total shareholder return.

S2. Financial Overview (T.M.) 1. Developments: 1. Restarted share buyback program. 2. Paid down a lot of debt. 3. Funded heavy investment program. 4. Increased dividend. 5. Healthy balance sheet able to fund multi-year program. 6. Balance between current distribution and growing co. 2. Controls: 1. Following reserves program, laid out remedial measures to be carried out; being implemented across co. 2. New and expanded reserves audit team fully operating in central audit unit; using external reserves specialists. 3. Business CFOs now report directly into group CFO.

4. Finance leadership fully up to strength with arrival of new

CFO. 5. Externally mandated changes include Sarbanes-Oxley and International Accounting Standards changes. 6. Sarbanes-Oxley 404 project fully underway; controls assessment at end of 2005.

7. Simplification and standardization programs helping to improve

general controls environment. 8. On-track with International Financial Reporting Standards project. 3. Financial Framework:

1. Performed solidly in 1H04, on top of three years of consistent

earnings from the portfolio. 2. Current portfolio has delivered cash flow growth in each of past three years; continued in 1H04.

3. Helped by high margins and prices; also have good operating

businesses. 4. ROC not as competitive as co. would like, due to: 1. Weaknesses in portfolio. 2. Heavy current spending program; higher level of capital not yet in use than some competitors. 1. Currently around $17-18b; will rise over next 2-3 years, before falling away sharply when large projects come on-stream. 3. Weak dollar drives up costs. 5. Cash generation, including very active portfolio management cash, strong from Upstream and Downstream.

6. Maintained momentum. 4. Future Price and Investment Levels:

1. Think pricing structure has shifted. 1. Partially due to continued buoyancy of higher than expected demand, rising costs of supply, and geopolitical uncertainty. 2. Decided $25 per barrel is right basis for medium term cash planning. 3. Screen projects for viability at $20 per barrel or below. 4. Looking more at the upside above $25 per barrel. 5. In medium term, look to be cash neutral at around $25 per barrel. 6. Connection between high divestment levels and high investment levels.

7. Not liquidating portfolio, but recycling cash into higher

value uses. 8. Increased investment levels to $15b per year, reflects: 1. Growing capital intensity in industry. 2. Dollar cost pressures, from underlying inflation, particularly in the Far East, and dollar weakness. 3. Commitment to major growth projects. 4. Routine investment spend in profitable core business.

9. $11.5b moving into Upstream as portfolio shifts. 5. Divestments:

1. Expect $10-12b of divestments over next three years; includes

divestments announced in 2004. 1. $5b from rationalization in EP. 2. Figure is subject to uncertainty; if out on figure, will probably be more on the upside than the downside. 6. Investment Program: 1. Major part of capex during 2004 going into Upstream projects. 2. Expecting higher returns in Upstream. 3. Over 50% invested in Upstream; up from 40% in 2000. 4. Expect about 75% to be spent in GP and EP projects. 7. Funding Priorities: 1. Grow dividend at least in-line with inflation over time. 2. Invest capital to sustain business; long-life projects aimed at growing profitability over time. 3. Strong balance sheet; expect debt ratio of 14-15% by year end, which is low-end of target range. 4. Strong balance sheet provides resilience, particularly if oil price goes down, for long term projects and short-term,

high-value, projects. 5. If additional cash generated, then consider: 1. Further investment. 2. Buybacks; will complete 2004 program, but priorities haven't changed. 8. Cash Cycle:

1. Cash neutral at $25 per barrel. 2. At $25 per barrel, co. generate $20b DACF per year. 3. Divestments of $10-12b over the period. 4. Cash of $23-24b on this cycle. 5. Option hedging at lower level of $0.5b; not an under-hedging of remuneration programs. 6. Stable debt levels of $23b per year. 7. Flexibility to deal with unexpected increases/decreases in cash generation.

S3. Downstream (R.R.) 1. Developments: 1. Different Downstream than the past; combination of oil products and chemicals.

2. About delivering results and acheiving operational excellence.

3. Getting portfolio right has become a major focus. 4. Differentiation and margin creation very important. 5. Leveraging business to operate on global basis and cross integration. 2. New Set-Up: 1. Used to be a collection of global businesses, then had regional businesses in retail and manufacturing. 2. Organization needs to change to one that is functionally driven. 3. Excellence in manufacturing; 'run the kit' has same procedures across the world. 4. Retail has similar processes. 5. Organization has 140-plus countries and needs to globalize. 6. Many processes can be the same. 7. One leadership team drives business. 8. Functional excellence and discipline. 9. Chemicals has become major part of it; manufacturing now has both chemicals and refineries. 10. Possibilities to look at logistics and supply and combine

those. 3. Good 1H04 Performance: 1. Good cash generation and earnings. 2. Asset performance good. 3. Expanded customer offerings; introduction of Vpower in the US. 4. Cost base important; needs to be addressed. 4. Portfolio actions: 1. Underperforming assets need to be addressed. 2. Non-strategic assets; RD can get more in the market than what it is worth to co. 3. Leverage of global businesses in Oil Products and Chemicals. 5. 1H04 Results:

1. Oil products earnings very good; helped by refining margins.

2. $13b of cash generated; some spent on deals with Texaco etc.

3. Chemicals earnings lower and very volatile. 4. Commodity pricing hasn't been very good over last couple of years; changing now. 5. Since changes made in 1998, in terms of divesting 40% of

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