ExxonMobil
Royal Dutch Shell
Aranzazu Guisuraga
José Madrona
Urszula Fernández Kolczak
UBI, December 12th 2003
Agenda
ƒ Past
Historical background
ƒ Present
Companies profiles, KIT
ƒ Future
Snapshot in 10 years
Companies History
Standard Oil Co
NJ
1883 selling sea shells
Standard Oil Co
NY
1896 Royal Dutch
Competing British
1892 Start exporting Oil
1882 Standard Oil Trust
1911 Standard Oil Trust
Spin-off
1907 Royal Dutch/Shell Group
since then in the oil
& petrochemical.
business.
34 companies
1966 Mobil Oil Corp.
1972 Exxon Corp.
1998/99 Exxon Mobil Corp.
Source: Royal Dutch Shell &
ExxonMobil corporate web sites
Corporate Mission
ExxonMobil
To provide quality petroleum and
petrochemical products and
services in the most efficient and
responsible manner to generate
outstanding customer and
shareholder value.
Royal Dutch Shell
To manufacture, supply, trade and
market oil and chemical products
for the good of our customers,
employees, shareholders and the
country.
We aim to be the customer’s top
performer of first choice-always.
We strive for excellence in the
provision of quality products and
services to our customers at
competitive terms.
We operate safely, ethically and
with regard for the environment.
This is our highest priority.
In the conduct of our business, we
are committed to the highest
standards in safety and
occupational health and to the
protection of the environment.
Structure
ExxonMobil
Royal Ducth
Petroleum Company
Technology
Shell Transport
and
Trading Company
60%
40%
Upstream
Exploration & Production
Exploration & Production
Gas & Power
Downstream
Refining & Marketing
Chemicals
Chemicals
Oil Productions
Renew. & Other
BU Spread worldwide
BU Spread worldwide
Senior Management Profile
ExxonMobil
Royal Dutch Shell
Corporate Structure
Group Managing Directors
Committee of Managing Directors
Lee R. Raymond
Chairman and CEO
(will retire shortly)
Vice Presidents:
Edward G. Galante
(Exxon)
Harry J. Longwell
(Exxon)
Rex W. Tillerson
(Exxon)
Sir Philip Watts
Jeroen van der Veer
Chairman of Shell TTC
President of RDPC
Judy Boynton
Malcolm Brinded
Rob Routs
Walter van de Vijver
Similarities:
very high % of executives with engineering background,
and with carrier path within the parent company
Differences:
Shell possess high number of female top executives
(11 out of 55)
Corporate image: CSR Turtle and Tiger
Lee Raymond: "We do not now have sufficient
scientific understanding of climate change to make
reasonable predictions and/or justify drastic measures…
Some reports in the media link climate change to
extreme weather and harm to human health. Yet
experts see no such pattern.“
Phillip Watts: "we can't wait to
answer all questions on global
warming beyond reasonable doubt",
… "there is compelling evidence that
climate change is a threat".
4 points on the climate change governance
checklist
14 points (out of 14) on the CCGC
it is the power behind
Bush‘s throne
June 2002: shareholders action 20.3 % vs. 8.9
% in 2001) votes for renewables
November 2002: $100 million/10 year support
to Global Climate and Energy Project
Source: MORI research 1997
Financial resume
Net Income
20
15
$ Bill. 10
Exxon
Shell
5
0
2000
2001
2002
%of Net Income dedicated to exploration
% of Net Income dedicated to R&D
15
6
10
4
Exxon
5
0
Shell
2000
2001
2002
Exxon
2
0
Shell
2000
Source of information: Exxon 2002 Annual Report & Shell 2002 Annual Report
2001
2002
Global Presence
economical reasons:
Cameroon, Gabon,
Morocco
upstream
political reasons:
Iran, Pakistan
downstream
historical reasons:
Surinam
chemicals
Source:
www.exxonmobil.com
Shell Annual Report 2002
Branding
• Shell: unique branding
• Exxon Mobil: differentiate branding
ƒBrand Preference Analysis
(1)
First preference:
Second preference:
Shell 10
Other 13
Other 19
BP 6
Texaco 1
Mobil 0
Shell 30
Esso 4
Esso 3
BP 2
Texaco 6
Source: The Shell Report 2002
Mobil 6
Downstream: the Refiner and the Marketer
Marketing Sales (2001)
ƒ
ƒ
ƒ
ƒ
ƒ
ƒ
Refinery cover (2001)
Nine multinational integrated oil companies supply 40 % of the world’s oil
products, but the global spread varies
About a third of today’s demand and the fastest growing part is in countries
where the majors don’t yet have a substantial presence
Exxon Mobil is the largest refiner (7% of global capacity)
Shell’s strategy assumes relatively low refinery cover
Shell is the largest marketer (9 % of sales), but with low profitability in USA
Current trend and future challenges:
ƒ
ƒ
Clean fuels (EU: 0-S in 2011) => capital investments, loss in productive capacity
Hypermarkets entering the distribution
Petrochemicals
Exxon Mobil
RD Shell
Size as % of Group
Total
Net Fixed Assets
12%
11%
Technological
Focus
ƒ„cracker-end“
„ close to the
refinery gate“
Targeted 10%
growth
Streamline and
reduce
(40 %
diversification)
Growth Strategy
(monomer capacity
55% of total)
ƒ technology
licensing portfolio
Source: Merrill Lynch, Global Octane October 2002
Upstream: Key Issues
ƒ Increasing of production costs
ƒ Biggest companies tends to
consolidate
ƒ Tendencies to M&A
ƒ Replacement of findings
ƒ Deepwater & oil sands Æ Key
Price ($/BOE) TIER 1 Group
6
4
2
0
1998
1999
ƒ OPEC quota constrains
ƒ Gas growth expected to be higher than oil
ƒ EU focused on gas growth
ƒ USA focused on oil production
Source of information: Merrill Lynch: Global Octane 2002/23 Octubre & Wall Stree Journal Europe
2000
2001
Deepwater
Deepwater Reserves Under Development
80
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
percentage
10
8
6
4
2
0
1996
Percentage
Growth of Deepwater share in Oil Production
Geographic Split Deepwater Volumes, 2001
Others
12%
West Africa
35%
Brazil
22%
GoM
31%
Source of information: Merrill Lynch: Global Octane 2002/23 Octubre
60
40
Exxon
20
Shell
0
-20 0
2
4
6
Angola, Nigeria, R Africa, GoM,Brazil
Geographic Split of Deepwater Volumes, 2005
Brazil
32%
West Africa
39%
GoM
29%
LNG
GROWTH IN NATURAL GAS DEMAND
Forecast LNG Demand Growth
mpta
80
225
200
175
150
125
100
75
50
25
0
70
Middle
EastAfrica
60
50
Latin
America
Asia
40
30
Europe
20
10
1990
1995
2000A
2005E
2010E
US
0
2000
2005
2010
2015
2020
Source: Merril Lynch, Global Octane October 2002
Locations
Actual
Future
Exxon
Indonesia,,Qatar, Lybia
Russia, Australia
Nigeria, Yemen
Shell
Oman, Nigeria, Brunei, Malaysia,
Australia,
Russia, Venezuela
9Strengths:
" A grow ing role for natural gas", ExxonMobil Corp. 2003
Actual and Forecasted Prodcution in 2006
million t pa
30
25
20
•Easy transportation for long distance supply.
15
•Growth rate: 2000-2020: 6% p.a.
•The largest growing hydrocarbon fuel
10
9Historical markets: Japan(50%) and AP.
5
9Emerging markets: Europe, US, China, India.
0
RDS
BP
9Historic Supply: Asia
9New Supplying countries: Middle East and Russia Source: Merril Lynch-Global Octane October 2002
Net Planned'06
Net Existing
TFE
XOM
Oil Sands
Oil Sands Production
as % of Total WW BOE
Production
300000
80%
200000
bpd
100%
60%
100000
40%
0
Suncor
20%
Imperial Oil
Conoco
Philips
Shell
Canada
Source: Web site Canada Ministry of Energy
0%
SU
IMO
RD/SC
XOM
Remaining Ultimate Recoverable Reserves
Source: Merril Lynch, Global Octane, October 2002
350
300
Sources&Future:
•Cold Lake (12%)-100% Imperial Oil (Exxon subsidiary)
•Peace River (8%)-Shell
•New Players 2006: Total Fina Elf.
billion barrels
• Athabasca (80%)-Shell Canada (60% in Syncrude)
250
200
150
100
50
0
Canada Conventional Oil
Saudi Arabia
Canada Oil Sands
Source: Merril Lynch, Global Octane, October 2002
Renewable Energy Sources
1990-2000 Annual Growth
30
24
% p.a.
25
21
20
14
15
10
4
5
4
0.9
0.5
n
/w
ce
a
o
so
la
r
th
e
th
er
m
eo
g
av
e
l
rm
a
l
a
ls
io
fu
e
b
as
s
b
io
m
la
r
so
w
in
d
0
Growth Forecast
Shell Solar
160
140
120
Mb/doe
100
80
60
Exxon Mobile
pioneer, but
NOT PRESENT now
20.3 % vote
one of the largest global
solar enterprises
renewables
gas
oil
coal
nuclear
present in 90 countries
40
20
0
-20
2000-20
2000-40
-40
-60
Source: Shell Renewable Corporate Brochure
2000-60
Shell Wind Energy
portfolio of 240 MW
Hydrogen Economy and Fuel Cells
Joint Ventures:
H2 storage
solutions
Fuel Processors
H2 purification
technology
Demonstration:
FCV refuelling projects
USA
Iceland
NL
Japan
Zero emission FC
Siemens Westinghouse
Exploring large
scale applications
CUTE
Statkraft & Aker Kvaerner
Investment Funds:
Ballard, BOC, BASF,
Duke Energy
Mitsubishi, Johnson Matthey
E-Commerce
Shell
founding partner of
(today is the world's only e-procurement marketplace serving
the oil and gas, and chemical industry)
Exxon Mobil
member of
(for petrochemicals, plastics and fuel additives)
GEMS software platform
(to make transactions more efficient)
KIT Analysis (1)
Exposure to Opec
Estimated growth in oil production
Estimated growth in gas production
Average finding and development cost
Reserve replacement Global oils
Worlwide oil equivalent reserves
+
o
+
o
++
o
+
o/o/+
LNG production
LNG location (demandvs. Production)
LNG equipment(ships)
Deepwater investment
Volume growth exposure to deepwater
Operated Deepwaters fields
% of fields in best region (WA)
Oil Sands
+
+
+
++
+
o/+
++
++
++
++
++
++
+
++
+
+
KIT Analysis (2)
Downstreem:Shifting demand patterns
Downstreem:hypermarkets entrance
Downstreem:cleen fuels
+
+
0
++
Renowables
Hydrogen Energy and Fuel Cells
0
+
++
++
M&A
Corporate Responsability
+
-
+
FUTURE in 2014
Economy:
•Increasing dependence on OPEC
•Strong growth in China, A/P.
•Stabilization in Russia.
•Increased demand (2015: 80%)
•Dual currency in oil market: euro &
dollar
•Arabic investments in EU companies
Environment:
•Kyoto ratification
•EU regulations
•NGOs pressure
FUTURE
Politics:
•EU consolidation
•Political stability (Russia,
Middle East, Venezuela)
•Reduce influence of US in
favor of the EU.
Technology:
•Driving Oil sands production.
•Hydrogen and fuel cells
•Shift in the key driver:
•Cost reduction/efficiency.
•IT: lead to seamless business
operations
Exxon Mobile: Snapshot 2014
ƒ Upstream: Diversified portfolio (OPEC):
ƒ 12% deepwater, 10% oil sands, 5% (M&A in Russia), 70% OPEC,
3% others.
ƒ
ƒ
ƒ
ƒ
ƒ
Improved Corporate Image (due to new CEO appointment)
Still lacking the renewables energy focus
Fuel cells leaders
Consolidated operations in China
LNG:
ƒ
ƒ
ƒ
ƒ
ƒ
expanded on E&P in Asia-Pacific
Capitalization on existing sources in North Africa
Among top five on maritime LNG transportation business.
Leaders on supply for US markets.
Second suppliers in EU, after TFE.
ƒ Leaders in E&P technology
Royal Dutch Shell: Snapshot 2014
ƒ Upstream: Diversified portfolio (OPEC):
ƒ 10% deepwater, 4% oil sands, 1% (M&A in Russia), 82%
OPEC, 3% others.
ƒ
ƒ
ƒ
ƒ
Presence in China.
Leaders on hydrogen
Shell Solar and Shell Wind leaders in renewables.
LNG:
ƒ Supply leaders in Asia, India and Japan.
ƒ Leaders on LNG maritime transportation.
ƒ Strong expansion in India.
ƒ State-of-Art technology for E&P
ƒ E-commerce leader
Thank You
Questions?
Global LNG Trading 2001
From
To
Oman
Qatar
US
0.34
0.64
Belgium
-
-
France
-
Greece
Libya
Nig.
Aust.
1.08
0.07
-
0.08
-
-
-
-
0.15
-
0.50
-
-
-
-
-
-
-
-
-
-
-
-
Italy
-
-
-
3.00
-
-
-
-
Portugal
-
-
-
0.26
-
-
-
-
Spain
0.91
0.78
0.77
1.71
-
-
-
-
Turkey
-
-
-
1.20
-
-
-
-
Japan
0.83
8.30
-
-
10.05
8.20
22.74
15.27
South
Korea
5.30
6.67
-
-
0.08
0.80
5.36
3.04
Taiwan
-
-
-
-
-
-
3.70
2.60
Total
Expo
rts
7.43
16.54
0.77
7.83
10.20
9.00
31.80
20.91
-
Source: Cedigaz
Brunei
Indon.
-
Malay.
-
-
Downstream:
oil demand by market phase