Welcome
to
Houston!
ENERGY FOR A CHANGING WORLD
An introduction to Shell
Copyright of Shell International B.V. 06/2011
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Profile
We are active in more than 90 countries
Worldwide, we have 93,000 full-time employees
Our fuel retail network has around 43,000 service stations
In a year, we sell 145 billion litres of fuel to our customers
In 2010 we…
produced 3.3 million barrels of oil equivalent per day;
generated earnings of $20.5 billion;
spent $23.7 billion on net capital investment; and
spent over $1.0 billion on R&D
Royal Dutch Shell plc is listed on the stock exchanges of
Amsterdam, London and New York
Source: 2010 Annual Report and Form 20-F
Copyright of Royal Dutch Shell plc
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OUR BUSINESS ENVIRONMENT
Copyright of Shell
RoyalInternational
Dutch Shell plc
B.V. 06/2011
4
The energy challenge
RISING GLOBAL ENERGY DEMAND
100 = world primary energy demand in 2000
CHANGING ENERGY MIX
Million tonnes of oil equivalent
18,000
200
hig
h
150
hig
h
low
low
16,000
14,000
12,000
10,000
100
8,000
6,000
50
4,000
2,000
0
0
2000
2015
2030
2000
Coal
Oil
Gas
Nuclear
2030
Hydro
Biomass
Other
Source: World Energy Outlook 2009
Copyright of Royal Dutch Shell plc
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Shell in the U.S.
 Shell has significant oil and gas production in the U.S.
 The Gulf of Mexico accounts for 55% of Shell’s U.S.
production or about 250,000 barrels per day.
 With about 1,600 full-time & contract employees in
the Gulf, Shell operates
• six major offshore facilities
• 13 manned platforms
• one spar
• and numerous subsea systems in the GOM.
 Shell has substantial and growing onshore oil gas portfolio
in the U.S.; and is using advances in proven technologies
to tap rich resources like “tight” gas locked in shale
formations
 In the summer of 2012, Shell has plans to explore
offshore Alaska where the resource potential is estimated
to be world-class.
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Shell in the U.S.
 Shell owns and operates three refineries in the U.S. with a combined capacity
of approximately 591,000 barrels per day.
 Motiva, a Shell joint venture, owns and operates three refineries with a
combined capacity of 731,000 barrels per day.
 In addition, Shell has four U.S. plants that manufacture 20 billion pounds of
chemicals annually for industrial use.
 Shell is actively considering a number of projects to use US-produced natural
gas, such as the construction of a new chemical manufacturing facility, a
Gas-To-Liquids (GTL) facility, and micro-LNG plants to support the use of Liquid
Natural Gas (NLG) in the transportation sector.
 Shell is also Involved in eight wind projects in North America.
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2012 US National Oil Bargaining Outcomes
Corporate IR
Internal Communication
03/2011
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8
Topics for Discussion
Background: US Oil Industry Pattern Bargaining
 Context Setting: The Year Leading Up to Negotiations
 Dramatic Events and Volatility
 Significant Economic, Political and Company Changes
 Key Factors Impacting Oil Industry Bargaining
 The USW’s Bargaining Agenda
 The Settlement
 Outcomes
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US Oil Industry Pattern Bargaining History
Prior to 1966, Industry companies bargained with the Union locally and
independently
In 1966, the common expiration date was established which highlighted
the beginning of:
—“Pattern Bargaining”
—“Lead Company” concept
Amoco and Gulf were lead companies from 1966-1997
Shell became Lead Company in 1997 bargaining:
—Extension from 1998-2002
—Contract from 2002-2006
—Extension from 2006-2009
—Contract from 2009-2012
—Contract from 2012 – 2015
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Years Leading Up To Negotiations – Dramatic And Volatile
Events
Nation Budget Woes
Turmoil in the Middle East
Unemployment
Japan Fukushima Daiichi
Nuclear Disaster
Occupy Wall Street
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2011 – US Political Backdrop
NLRB-Boeing fight called evidence of 'jobs blocking
agenda'
State Union Budget Battles
Keystone Pipeline Politics
Congressional Budget Battles
Election Year Primaries
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Key Factors Impacting 2012 Oil Industry Bargaining
Continued USW International Influence
BP Texas City Refinery Explosion
Deteriorating Economic Conditions from 2009 - 2010
Signs of Recovery in 2011
Overcapacity in the Refining business
Labor Movement – Increased Pressure on Public Sector Unions
— States attempting to strip Collective Bargaining rights of Unions
— Unions fight for survival, lowest membership numbers in US history
2012 Presidential & Congressional Elections
—Potential shifts in political power in Congress and possibly the White House
—Negative public perception of the industry (rising gasoline prices and industry profits)
—Democratic Pro Labor National Labor Relations Board (NLRB)
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Centerpieces of 2011-12 USW National Oil Bargaining
Policy
Process Safety
—Strong union effort to convince the public that the industry has not done
enough to address process safety concerns
—Aggressively pursue enforceable Health and Safety language
Wages
—“Substantial Increases”
Health Care
—Strong union effort to resist further cost shifting to the employees they
represent and/or reduction in benefit levels
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National Oil Bargaining Agreement
5:00 p.m. Tuesday, January 31, 2012
2012 National Oil Bargaining
Summary of Significant Settlement Elements
Element
Settlement
Contract Term
3 Years (2/1/2012 – 1/31/2015)
Wage Increases
2.5%, 3.0%, 3.0%
Process Safety
Letter Agreement
Healthcare
80/20 premium sharing
arrangement renewed
No Retrogression
Renewed
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