Strategic

Report
We measure our performance for the year by considering
progress against our longer-term strategy and against our
annual operating plan.
At Capital Markets Day 2023, we announced eight business targets
for reporting progress against our Powering Progress strategy, which
can be found in the section "Progress against our longer-term
business targets".
Performance against our operating plan for 2023 is assessed using
a range of financial and non-financial indicators and can be found
in the section "Performance indicators".
In the "How we create value" section, we show the value that we
have created in 2023 through our business activities for our different
stakeholders and wider society.

2 Chair's message
4 Chief Executive Officer's review
6 Powering Progress strategy
6 Who we are
7 Our strategy
10 How we create value
12 Progress against our longer-term business targets
13 Outlook for 2024 and beyond
14 Risk factors
29 Performance in the year
29 Performance indicators
31 Generating shareholder value
32 Group results
34 Financial framework
38 Market overview
41 Integrated Gas
47 Upstream
55 Oil and gas information
63 Marketing
68 Chemicals and Products
75 Renewables and Energy Solutions
79 Corporate
81 Other central activities
82 Our journey to net zero
83 Introduction
85 Governance of climate-related risks and
opportunities
89 Energy transition strategy
100 Climate risk management
103 Climate-related metrics and targets
114 Other regulatory disclosures
116 Respecting nature
124 Powering lives
125 Contribution to society
128 Our people
133 Safety
137 Living by our values
141 Principal decisions & stakeholders (Section 172(1)
statement)

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 Strategic Report

Chair's message

“For Shell, 2023 was a pivotal

My geologist's mind has always been intrigued by what lies beneath
our feet, including the natural energy resources that have propelled
the world's economic progress for so long. But with the urgent need
year in our drive to achieve to tackle climate change, I am just as fascinated by the technologies
that will help the world deliver cleaner power and fuel the future,
more value with less emissions.” as well as significantly cut carbon emissions.

Along with great challenges, the energy transition offers tremendous

opportunities to those eager to play their part. For well over a century,
Shell has pioneered ways of providing energy to people. We are
a leader in deep-water oil production, liquefied natural gas (LNG)
and biofuels, and we aim to become one of the largest providers
of charging for electric vehicles.

We aim to lead in the energy transition where we have competitive

strengths and see strong customer demand and clear support from
governments. Our strategy is to create value for our shareholders,
customers and wider society as we reduce our emissions and fulfil
our purpose to provide more and cleaner energy solutions.

For Shell, 2023 was a pivotal year in our drive to achieve more value
with less emissions. It was the first year under our new Chief Executive
Officer, Wael Sawan, who stressed the importance of enhancing our
returns to shareholders, while staying firm on our target to become a
net-zero emissions energy business by 2050. We did exactly that by
maintaining a very healthy balance sheet, increasing our dividends
and continuing to buy back shares, all while investing capital to
reduce our Scope 1 and 2 emissions, and Scope 3 emissions
related to the use of the oil products we sell.

People everywhere need a secure, sustainable and affordable energy

Sir Andrew Mackenzie supply. Shell can help to enable a balanced energy transition by
Chair keeping the world moving with oil and gas, while delivering the low-
carbon alternatives our customers need to decarbonise. To this end,
we have made it clear that we plan to expand our LNG business and
develop new low-carbon products and technologies, such as carbon
capture and storage (CCS).

I saw this when I visited Qatar's North Field expansion project in

January 2024. This project will support the delivery of much-needed
supplies of natural gas around the world and I appreciated the
opportunity to learn more about how we are developing a CCS
project there. I also visited Oman and saw how we are moving
forward with a hydrogen project, enabled by CCS.

More value, less emissions

Shell's 2023 earnings were strong and we reduced our total combined
Scope 1 and 2 absolute greenhouse gas emissions from our operations by
31% [A] compared with 2016 levels. This positions us well as we continue
to implement our strategy, guided by the free cash flow*, investment and
cost reduction targets set in 2023. We will continue to create value for
shareholders and lower emissions.
[A] Reduced from 83 million tonnes carbon dioxide equivalent (CO2e) in 2016 to 57 million
tonnes CO2e in 2023
* Non-GAAP measure (see page 365).

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Chair's message continued

Powering Progress
Our energy transition update, published on March 14, 2024, aims
to keep us on track to meet our climate targets and ambitions. As
we continue to supply oil and gas, we must continually work to lower
carbon emissions from our own operations and offer our customers
more low- and zero-carbon fuels to meet their needs in a world on 1.
its way to net zero.

In November, I saw first-hand how committed our teams are to

transforming the refinery in Rheinland, Germany, into an energy and
chemicals park. We are building a renewable hydrogen electrolyser
to help decarbonise our own operations and we will convert a
hydrocracker into a base oils production unit. The teams have also
almost finished building a plant to produce bioLNG for heavy-duty
road transport. The use of bioLNG in this slower-to-decarbonise sector
could be a game changer for accelerating the energy transition.

The energy transition must be just and fair, and we are committed to
respecting nature and powering lives in our activities. The Board visited
LNG Canada in June, where we are building a major project designed 2.
to deliver a secure supply of energy. Our people there have worked
closely with indigenous communities to help protect the environment.

Innovating for net zero

Tackling climate change will need new technologies. It will also
demand collective action from governments, businesses and consumers,
even in the face of heightened instability caused by the Russia-Ukraine
war and renewed major conflict in the Middle East.

Innovation is vital to the energy transition and is close to my heart. In

September, I met with students in China who had taken part in the Shell
Eco-marathon by embracing the challenge to design and make energy-
efficient vehicles. Their passion and perseverance should inspire us all
to keep pushing the boundaries of what is technically possible. 3.

Shell is determined to help tackle climate change. We must do this with

continued innovation and we will lead where we have the expertise
and experience. For instance, our Raízen biofuels joint venture in Brazil
and our renewable natural gas acquisition Nature Energy in Denmark,
completed in February 2023, help us to be well placed to play an
increasing role in supplying lower-carbon transport fuels.

Under Wael's leadership in 2023, we began streamlining our business,

set clear targets, tightened up on spending and reduced emissions.
The energy transition is an evolution that we are proud to be part
of. We are carefully choosing where we can make the biggest,
most positive impact as we move forward to becoming a net-zero 1. We produced first gas from Oman's Mabrouk North-East field in Block 10
emissions energy business by 2050, purposefully and profitably. (Shell interest 53.45%) in 2023. Block 10 is our first operated venture in Oman.

Shell has the drive, the ingenuity and the competitive edge to make 2. In 2023, in China, we opened our largest electric vehicle charging station. The charging
things happen: to create value for investors, customers and society, station is operated by Shell and BYD Electric Vehicle Investment Company Limited.
and contribute to a low-carbon world.
3. The Whale platform (Shell interest 60%) was built in Singapore and is expected
to start production in the Gulf of Mexico in 2024.
Sir Andrew Mackenzie
Chair

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Chief Executive
Officer's review

“We will deliver more value

In 2023, the Russia-Ukraine war continued and renewed conflict in the
Middle East raised the spectre of another regional war. Too many lives
have been destroyed and I hope for an end to these human tragedies
for our shareholders, our soon. Geopolitical volatility and the fragmentation of our world are
growing at a time when we should be working together to fight the
customers and wider society, global challenge of climate change.

with less emissions.” A balanced energy transition, which Shell supports, is one that
maintains secure and affordable energy supplies, while the world
builds the clean energy system of the future. Billions of people depend
on energy and hundreds of millions still hope to have access to it.
Energy is vital for lives everywhere.

The energy system has shown promising signs of progress, despite

geopolitical, supply chain and regulatory challenges. Renewable
power has seen record growth in recent years and one-fifth of all
new car sales in the world are now electric. In March, I saw the
results of this growth first-hand on a Shell electric vehicle charging
site in Beijing serving around 1,000 customers a day.

At Shell, we sharpened our Powering Progress strategy in 2023

with a relentless focus on performance, discipline and simplification
as we move towards becoming a net-zero emissions energy business
by 2050. We will deliver more value for our shareholders, our
customers and wider society, with less emissions. At Capital Markets
Day in June, we showed how we plan to profitably transform Shell
through the strength of our portfolio, our technological and trading
capabilities, and our deep customer relationships. We will be guided
by the financial and climate targets and ambitions we have set.

Performance and discipline

It was another strong year for Shell. One highlight for me was QGC
in Australia, which had its highest ever liquefied natural gas (LNG)
th
production in the fourth quarter and delivered its 1,000 LNG cargo.
Wael Sawan
Another was the strong operational performance in our deep-water
Chief Executive Officer portfolio. Completing the acquisition of Nature Energy, which expanded
the range of low-carbon energy we can offer, also stood out.

Cash flow from operations for 2023 of around $54 billion was the
second-highest in our history, income was around $20 billion and
Adjusted Earnings* around $28 billion. Our performance enabled
us to return $23 billion to shareholders* through $15 billion in share
buybacks and $8 billion in dividends. This is 42%* of cash flow from
operations (CFFO) and around the upper end of our 30-40% of CFFO
through the cycle target range.

We continue to be disciplined in our investments, focusing on where

we can have the maximum impact in generating value or lowering
emissions. In 2023, cash capital expenditure* of $24 billion was
at the lower end of our $23-27 billion range.

* Non-GAAP measure (see page 365).

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Chief Executive Officer's review continued

Between 2023 and 2025, we plan to invest around $40 billion in ambition to reduce customer emissions from the use of our oil products
oil and gas. An example of more value with less emissions is the Vito by 15-20% by 2030, compared with 2021 (Scope 3, Category 11) [A].
platform (Shell interest 63.1%) in the Gulf of Mexico, which started
production in 2023. Vito cost less to build because its topsides and hull As we pursue more value with less emissions, we must remain
are a third of the size of its original design and is expected to produce disciplined. For example, last summer we pulled out of a tender for
around 80% less emissions over its operating life. We are using the a wind farm off the coast of Germany when it did not meet our test
same concept for two more platforms: Whale (Shell interest 60%) for capital discipline.
and Sparta (Shell interest 51%).
The importance of learning
Simplification The safety of everyone working for Shell is our top priority. I am deeply
From July 1, 2023, our smaller Executive Committee took effect with two saddened by the death of five contractor colleagues in incidents that
clear business directorates, and a single finance, strategy, mergers and took place at Shell operations in 2023. One contractor in Malaysia
acquisitions and sustainability directorate. This simplification has already and another in the Philippines died while at work. In Nigeria, two
enabled more streamlined planning and improved decision-making. We contractors were shot, along with four government security agents, in
are also in the process of moving to our new Safety, Environment & Asset an appalling attack on a convoy. Also in Nigeria, a contractor injured
Management Standards (SEAM), which will reduce the number of key in a tugboat fire late in 2023 died in early 2024. My heart goes out to
requirements to around 500 from the current 1,800 and enable our all the families and friends of those who have died. Our personal safety
people to focus on implementing our strategy more efficiently. results fell short of what we achieved in 2022 and we are committed to
doing better through learning from these and other incidents. Applying
By the end of 2023, we had achieved around $1 billion of structural what we have learned in the past has helped us achieve our lowest
cost reductions*, positioning us well to save the $2-3 billion we said number of process safety events on record in 2023.
we would by the end of 2025.
I visited Oman in June for our Safety Day. This was significant for me
Less emissions because it is where I started at Shell 26 years ago. Talking to our
I am proud that by the end of 2023, we had achieved more than people there brought back many memories – my passion for the
60% of our target to halve emissions in our own operations by 2030, business, my hope for the future, but also how much I had to learn.
compared with 2016 levels on a net basis. We will work to continue We must always be open to new ideas.
reducing emissions from our own operations, including by powering oil
and gas platforms with renewable energy. In August, our unmanned Being the best we can be
solar- and wind-powered platform in the Timi gas field (Shell interest Our strategy is also about respecting nature and powering lives.
75%) delivered first gas and we will continue to explore this concept. We give more detail on how we are progressing in these areas in this
Annual Report (on pages 116 and 124) and in our Sustainability Report.
In support of a balanced energy transition, between 2023 and 2025,
we will invest around $35 billion in Downstream and Renewables and In 2023, I visited a number of our teams, including in Abu Dhabi,
Energy Solutions. In 2023, we invested $5.6 billion in low-carbon Brazil, China, Kazakhstan, the Netherlands, Oman, Qatar and the
energy, including the acquisition of Nature Energy and in the United States. I never cease to be impressed by the calibre of people
CrossWind joint venture off the Dutch coast, which will supply I meet on these trips. Shell's best asset is its people. Streamlining our
renewable power to the Holland Hydrogen 1 electrolyser. In China, we organisation can harness their creativity by cutting bureaucracy and
opened our largest electric vehicle charging station, while globally we making processes more efficient. I want our people to focus their
continued to transform our refineries into energy and chemicals parks. energies on making Shell the best it can be.

Our strategy confirms our commitment to Integrated Gas, particularly At Shell, we are guided by the clarity of our purpose to provide more and
LNG where we are growing our portfolio even more and will increase cleaner energy solutions. We focus on what we can control. And, as we
capacity by around 11 million tonnes per year in the second half of the embed performance, discipline and simplification into Shell's culture,
decade – that is an annual increase of more than a quarter of our I believe we are the investment case through the energy transition.
current capacity. LNG plays a major role as a lower-carbon alternative
to coal and as a partner to wind and solar for electricity generation. Wael Sawan
As we increase our LNG activities, we will continue work on reducing Chief Executive Officer
our methane emissions to near-zero by 2030. * Non-GAAP measure (see page 365).
[A] Customer emissions from the use of our oil products (Scope 3, Category 11) were
517 million tonnes carbon dioxide equivalent (CO2e) in 2023, 569 million tonnes CO2e
We want to remain a leader in biofuels and as demand for low-carbon in 2021 and 819 million tonnes CO2e in 2016.
fuels grows, we expect to sell less oil products. We aim to lead in the
energy transition where we have competitive strengths, see strong
customer demand, and identify clear regulatory support from governments.
To help drive the decarbonisation of transport, we have set a new

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Who we are

Shell is a global group of energy and petrochemical Shell's stakeholders include our customers, investors, employees
and contractors, pensioners, our strategic partners and suppliers,
companies, employing around 103,000 people [A]
the communities where we work, civil society, academia and think
and with operations in more than 70 countries. tanks, governments and regulators.

We seek to provide the world with the energy it needs today, We expect our employees and contractors to maintain our focus on
while helping it build a sustainable energy future. safety and abide by our core values of honesty, integrity and respect
Our competitive advantages are built upon our large and for people.
diverse portfolio, people who have outstanding talent, strong
[A] At December 31, 2023.
technological capability and deep customer reach, which we
are leveraging to help enable a balanced energy transition.

Our operating businesses

Integrated Gas and Upstream Downstream, Renewables and Energy Solutions

Integrated Gas and Upstream (IGU) explores for and extracts Downstream, Renewables and Energy Solutions (R&ES) provides
crude oil, natural gas and natural gas liquids. It delivers products and services to more than 1 million business customers.
hydrocarbon products from conventional oil and gas operations, It includes Chemicals and Products, and Marketing, which includes
deep-water exploration and production, liquefied natural gas Mobility — a business that serves around 33 million retail
(LNG) activities, and converts natural gas into gas-to-liquids (GTL) customers a day at more than 47,000 service stations. Marketing
fuels and other products. The marketing, trading and optimisation also includes Lubricants, and Sectors and Decarbonisation
of LNG are included in IGU. IGU provides the secure energy activities. Downstream and R&ES, underpinned by Trading and
customers need and we aim to do this with lower emissions. Supply, aims to meet the evolving energy needs of our customers.
Reporting segments Reporting segments
Integrated Gas | Upstream Marketing | Chemicals and Products | Renewables and Energy Solutions

Innovation

Technological innovation is integral to our pursuit of more and cleaner energy solutions as we work towards becoming a net-zero
emissions energy business by 2050. Projects & Technology (P&T) manages major projects, driving innovation, while delivering technical
services to our businesses. P&T provides essential functional leadership across Shell, addressing safety and environment, contracting
and procurement, and greenhouse gas emissions management. Our research and development activities also encompass safety,
performance products, and automation and artificial intelligence.

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Our strategy

Our Powering Progress strategy is to generate more Achieving net zero

The Paris Agreement aims to strengthen the global response to
value for our shareholders, customers and wider society
the threat of climate change by "holding the increase in the global
as we work to become a net-zero emissions energy average temperature to well below 2°C above pre-industrial levels
business by 2050. Our purpose -- to provide more and pursuing efforts to limit the temperature increase to 1.5°C above
and cleaner energy solutions – drives our strategy. pre-industrial levels". Shell supports the Paris Agreement goal to limit
the rise in global average temperature this century to 1.5°C above
Our strategy is built upon: generating shareholder value, achieving net- pre-industrial levels. To achieve this, urgent action is needed to reduce
zero emissions, powering lives and respecting nature. At our Capital emissions across all sectors.
Markets Day in June 2023, we announced how we will put our
strategy into action with a relentless focus on performance, discipline We are working to become a net-zero emissions energy business.
and simplification as we aim to deliver more value with less emissions. This means net-zero carbon emissions from our operations. It also means
net-zero carbon emissions from the energy products we sell (including
We are building on our strengths in Integrated Gas, Upstream and those produced by others), which currently account for over 90% of
Marketing. We will invest around $40 billion in leading Integrated the total emissions we report. We support a balanced energy transition
Gas and advantaged Upstream assets over 2023-2025. This will help where the world maintains a secure and affordable supply of energy,
drive significant and resilient cash delivery, while helping to provide while building the clean energy system of the future. We want to play
energy security. Over the same period, investment in Downstream our part in the energy transition, purposefully and profitably.
and Renewables and Energy Solutions will be around $35 billion,
of which $10-15 billion will be in low-carbon energy solutions, We aim to partner with our customers, suppliers and governments to
as we help to enable the energy transition. help decarbonise the energy system. Our integrated assets and supply
chains are designed to provide a secure supply of energy for our
customers, while also delivering low- and zero-carbon alternatives.

Generating Shareholder Value

Our Purpose Growing value through a dynamic portfolio
and disciplined capital allocation
To power progress together by providing
more and cleaner energy solutions

Respecting Nature Powering Lives

Protecting the environment, Powering lives through our
reducing waste and making Powering Progress products and activities, and
a positive contribution supporting an inclusive society
to biodiversity

Underpinned by our core values

Achieving Net-Zero Emissions
of honesty, integrity, respect for people, Working with our customers and sectors
and our focus on safety to accelerate the energy transition
to net-zero emissions

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Our strategy continued

Generating
Achieving net-
shareholder
zero emissions
value
We aim to generate more value for We aim to become a net-zero emissions
shareholders through disciplined capital energy business by 2050 and will work
allocation and a focus on performance. with customers to help them decarbonise.
We aim to generate more value for shareholders through disciplined We have a target to become a net-zero emissions energy business by
capital allocation and a focus on delivering strong performance. 2050, purposefully and profitably. Our net-zero target covers emissions
We seek to provide enhanced distributions through our progressive from our operations (Scope 1), emissions from the energy we buy to
dividend policy and share buyback programmes, which together run our operations (Scope 2) and emissions from our customers' use
target shareholder distributions* of 30-40% of cash flow from of the energy products we sell (Scope 3). We have a target to halve
operations through the cycle. Scope 1 and 2 absolute emissions from assets and activities under our
operational control by 2030, compared with 2016 levels on a net basis.
In 2023, total shareholder distributions* amounted to $23 billion, By the end of 2023 we had reduced our absolute emissions by 31% [A].
comprising $8 billion in cash dividends and $15 billion in share
buybacks, and we generated $54 billion in cash flow from operating Our energy transition update includes an ambition to reduce customer
activities. This resulted in total shareholder distributions*of 42% of cash emissions from the use of our oil products by 15-20% by 2030,
flow from operating activities*, around the upper end of our target compared with 2021 (Scope 3, Category 11) [B]. Our net carbon
range. Our capital expenditure was $23 billion and our cash capital intensity reduction targets are: 9-12% by 2024, 9-13% by 2025,
expenditure* was $24 billion. We reduced our total debt to $82 15-20% by 2030, 100% by 2050 compared with a 2016 baseline.
billion and our net debt* to $44 billion as of December 31, 2023.
We place a high priority on combatting methane emissions. Our
We aim to grow our price-normalised free cash flow* by more than target is to maintain methane emissions intensity below 0.2% for
6% per year through 2030 and grow price-normalised free cash flow operated oil and gas assets (including liquefied natural gas) and to
per share* by 10% per year through 2025. In 2023, we increased reach near-zero methane emissions by 2030. In 2023, we achieved
our dividend to $0.344 per share in the fourth quarter of 2023. this with methane emissions intensity at 0.05%. We have a target to
end routine flaring from upstream operations by 2025, subject to the
We are focusing on operational, financial and carbon performance, completion of the sale of The Shell Petroleum Development Company
while maintaining our balance sheet strength. We take a disciplined of Nigeria Limited (SPDC) [C].
approach to our portfolio and capital spending, aiming to invest
where we have an enduring competitive advantage. We are transforming our business and selling more low-carbon
products and services, and will work with our customers across
In 2023, we announced capital expenditure targets of $22-25 billion sectors to accelerate the energy transition. We engage with
per year in 2024 and 2025 and targeted structural cost reductions* governments and other stakeholders, including international
of $2-3 billion by end-2025. By the end of 2023, we had made organisations and industry associations, and participate in global
$1 billion in structural cost reductions*. events, such as COP28. Through this engagement we seek to support
robust policies, legislation and regulations designed to generate the
* Non-GAAP measure (see page 365).
demand for investment in the low-carbon energy system.
[A] Reduced from 83 million tonnes of CO2e in 2016 to 57 million tonnes of CO2e in 2023.
[B] Customer emissions from the use of our oil products (Scope 3, Category 11) were
517 million tonnes CO2e in 2023 and 569 million tonnes CO2e in 2021.
[C] In January 2024, Shell announced an agreement to sell SPDC. Completion of the
transaction is subject to approvals by the Nigerian government and other conditions.

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Our strategy continued

Powering Respecting
lives nature

We work to power lives through our We aim for a positive impact on

products and activities, and by supporting biodiversity, zero waste and using water,
an inclusive society. other resources and materials efficiently.
We seek to make a positive impact on the lives of people around In 2023, we reviewed our progress and performance on respecting
the world. We help to power lives and livelihoods by providing nature. We consolidated our respecting nature ambitions announced
vital energy for homes, businesses, and transport. as part of our Powering Progress strategy in 2021 into the following
themes: having a positive impact on biodiversity, aiming for zero
We support livelihoods by providing employment and training in waste and using water, other resources and materials efficiently.
the communities where we operate, and buying goods and services
from local suppliers, contributing to a more inclusive economy. We have already achieved some of the respecting nature
In 2023, we spent around $49 billion on goods and services commitments we set when we launched Powering Progress. Our
from suppliers*around the world. Our activities generate revenues commitment to reduce fresh-water consumption in highly water-
for governments through the taxes and royalties we pay, and stressed areas by 15% was achieved ahead of the target date of
the taxes we collect on their behalf. In 2023, taxes paid and 2025. We have also conducted detailed assessments to inform our
collected* were $67 billion. This helps governments fund health approach to fresh water and waste, which will be tailored to local
care, education and other essential services. conditions. We have concluded that our ambition to use 1 million
tonnes of plastic waste a year in our global chemical plants by 2025
Around 760 million people [A] in the world have no electricity and over is unfeasible due to lack of available plastic waste feedstock, slow
half the world population has insufficient energy to lead a good life [B]. technology development and regulatory uncertainty.
We deliver energy commercially, by investing in businesses that supply
energy access in emerging markets; and socially, by investing funds, The remaining commitments announced in 2021 have either been
expertise and resources in access to energy programmes. incorporated into our new Safety, Environment and Asset
Management (SEAM) Standards, which take effect from mid-2024,
Shell aims to become one of the most diverse and inclusive or are included in the relevant business objectives and processes.
organisations in the world. Our focus is on gender; race and ethnicity;
lesbian, gay, bisexual and transgender (LGBT+); and disability. In When planning new major projects, we conduct detailed
2023, representation of women in senior leadership [C] grew to 32%. environmental, social and health impact assessments. At the end of
Our 2023 Shell People Survey showed a result of 83 points out of 100 2023, 89% of major installations operated by Shell were certified
for all questions relating to diversity, equity and inclusion (DE&I). This against the ISO 14001:2015 Environmental Management System,
suggests that overall our people feel ours is a workplace in which they or were in compliance with equivalent environmental frameworks
belong, feel safe and respected, and have equal opportunities to required by local regulations. We are pursuing certification for
progress and grow. We seek to respect human rights in all parts of our the remainder.
business. Since 2022, we have implemented practices to improve and
maintain worker welfare for employees and contractors. Air quality continues to be embedded in our environmental standards.
[A] International Energy Agency, SDG7: Data and Projections, 2023.
We are developing a range of lower-emission choices for customers,
[B] UN Human Development Index, Approximately 75 GJ final energy per capita is the from electric vehicle charge points to biofuels, to help people and
threshold where populations reach 0.8 on the UN Human Development Index which can companies use lower-emission modes of transport. We continue to
be considered a good life.
[C] Senior Leadership is a Shell measure based on compensation grade levels. This measure is explore how we can source responsibly in our supply chain.
distinct from "senior manager" as per statutory disclosure requirements. See "Our people"
on page 128. * Non-GAAP measure (see page 365).

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How we create value continued

How we
We aim to meet the world's growing need for
more and sustainable energy solutions in ways
that are economically, environmentally and

create value
socially responsible. Through our business
activities we create value for our shareholders,
customers and wider society.

Our inputs [A] Business activities Our outcomes and impacts

Financial capital for our stakeholders [A]
Equity attributable to Shell plc shareholders ($ billion) [B]: Energy Cash flow from operating activities
187 2022: 190 use
($ billion):
Total debt ($ billion) [B]: 54 2022: 68
82 2022: 84 Free cash flow*
Net debt* ($ billion) [B]: ($ billion):
44 2022: 45 36 2022: 46
Average capital employed ($ billion) [B]: Shareholder distributions*
($ billion):
273 2022: 270
23 2022: 26
Cash capital expenditure* ($ billion):
24 2022: 25 Adjusted Earnings* ($ billion):

Operations
28 2022: 40
Customer
Refining and chemicals availability:
sectors Absolute emissions (Scope 1 and 2 –
91% 2022: 96% million tonnes of CO₂ equivalent):
Oil & gas production available for sale (kboe/d): 57 2022: 58| 2016: 83
2,791 2022: 2,864
Net carbon intensity (grams of CO₂
LNG liquefaction volumes (million tonnes): equivalent per megajoule):
Mobility Commercial Marine Aviation Industrial Commercial
28 2022: 30 road transport 74 2022: 76 | 2016: 79
Human capital Methane emissions intensity
Number of employees (thousands) [B]: 0.05% 2022: 0.05%
103 2022: 93
SUPPORTING THE DELIVERY OF INTEGRATED ENERGY SOLUTIONS
Number of training days (thousands): Women employees in senior
295 2022: 266 Energy leadership positions [B]:

Relationships
solutions 32% 2022: 30%
Ranking in the Global 500 list most valuable oil & gas Taxes paid and collected*
company [C]: ($ billion):
1 2022: 1 Fuels Lubricants Chemicals Biofuels Electricity Hydrogen Natural gas Liquefied natural gas Gas-to-liquids 67 2022: 68
Customers, joint arrangements, government relations, suppliers. Total spend on goods and services*[C]
Value enhanced by trading and optimisation ($ billion):
Operating countries [B]:
>70 2022: >70 49 2022: 48

Carbon removals and offsets

Intellectual capital
Fresh water consumed by four major
Research and development expenses ($ million):
facilities in high water-stressed areas
1,287 2022: 1,075 (million m³):
People

Assets and Energy and chemicals parks LNG and GTL Transport Power
Number of patents [B][D]: capabilities 17 2022: 18 | 2018: 25
8,829 2022: 8,647 Total waste disposed (million tonnes):
Natural resources 2 2022: 2
Proved oil and gas reserves (million boe) [B]:
Operational spills of more than 100
9,787 2022: 9,578 Renewables Oil Gas Biomass kilograms (thousand tonnes):
Energy consumed (million MWh) [E]: 0.37 2022: 0.06
Technology and operational excellence
205 2022: 209
* Non-GAAP measure (see page 365).
* Non-GAAP measure (see page 365). [A] In 2023 unless stated otherwise.
[A] In 2023 unless stated otherwise. [B] At December 31.
[B] At December 31. [C] 2022 comparative has been revised following a new reporting methodology.
[C] Source: Brand Finance Global 500.
[D] Includes patents granted and pending patent applications. Number of patents
in 2022 has been revised.
[E] 2022 figure restated, following the review of data.

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Progress against
our longer-term
business targets
In 2023, we made good progress on the longer-term business targets that we announced at Capital Markets Day
in June 2023. All other business targets have been retired in our drive for simplification and focus on performance.
More value Less emissions

Shareholder 42% Net-zero emissions

38% 1,645
distribution 30-40% by 2050 (Scope 1, 2
30–40% 1,240 1,185
of CFFO* through and 3) [D]
the cycle [A] million tonnes of CO2e

%
0

2022 2023 2016 2022 2023 2050

Price-normalised Halving Scope 1 & 2

FCF growth* > 25 emissions by 2030 83
20 58 57
6% per year under operational
41
through 2030 [B] control (2016
$ billion baseline) [D], [H]
million tonnes of CO2e
2022 2023 2030 2016 2022 2023 2030

Price-normalised Eliminate routine

3.8 0.2
FCF growth/share* flaring from
2.9
> 10% per year upstream 0.1 0.1
through 2025 [B] operations by 2025
$/share [D], [E] 0
million tonnes
2022 2023 2025 2021 2022 2023 2025

Structural cost 2-3 Methane emissions

reduction* vs. intensity maintained maintain below 0.2%
2022 ($2-3 billion) below 0.2% until
by end of 2025 [C] 1.0 2025 [D], [F] and
0.06% 0.05% 0.05%
$ billion achieve near-zero
methane emissions ~0
2023 2025 by 2030 [D], [G] 2021 2022 2023 2030
%

[D] See "Our journey to net zero" section.

[E] Subject to completion of the sale of SPDC.
[F] In view of the methane emissions intensity target of below 0.2% having been met
* Non-GAAP measure (see page 365). the reference to the target year of 2025 has been removed as part of the energy
[A] CFFO: cash flow from operating activities. transition strategy update.
[B] FCF: free cash flow. [G] Methane emissions were 41 thousand tonnes in 2023 (2022: 40, 2021: 55)
[C] 2025 target reflects annualised savings achieved by end-2025. [H] 2030 target is on a net basis.

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Outlook
for 2024 and beyond

Delivering our strategy will require clear and deliberate capital Recent times have been a stark reminder that energy security cannot
allocation choices. We intend to focus on investing in businesses where be taken for granted. We support a balanced energy transition, where
we believe we have an enduring competitive advantage. The outlook the world does not dismantle the current energy system faster than the
for cash capital spending in 2024 and 2025 is in the $22-25 billion clean energy system of the future can be built.
per year range. Additionally, we aim to reduce structural costs by
$2-3 billion by the end of 2025, compared with 2022. We are committed to our liquefied natural gas (LNG) business and
growing it with some of the lowest emissions in our industry. We will
Our target for shareholder distributions is 30-40% of cash flow from increase capacity for our LNG portfolio by around 11 million tonnes per
operations through the cycle. We may return cash to shareholders year in the second half of the decade – that is an annual increase of
through a combination of dividends and share buybacks. We increased more than a quarter of our current capacity. LNG plays an important
our dividend per share in 2023 and it is now 25% higher than the role as a lower-carbon alternative to coal and as a partner to wind
dividends for 2022. Subject to Board approval, we aim to grow the and solar power for electricity generation. Our Upstream business aims
dividend per share by around 4% every year. When setting the level of to keep liquids production levels flat, while producing oil with lower
shareholder distributions, the Board looks at a range of factors, including emissions. We will be transforming our Downstream, Renewables
the macro environment, our underlying business earnings and cash flow, and Energy Solutions business to offer more low-carbon solutions,
the current balance sheet, future investment, acquisition, and divestment while reducing sales of oil products.
plans and existing commitments.
The statements in this "Outlook" section are forward-looking statements
In 2023, we renewed our focus on performance, discipline and based on management's current expectations and certain material
simplification. We intend to demonstrate delivery of our targets, assumptions and, accordingly, involve risks and uncertainties that
while strengthening the foundation of our lower-carbon businesses. could cause actual results, performance or events to differ materially
from those expressed or implied herein.

Financial framework

Balanced Capital
Allocation

Enhanced shareholder distributions Strong balance sheet Disciplined investment

Targeting total shareholder distributions Targeting AA credit metrics Cash capex within $22-25 billion
of 30-40% of cash flow from operating through the cycle per annum for 2024 and 2025
activities through the cycle
Around 4% annual growth
in dividend per share, subject
to Board approval

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Risk factors

The risks discussed below could have a Further background on each risk is set out in the relevant sections of this
Report, indicated by way of cross references.
material adverse effect separately, or in
combination, on our earnings, cash flows The Board's responsibility for identifying, evaluating and managing our
significant and emerging risks is discussed in "Other regulatory and
and financial condition. Accordingly, statutory information" on pages 219-227.
investors should carefully consider
these risks.
Strategic risks

We are exposed to macroeconomic risks, including fluctuating prices See "Market overview" on page 38.

of crude oil, natural gas, oil products and chemicals.

Risk description How this risk is managed
The prices of crude oil, natural gas, oil products and chemicals can be volatile and are affected by supply We maintain a diversified portfolio to manage the
and demand, both globally and regionally. Under high oil and gas prices, our entitlement to proved impact of price volatility. We test the resilience of
reserves under some production-sharing contracts has been, and could continue to be, reduced. Higher our projects and other opportunities against a range
prices could also reduce demand for our products which could result in lower profitability in certain of prices and costs for crude oil, natural gas, oil
businesses in the Group, particularly in our Chemicals and Products, and Marketing businesses. Some of products and chemicals. We prepare annual
the reduction in demand could be permanent. Higher prices can also lead to more capacity being built, strategic and financial plans that test different
potentially resulting in an oversupplied market which would negatively affect our businesses. In the past, scenarios and their impact on prices on our
a high oil and gas price environment has generally led to sharp increases in costs and this could continue. businesses and organisation as a whole. Through
this process, we identify potential interventions that
In addition, macroeconomic, geopolitical and technological uncertainties have affected, and could would preserve cash levels. We also aim to maintain
continue to affect, production costs and demand for our products. Government actions may affect the a strong balance sheet through the cycle to provide
prices of crude oil, natural gas, oil products and chemicals. These include price caps on gas, the resilience against weak market prices.
promotion of electric vehicle sales or the phasing-out of future sales of new diesel or gasoline vehicles
(as announced in the UK and due to come into force in 2035). Oil and gas prices can also move
independently of each other (as seen with European gas prices in 2022). Factors that influence supply
and demand include operational issues, natural disasters, weather, pandemics such as COVID-19,
political instability, conflicts, such as Russia's full-scale invasion of Ukraine and the conflict in Gaza,
economic conditions, including inflation, and actions by major oil- and gas-producing countries.
In a low oil and gas price environment, we have generated, and could continue to generate, less revenue
from our Upstream and Integrated Gas businesses, and parts of those businesses could become less
profitable or incur losses. Low oil and gas prices have also resulted and could continue to result in the
debooking of proved oil or gas reserves, if they become uneconomic in this type of price environment.
Prolonged periods of low oil and gas prices, or rising costs, have resulted and could continue to result
in projects being delayed or cancelled. Assets have been impaired in the past, and there could be
impairments in the future. Low oil and gas prices have affected, and could continue to affect, our ability
to maintain our long-term capital investment and shareholder distribution programmes. Prolonged periods
of low oil and gas prices could adversely affect the financial, fiscal, legal, political and social stability
of countries that rely significantly on oil and gas revenue.
Accordingly, price fluctuations could have a material adverse effect on our earnings, cash flows and
financial condition.

Our ability to deliver competitive returns and pursue commercial See "Market overview" on page 39.

opportunities depends in part on the accuracy of our price assumptions.

Risk description How this risk is managed
We use a range of commodity price and margin assumptions, which we review on a periodic basis. The range of commodity prices and margins used in
These ranges help us to evaluate the robustness of our capital allocation for our evaluation of projects our project and portfolio evaluations is subject to a
and commercial opportunities. If our assumptions prove to be incorrect, this could have a material rigorous assessment of short-, medium- and long-term
adverse effect on our earnings, cash flows and financial condition. market drivers. These drivers include the extent and
pace of the energy transition.

Our ability to achieve our strategic objectives depends on how we react See "Outlook for 2024 and beyond" on page 13.

to competitive forces.
Risk description How this risk is managed
We face competition in all our businesses. We seek to differentiate our services and products, though We continually assess the external environment -
many of our products are competing in commodity-type markets. Accordingly, failure to manage our costs the markets and the underlying economic, political,
and our operational performance could result in a material adverse effect on our earnings, cash flows and social and environmental drivers that shape them -
financial condition. We also compete with state-owned hydrocarbon entities and state-backed utility to evaluate changes in competitive forces. We
entities with access to financial resources and local markets. Such entities could be motivated by political define multiple future potential scenarios and
or other factors in making their business decisions. Accordingly, when bidding on new leases or projects, business environments by identifying drivers,
we could find ourselves at a competitive disadvantage because these state-owned entities may not uncertainties, enablers and constraints to our
require a competitive return. If we are unable to obtain competitive returns when bidding on new leases competitiveness. These scenarios help us to find
or projects, this could have a material adverse effect on our earnings, cash flows and financial condition. issues which affect our operating environment
and have implications for our strategy.

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Risk factors continued

Strategic risks continued

Rising concerns about climate change and effects of the energy See "Our journey to net zero" on pages 82-115, "Climate change and
energy transition" on pages 259-269, "Renewables and energy
transition could lead to a fall in demand and potentially lower solutions" on pages 75-78 and "Legal proceedings and other
prices for fossil fuels. Climate change could also have a physical contingencies" on pages 312-314.
impact on our assets and supply chains. This risk has resulted in
adverse litigation and regulatory developments which may recur
in the future, resulting in project delays or cancellations, potential
additional litigation, operational restrictions and additional
compliance obligations.
Risk description How this risk is managed
Societal demand for urgent action on climate change has increased, especially since the Our response to the evolving risk outlook requires transparency and
Intergovernmental Panel on Climate Change (IPCC) Special Report on Global Warming clarity around our plans and actions to achieve our climate target. Our
of 1.5°C effectively made the more ambitious goal of the Paris Agreement to limit the rise climate change risk management approach is supported by standards
in global average temperature this century to 1.5°C the default target. This increasing and manuals as part of our Health, Safety, Security and Environment
focus on climate change and drive for an energy transition have created a risk and Social Performance (HSSE & SP) Control Framework. Climate
environment that is changing rapidly, resulting in a wide range of stakeholder actions at change and risks resulting from GHG emissions are reviewed and
global, local and company levels. The potential impact and likelihood of the associated managed in accordance with other significant risks through the Board
exposure for Shell could vary across different time horizons, depending on the specific and the Executive Committee. We have established several dedicated
components of the risk. internal forums related to climate change and the energy transition.
These are at different levels of the organisation and seek to address,
We expect that a growing share of our greenhouse gas (GHG) emissions will be monitor and review climate change issues.
subject to regulation, resulting in increased compliance costs and operational
restrictions. Regulators may seek to limit certain oil and gas projects or make it more Our strategy to assess and manage risks and opportunities resulting
difficult to obtain required permits. Additionally, climate activists are challenging the from climate change includes considering different time horizons and
grant of new and existing regulatory permits, and protesting at some of our facilities and their relevance to risk identification and business planning. We actively
projects. We expect that these challenges and protests are likely to continue and could monitor societal developments, such as regulation-driven carbon-
delay or prohibit operations in certain cases. Our journey to achieving our target of pricing mechanisms and customer-driven preferences for products. We
becoming a net-zero emissions energy business has resulted in and could continue to incorporate these into potential scenarios which provide insights into
require additional costs. We also expect that actions by customers to reduce their how the energy transition may unfold in the medium and long term.
emissions will lower demand and potentially affect prices for fossil fuels, as will increasing These insights and those from various other external scenarios (such
levels of GHG emissions regulation through taxes, fees and/or other incentives. This as those prepared for the IPCC Sixth Assessment Report) guide how
could be a factor contributing to additional provisions for our assets and result in we set our strategic direction, capital allocation and carbon emission
lower earnings, cancelled projects and potential impairment of certain assets. reduction targets.
The pace and extent of the energy transition could pose a risk to Shell if we decarbonise Overall, we mitigate climate-related risks through our Powering Progress
our operations and the energy we sell at a different speed relative to society. If we are strategy to deliver more value with less emissions. With our focus on
slower than society, customers may prefer a different supplier, which would reduce performance, discipline and simplification, we believe that we are in a
demand for our products and adversely affect our reputation besides materially better position to achieve both our financial and climate-related targets
affecting our financial results. If we move much faster than society, we risk investing and ambitions. This approach includes:
in technologies, low-carbon products or markets for which or where demand fails to ￮ reducing the GHG emissions from our operations (Scope 1 and 2)
materialise. The operating margins for our low-carbon products and services have been, by improving our energy efficiency, deploying renewable electricity,
and could continue to be lower than the margins we have experienced historically in managing flaring, and reducing methane emissions in our assets
our oil and gas operations. Changes in climate-related regulations may also impact and projects;
our returns. The physical effects of climate change such as, but not limited to, increases ￮ growing our world-leading liquefied natural gas (LNG) business while
in temperature and sea levels and fluctuations in water levels could also adversely decarbonising our LNG portfolio in two main ways: by growing our
affect our operations and supply chains. portfolio with a lower carbon intensity, and by focusing on reducing
emissions of methane;
Certain investors have decided to divest their investments in fossil fuel companies. ￮ managing our Upstream portfolio to support a balanced energy
If this were to continue, it could have a material adverse effect on the price of our transition by cutting emissions from oil and gas production, while
securities and our ability to access capital markets. Stakeholder groups are also putting keeping oil production stable. Oil production is increasingly from
pressure on commercial and investment banks to stop financing fossil fuel companies. our deep-water business which, through innovation, produces higher-
Some financial institutions have started to limit their exposure to fossil fuel projects. margin and lower-carbon barrels; and
Accordingly, our ability to use financing for these types of future projects may be ￮ transforming our businesses in Downstream and Renewables and
adversely affected. This could also adversely affect our partners' ability to finance Energy Solutions to offer more low-carbon solutions, while reducing
their portion of costs, either through equity or debt. sales of oil products.
In some countries governments, regulators, non-governmental organisations and individuals Our investments in low-carbon solutions are subject to financial modelling
have filed lawsuits seeking to hold fossil fuel companies liable for costs associated with and stress-testing, due diligence and risk assessments to ensure that
climate change. Losing climate change lawsuits that have been filed against us could have our capital is allocated to the most attractive low-carbon projects and
a material adverse effect on our earnings, cash flows and financial condition. For example, opportunities. In addition, we are working to effectively adapt our assets
in May 2021, the District Court in The Hague, the Netherlands, ruled that by end 2030, and activities to enhance our resilience to the physical risks related to
Shell must reduce its aggregate net Scope 1, 2 and 3 emissions by 45%, compared with climate change where needed.
2019 levels. The Scope 1 component is a results-based obligation and the Scope 2 and 3
components are a significant best-efforts obligation. We are also working with governments on their climate policy to help
establish regulatory frameworks that will enable society to reach the
As new technologies are developed to more accurately measure emissions, we may be goals of the Paris Agreement. We signed up to the Oil and Gas
required to revise our emissions estimates and reduction targets. Even if we meet our Decarbonization Charter announced at COP28, within which
targets, our efforts may be characterised as insufficient. organisations have pledged to achieve near-zero methane emissions by
In summary, rising climate change concerns, the pace at which we decarbonise 2030 and zero routine flaring by no later than 2030. We also intend to
our operations relative to society and effects of the energy transition pose multiple contribute to the World Bank's Global Flaring and Methane Reduction
challenges to our business. These could, individually or collectively, result in, for Fund, which was launched at COP28. In relation to the ruling delivered
example, financial penalties, additional provisions or payments of financial damages, by the District Court in The Hague in May 2021, we have appealed the
and have a material adverse effect on our earnings, cash flows and financial condition. ruling but continue to implement our Powering Progress strategy to
become a net-zero emissions energy business by 2050, regardless
of whether we win or lose the appeal.

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Risk factors continued

Strategic risks continued

We operate in more than 70 countries that have differing degrees of See "Other regulatory and statutory information"
on page 225.
political, legal and fiscal stability. This exposes us to a wide range of
political developments that could result in changes to contractual terms,
laws and regulations. We and our joint arrangements and associates
also face the risk of litigation and disputes worldwide.
Risk description How this risk is managed
Developments in politics, laws and regulations can and do affect our supply chains and operations. We continually monitor geopolitical developments
Potential impacts, which we have experienced in the past, include: forced divestment of assets; and societal issues relevant to our interests.
expropriation of property; cancellation or forced renegotiation of contract rights; delay of new projects;
additional taxes, including windfall taxes (especially during periods of prolonged high oil and gas prices Our Legal and Tax functions are organised globally
experienced in recent years, such as 2022), restrictions on deductions and retroactive tax claims; antitrust and support our business lines in seeking to ensure
claims; changes to trade compliance regulations; price controls; local content requirements; foreign compliance with local laws and fiscal regulations,
exchange controls; changes to environmental regulations; changes to regulatory interpretations and and filing proactive claims where warranted to
enforcement; and changes to disclosure requirements. Many parts of the world are facing economic and protest unfair practices. Our Corporate Relations
fiscal challenges and growing pressure on cost-of-living standards. These issues impact our business as department liaises with governments in countries
governments, in response to political and social pressures, pursue policies that could have a material where we operate to understand and engage on
adverse effect on our earnings, cash flows and financial condition. local policies and to advocate Shell's position on
topics relevant to our industry.
The world is also facing continued geopolitical instability, including Russia's full-scale invasion of Ukraine,
which impacts market conditions and our operations. The broader consequences of the conflict in Gaza We are prepared to exit a country if we believe we
remain uncertain and a wider regional escalation could have greater impacts on our operations in the can no longer operate there in accordance with our
Middle East and beyond. standards and applicable law, and we have done
so in the past.
From time to time, social and political factors play a role in unprecedented and unanticipated judicial
outcomes that could adversely affect Shell. Non‑compliance with policies and regulations could result in With regard to the conflict in Gaza, we have made
regulatory investigations, litigation and, ultimately, sanctions. Certain governments and regulatory bodies adjustments to our operations in the Middle East to
have, in Shell's opinion, exceeded their constitutional authority by: attempting unilaterally to amend or reduce our exposure and are closely monitoring the
cancel existing agreements or arrangements; failing to honour existing contractual commitments; and risk of a wider regional escalation.
seeking to adjudicate disputes between private litigants. Certain governments have also adopted laws
and regulations that could potentially conflict with other countries' laws and regulations, potentially
subjecting us to criminal and civil sanctions. Such developments and outcomes could have a material
adverse effect on our earnings, cash flows and financial condition.

An erosion of our business reputation could have a material adverse See "Living by our values" on page 137.

effect on our brand, our ability to secure new hydrocarbon or low-carbon

opportunities or access capital markets, and on our licence to operate.
Risk description How this risk is managed
Our reputation is an important asset. The Shell General Business Principles (SGBP) govern how Shell The SGBP set out our responsibilities to
and its individual companies conduct their affairs, and the Shell Code of Conduct tells employees shareholders, customers, employees, business
and contract staff how to behave in line with the SGBP. Our challenge is to ensure that all employees partners and society. They set the standards for how
and contract staff comply with the Principles and the Code of Conduct. Real or perceived failures of we conduct business with integrity, care and respect
governance or regulatory compliance or a perceived lack of understanding of how our operations for people. All Shell employees and contractors, and
affect surrounding communities could harm our reputation. those at joint ventures we operate, are expected to
behave in line with these business principles. We
Societal expectations of companies are increasing, with a focus on business ethics, quality of products, undertake a range of activities to help embed the
contribution to society, safety and minimising damage to the environment. There is increasing focus on SGBP throughout the organisation. This involves
the role of oil and gas in the context of climate change and the energy transition. Non-governmental training, encouraging people to discuss the
organisations (NGOs) continue to challenge Shell's social and legal licence to operate through activities dilemmas they face in their work.
to block or delay projects and by bringing legal actions, diverting our resources. In key markets, we are
seeing an increasing number of protests at external events such as the Annual General Meeting, claims We continually assess and monitor the external
brought by NGOs and our brand communications have been subject to bans from advertising regulators environment for potential risks to our reputation.
in the UK and the Netherlands, following complaints received from members of the public. During We engage in dialogue with our key stakeholders,
prolonged periods of high oil and gas prices, the oil and gas industry could be accused of profiteering such as investors, industry and trade groups,
from higher fuel and electricity prices and therefore impacting living costs. This could negatively affect academics, governments and non-governmental
our brand, reputation and licence to operate, which could limit our ability to deliver our strategy, reduce organisations to gain greater insights into societal
consumer demand for our branded and non-branded products, harm our ability to secure new resources expectations of the Shell Group of companies.
and contracts, and restrict our ability to access capital markets or attract staff. Many other factors, We also take proactive steps when warranted,
including the materialisation of other risks discussed in this section, could negatively affect our reputation through legal means to protect our reputation
and could have a material adverse effect on our earnings, cash flows and financial condition. from unwarranted accusations.
We have mitigation plans for identified individual
risks at the Group, country and line of business level.
Our country chairs are responsible for implementing
country plans which are updated annually. We
continually develop and defend our brand in line
with Shell's purpose and promises and target our
efforts to drive brand differentiation, relevance
and preference.

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Risk factors continued

Operational risks

Some of the consequences of Russia's full-scale invasion of Ukraine remain See "Other regulatory and statutory information"
on page 225.
unpredictable. The evolving geopolitical situation, including sanctions and
export controls, has caused challenges to our operations, the security of
our people, and has created new reputational exposure, both of which
are likely to continue in the medium to longer term.
Risk description How this risk is managed
The Russia-Ukraine war continues to pose challenges to our operations and commercial decisions. In response to the invasion, a Group Crisis
The subsequent sanctions and export controls imposed by countries around the world are continuing Team was set up to assess the situation, consider
to have a material impact on a number of our activities, including supply, trading and treasury activities. potential scenarios of how events may further
More sanctions and export controls could be expected. develop and coordinate responses accordingly.
The team continues to play an oversight and cross-
This continuing war could give rise to additional events that could materially impact our operations, coordination role across Shell's different lines
which may be temporary or more permanent in nature. These risks and future events could impact the of businesses.
security of our people, our supply chain, commodity prices, credit, commodity trading, treasury and
legal activities. In addition, there are potential reputational risks associated with how Shell's decisions Care for our people remains Shell's top priority.
in response to evolving challenges are perceived. The tensions also create heightened cyber security
threats to our information technology (IT) infrastructure. We continue to closely monitor and respond to
the sanctions that have been imposed and follow
Any of these factors, individually or in aggregate, could have a material adverse effect on our earnings, international guidelines where relevant to our
cash flows and financial condition. business activities.
Shell no longer participates in any joint ventures
with Gazprom and related entities with ongoing
operations inside Russia. Shell has also exited all
its downstream business (including service stations,
fuels supply and lubricants) in Russia.

The estimation of proved oil and gas reserves involves subjective See "Supplementary information - oil and gas
(unaudited)" on pages 317-335.
judgements based on available information and the application
of complex rules. This means subsequent downward adjustments
are possible.
Risk description How this risk is managed
The estimation of proved oil and gas reserves involves subjective judgements and determinations based A central group of reserves experts undertakes the
on available geological, technical, contractual and economic information. Estimates can change over primary assurance of the proved reserves bookings.
time because of new information from production or drilling activities, changes in economic factors, such A multidisciplinary committee reviews and endorses
as oil and gas prices, alterations in the regulatory policies of host governments, or other events. Estimates all major proved reserves bookings. Shell's Audit
also change to reflect acquisitions, divestments, new discoveries, extensions of existing fields and mines, and Risk Committee reviews all proved reserves
and improved recovery techniques. Published proved oil and gas reserves estimates could also be bookings and Shell's CEO is responsible for final
subject to correction because of errors in the application of rules and changes in guidance. Downward approval. The Internal Audit function also provides
adjustments could indicate lower future production volumes and could also lead to impairment of assets. further assurance through audits of the control
This could have a material adverse effect on our earnings, cash flows and financial condition. framework, from which information disclosed
in "Supplementary information – oil and gas
(unaudited)" is obtained.

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Risk factors continued

Operational risks continued

Our future hydrocarbon production depends on the delivery of large and See "Oil and gas information" on pages 55-62.

integrated projects and our ability to replace proved oil and gas reserves.
Risk description How this risk is managed
We face numerous challenges in developing capital projects, especially those which are large and We continue to explore for and mature
integrated. Challenges include: uncertain geology; frontier conditions; the existence and availability hydrocarbons across our Upstream and Integrated
of necessary technology and engineering resources; the availability of skilled labour; the existence of Gas businesses. We use our subsurface, project
transport infrastructure; project delays; the expiration of licences; delays in obtaining required permits; and technical expertise, and actively manage non-
potential cost overruns; and technical, fiscal, regulatory, political and other conditions. These challenges technical risks across a diversified portfolio of
are particularly relevant in certain developing and emerging market countries, in frontier areas and in opportunities and projects. This involves adopting
deep-water fields, such as off the coast of Namibia. We may fail to assess or manage these and other an integrated approach for all stages, from basin
risks properly. Such potential obstacles could impair our delivery of these projects, our ability to fulfil the choice to development. We use competitive
full potential value of the project as assessed when the investment was approved, and our ability to fulfil techniques and benchmark our approach
related contractual commitments. This could lead to impairments and could have a material adverse internally and externally.
effect on our earnings, cash flows and financial condition.
Future oil and gas production will depend on our access to new proved reserves through exploration,
negotiations with governments and other owners of proved reserves and acquisitions, and through
developing and applying new technologies and recovery processes to existing fields. Failure to replace
proved reserves could result in an accelerated decrease of future production, potentially having a
material adverse effect on our earnings, cash flows and financial condition.

Oil and gas production available for sale

Million boe [A]
2023 2022 2021
Shell subsidiaries 937 938 1,047
Shell share of joint ventures and associates 82 108 134
Total 1,019 1,046 1,181
[A] Natural gas volumes are converted into oil equivalent using a factor of 5,800 scf per barrel.

Proved developed and undeveloped oil and gas reserves [A][B]

Million boe [C]
Dec 31, Dec 31, Dec 31,
2023 2022 2021
Shell subsidiaries 8,283 8,317 8,456
Shell share of joint ventures and associates 1,504 1,261 909
Total 9,787 9,578 9,365
Attributable to non-controlling interest of Shell subsidiaries 378 365 267
[A] We manage our total proved reserves base without distinguishing between proved reserves from subsidiaries and
those from joint ventures and associates.
[B] Includes proved reserves associated with future production that will be consumed in operations.
[C] Natural gas volumes are converted into oil equivalent using a factor of 5,800 scf per barrel.

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Risk factors continued

Operational risks continued

The nature of our operations exposes us, and the communities in which See "Safety" on pages 133-136 and "Living by our
values" on pages 139.
we work, to a wide range of health, safety, security and environment risks.
Risk description How this risk is managed
The health, safety, security and environment (HSSE) risks to which we and the communities in which we We have internal standards and a clear governance
work are potentially exposed cover a wide spectrum, given the geographical range, operational diversity structure to help manage HSSE risks and avoid
and technical complexity of our operations. These risks include the effects of natural disasters (including potential adverse effects. Our governance structure
weather events and earthquakes), social unrest, pandemic diseases, criminal actions by external parties, and standards also help us to develop mitigation
and safety lapses. If a major risk materialises, such as an explosion or hydrocarbon leak or spill, which we strategies aimed at ensuring that if an HSSE
have experienced in the past, this could result in injuries, loss of life, environmental harm, disruption of risk materialises, we avoid the worst possible
business activities, loss or suspension of permits, loss of our licence to operate and loss of our ability to bid consequences and have ways to remediate any
on mineral rights. Accordingly, this could have a material adverse effect on our earnings, cash flows and environmental damage. Our standards describe
financial condition. how key control processes need to be implemented,
for example, to ensure safe production and
Our operations are subject to extensive HSSE regulatory requirements that often change and are likely to equipment care. When planning new major
become more stringent over time. Governments could require operators to adjust their future production projects, we conduct detailed environmental,
plans, affecting production and costs. We could incur significant extra costs in the future because of the social and health impact assessments. We
need to comply with such requirements. We could also incur significant extra costs due to violations of routinely practise our emergency response plans
or liabilities under laws and regulations that involve elements such as fines, penalties, clean-up costs and for potential events, such as spills or fire, which
third-party claims. If HSSE risks materialise, they could have a material adverse effect on our earnings, pose a significant risk.
cash flows and financial condition.
Our standards and governance structure are
currently defined in our Health, Safety, Security,
Environment and Social Performance (HSSE & SP)
Control Framework and supporting guidance
documents. We are in the process of transitioning
to new Safety, Environment and Asset
Management Standards as part of the
Shell Performance Framework.
The Shell Internal Audit and Investigation team
provides assurance on the HSSE & SP controls
to the Audit and Risk Committee.

A further erosion of the business and operating environment in Nigeria See "Upstream" on page 52 and "Legal proceedings
and other contingencies" on pages 312-314.
could have a material adverse effect on us.
Risk description How this risk is managed
In our Nigerian operations, we face various risks and adverse conditions. These include: security incidents We test the economic and operational resilience
affecting the safety of our people, host communities and operations; sabotage and crude theft; ongoing of our Nigerian projects against a wide range
litigation; limited infrastructure; challenges presented by delayed government and partner funding and of assumptions and scenarios. We seek to
budget delays; and regional instability created by militant activities. Some of these risks and adverse proportionally share risks and funding commitments
conditions, such as security issues affecting the safety of our people and sabotage and theft, have with joint-venture partners. When we participate
occurred in the past and are likely to continue in the future, with a potential material adverse effect in joint ventures in Nigeria, we require that they
on our earnings, cash flows and financial condition. operate in accordance with good industry practice.
We monitor the security situation, and liaise with
host communities, governmental and non-
governmental organisations to help promote
peaceful and safe operations.
Upon completion of the announced sale (subject
to regulatory approvals and other conditions)
of our onshore Nigeria business, our exposure to
these risks is expected to reduce. Shell has other
businesses in Nigeria that are outside the scope
of the announced transaction.

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Risk factors continued

Operational risks continued

We rely heavily on information technology systems in our operations. See "Other central activities" on page 81.

Risk description How this risk is managed

Our continued focus on digitalising our business processes, and our increasing dependence on Our global integrated Information Risk
information technology (IT) systems for our core operations, mean that we are heavily reliant on secure, Management (IRM) and cyber defence teams
affordable and resilient IT services provided both in-house and by third parties. are staffed with cyber security professionals that
monitor, assure and defend our global IT landscape.
Externally, we observe several developments impacting our IT and cyber risk profile: deterioration of the Our cyber security capabilities are embedded into
cyber security threat landscape represented by increasing volumes of attacks by sophisticated cyber our IT systems, and our IT is protected by various
actors, technology developments (such as artificial intelligence), geopolitical conflicts and increases detective and protective technologies. A structured
in regulations across the markets in which Shell operates. We have observed an increase in social approach to identify, assess and mitigate the IT and
engineering (manipulation of individuals) as a method of financially driven cyber crime. Threat actors cyber security risks is built into our support processes
are targeting bank account changes, invoice settlement and identity fraud to extract money from and aligns to industry best practices. We
corporations. Ransomware attacks on corporations continue to be widespread. These contribute to continuously track cyber attacks, threat intelligence
potential breaches and disruptions of critical IT services, such as the security incident involving the transfer and vulnerabilities in our IT landscape and have a
of files which Shell experienced in 2023. If breaches are not detected early and responded to effectively, well-structured incident management and escalation
they could impact our operations and the safety of our staff and/or harm our reputation and/or result in process in place. The security of IT services, where
material regulatory fines. This could have a material adverse effect on our earnings, cash flows and operated by external IT companies, is managed
financial condition. through contractual clauses and additionally
through formal supplier assurance reports for critical
IT services. Shell engages an external party to
perform periodic benchmarking of Shell's approach
to cyber security risk management in comparison to
industry and peers. We develop our cyber security
capabilities, based on external dynamics,
benchmarking outcomes and assurance results
and take a risk-based approach in our investment
decisions related to cyber security risk strategy.
Our information risk management practices, and
cyber security risks and strategy are regularly
discussed by and among our Chief Information
Security Officer, Shell's Information and Digital
Technology leadership, the Executive Committee,
the Audit and Risk Committee and the Board of
Directors. These discussions involve consideration
of changes in the external environment, how
Shell is responding to cyber security risks and
implementation of further remedial actions as
appropriate. In 2023, these reviews were
supplemented by dedicated deep dives into areas
such as the emerging risks (and opportunities)
associated with generative artificial intelligence.

Our business exposes us to risks of social instability, criminality, civil See "Safety" on page 136.

unrest, terrorism, piracy, cyber disruption and acts of war that could
have a material adverse effect on our operations.
Risk description How this risk is managed
As seen in recent years, these risks can manifest themselves in the countries where we operate and We seek to obtain the best possible information to
elsewhere. These risks impact people, our operations and assets. Risks which have materialised in the past enable us to assess threats and risks. We conduct
include: acts of terrorism; acts of criminality, including maritime piracy, sabotage and tapping into our detailed threat and risk assessments for Shell-
pipelines in Nigeria; cyber espionage or disruptive cyber attacks; conflicts, including war - such as Russia's operated venture assets, facilities, businesses,
full-scale invasion of Ukraine; civil unrest such as the 2023 political unrest in Pakistan; malicious acts projects and activities, so that security risk
carried out by individuals within Shell, such as data exfiltration during divestments; and environmental mitigations achieve the principles of deter, detect,
and climate activism (including disruptions by non-governmental organisations) especially in the USA and delay and respond. Further mitigations include
north-west Europe, where, for example, activists boarded and protested during the sailing of the Penguins strengthening the security of assets, reducing
floating production and storage and offloading (FPSO) vessel to Norway. our exposure as appropriate and using journey
management plans. We also invest in information
The above risks can threaten the safe operation of our assets and the transport of our products. They risk management capabilities and crisis
can harm the well-being of our people, inflict loss of life and injuries, and disrupt our operational activities. management and business continuity measures.
They can also damage the environment and negatively impact our reputation. These risks could have a We learn from incidents, in order to continually
material adverse effect on our earnings, cash flows and financial condition. improve our security risk management in Shell.

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Risk factors continued

Operational risks continued

The Groningen region in the Netherlands continues to experience See "Upstream" on page 49 and "Legal
proceedings and other contingencies" on page 313.
earthquakes induced by historical gas production activities, affecting
local communities.
Risk description How this risk is managed
Shell and ExxonMobil are 50:50 shareholders in Nederlandse Aardolie Maatschappij B.V. (NAM). NAM is working with the Dutch government and
An important part of NAM's gas production comes from the onshore Groningen gas field, in which EBN, other stakeholders to fulfil its obligations to residents
a Dutch government entity, has a 40% interest and NAM a 60% interest. The Dutch government issues of the area. These include compensating for
annual gas production instructions for the Groningen field. As per the latest instruction, production ceased damage caused by the earthquakes and paying to
on October 1, 2023. However, the Dutch government has indicated to NAM it could decree a restart of strengthen houses where this is required for safety.
minimal production in exceptional circumstances during the current gas year, which occurred on January In 2022, NAM started arbitrations with the Dutch
8-10, 2024, for a cold spell of several days. government to have its financial liability determined
for costs which the Dutch government compensated
The region is still experiencing earthquakes induced by historical gas production. This has resulted in to claimants and subsequently charged to NAM.
damaged buildings in the region, which has led to complaints and lawsuits from the local community and
promises of compensation from the Dutch government to the region. The Dutch State has taken over the Shell and ExxonMobil intend to reach a final, all-
handling of damage claims from NAM for all claim categories, as well as activities to strengthen buildings encompassing settlement with the Dutch government
in the region, while NAM remains financially responsible insofar as the costs correspond to NAM's on the new design of the Dutch "Gasgebouw" and
liability. While we expect the cessation of production from the Groningen gas field on October 1, 2023, the winding-down of natural gas production in
to further reduce seismicity, any additional earthquakes, or the government passing on costs to NAM Groningen. Shell, ExxonMobil and the Dutch
beyond NAM's liability, could have further material adverse effects on our earnings, cash flows and government reached agreements in 2018 (Heads
financial condition. of Agreement) and 2019 (Interim Agreement),
and subsequently have been engaged in discussions
on the interpretation and implementation of these
agreements and on a final and all-encompassing
settlement. However, as these discussions have
not led to such a settlement, in December 2023,
the NAM shareholders asked an independent
arbitration panel to rule on the interpretation
and implementation of the agreements made in
2018/2019. The purpose of this arbitration is for
a neutral third party to assess the situation and
provide clarity. The arbitration is expected to take
several years, and the judgment will be binding.
The arbitration does not preclude a final and all-
encompassing settlement, provided Shell,
ExxonMobil and the Dutch government agree
to pursue such a settlement.

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Risk factors continued

Operational risks continued

We are exposed to treasury and trading risks, including liquidity risk, See "Financial framework" on page 34.

interest rate risk, foreign exchange risk and credit risk. We are affected
by the global macroeconomic environment and the conditions of financial
and commodity markets.
Risk description How this risk is managed
Our subsidiaries, joint arrangements and associates are subject to differing economic and financial We use various financial instruments for managing
market conditions around the world. Political or economic instability affects such markets. exposure to foreign exchange and interest rate
movements. Our treasury operations are highly
We use debt instruments, such as bonds and commercial paper, to raise significant amounts of capital. centralised and seek to manage credit exposures
Should access to debt markets become more challenging, the impact on our liquidity could have a associated with our substantial cash, foreign
material adverse effect on our operations. For example, some financial institutions have started to limit exchange and interest rate positions. Our
their exposure to fossil fuel projects. Group financing costs could also be affected by interest rate portfolio of cash investments is diversified to avoid
fluctuations or any credit rating deterioration. concentrating risk in any one instrument, country or
We are exposed to changes in currency values and to exchange controls as a result of our substantial counterparty. Other than in exceptional cases, the
international operations. Our reporting currency is the US dollar, although, to a material extent, we use of external derivative instruments is confined to
also hold assets and are exposed to liabilities in other currencies. While we undertake some foreign specialist trading and central treasury organisations
exchange hedging, we do not do so for all our activities. Even where hedging is in place, it may not that have the appropriate skills, experience,
function as expected. supervision, control and reporting systems.

Commodity trading is an important component of our businesses. Processing, managing and monitoring In effecting commodity trades and derivative
many trading transactions across the world, some of which are complex and, depending on the terms of contracts, we operate within procedures and
our commodity contracts, exposes us to operational and market risks, including commodity price risks. policies designed to ensure that market risks are
We use derivative instruments such as futures, options and contracts for difference to hedge market risks. managed within authorised limits and trading can
Due to differences between derivative instruments available in the market to hedge market risks and the only be performed by staff with the appropriate
actual market risks we are exposed to, perfect hedging is not always achievable. Therefore, our hedging skills and experience. We closely monitor
has from time to time not functioned as expected and may not function as expected in the future. We developments in sanctions and export controls
undertake commodity trading to optimise commercial margins or to profit from expected market price to ensure compliance with applicable laws and
movements. Even with sound risk management procedures and controls in place, this activity involves regulatory guidance. Senior Management regularly
forecasting and hence we are exposed to the risk of incurring significant losses if prices develop reviews mandated trading limits. A department that
contrary to management expectations. is independent from our traders monitors our market
risk exposures daily, using value-at-risk techniques
We are exposed to credit risk; our counterparties could fail or be unable to meet their payment and/or alongside other risk metrics as appropriate.
performance obligations under contractual arrangements.
We have credit risk policies in place which seek
Our pension plans invest in government bonds, so they could be affected by a sovereign debt downgrade to ensure that products are sold to customers
or other default. with appropriate creditworthiness. These policies
If any of the above risks materialise, they could have a material adverse effect on our earnings, cash flows include detailed credit analysis and monitoring
and financial condition. of customers against counterparty credit limits.
Where appropriate, netting arrangements, credit
insurance, prepayments and collateral are used
to manage credit risk.
We maintain committed credit facilities.
Management believes it has access to sufficient
debt funding sources (capital markets) and to
undrawn committed borrowing facilities to meet
foreseeable requirements.

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Risk factors continued

Operational risks continued

Our future performance depends on the successful development and See "Other central activities" on page 81.

deployment of new technologies that provide new products and solutions.

Risk description How this risk is managed
Technology and innovation are essential to our efforts to help meet the world's energy demands Shell's Projects and Technology organisation and
competitively. If we fail to effectively develop or deploy new technology, products and solutions, or fail the relevant business lines work together to determine
to make full, effective use of our data in a timely and cost-effective manner, there could be a material the content, scope and budget for developing new
adverse effect on the delivery of our strategy and our licence to operate. We operate in environments technology that supports our activities. The new
where advanced technologies are used. In developing new technologies, products and solutions, technology is developed using a robust technology
unknown or unforeseeable technological failures or environmental and health effects could harm our maturation process, to systematically de-risk both
reputation and licence to operate or expose us to litigation or sanctions. The associated costs of new technical and commercial risks, while ensuring
technology are sometimes underestimated. Sometimes the development of new technology is subject portfolio alignment with Shell's strategic ambitions
to delays. If we are unable to develop the right technology and products in a timely and cost-effective and deployment commitments. A significant
manner, or if we develop technologies, products and solutions that harm the environment or people's proportion of Shell's technology contributes to our
health, there could be a material adverse effect on our earnings, cash flows and financial condition. emissions reduction targets. We benefit from
collaborations with leading academic research
institutes and universities, and from providing access
to mentors and subject matter expertise to start-ups.
In our Shell GameChanger programme, we help start-
ups and businesses on unproven early-stage ideas to
mature early-stage technologies. In our Shell Ventures
scheme, we invest in and partner with start-ups and
small and medium-sized enterprises that are in the
early stages of developing new technologies.

We have substantial pension commitments, the funding of which is subject See "Financial framework" on page 34.

to capital market risks and other factors.

Risk description How this risk is managed
Liabilities associated with defined benefit pension plans are significant, and the cash funding requirement A pensions forum chaired by the Chief Financial
of such plans can also involve significant liabilities. They both depend on various financial and Officer oversees Shell's input to pension strategy,
demographic assumptions. Volatility in capital markets or government policies could affect investment policy and operation. A risk committee supports the
performance, inflation and interest rates, causing significant changes to the funding level of future forum in reviewing the results of assurance processes
liabilities and/or short-term liquidity requirements. Changes in assumptions for mortality, retirement age or with respect to pension risks. Local trustees manage
pensionable remuneration at retirement could also cause significant changes to the funding level of future the funded defined benefit pension plans and set the
liabilities. We operate a number of defined benefit pension plans and, in case of a shortfall, we could be strategic asset allocation for the plans, including the
required to make substantial cash contributions (depending on the applicable local regulations). This extent to which currency, interest rate and inflation
could result in a material adverse effect on our earnings, cash flows and financial condition. risks are hedged, and the contributions paid are
based on independent actuarial valuations that
align with applicable local regulations. Pension fund
liquidity is managed by holding appropriate liquid
assets and maintaining credit facilities. Where
appropriate, transactions to transfer pension
liabilities to third parties are also considered.

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Risk factors continued

Operational risks continued

We mainly self-insure our hazard risk exposures. Consequently, we could See "Corporate" on page 80.

incur significant financial losses from different types of risks that are not
insured with third-party insurers.
Risk description How this risk is managed
Our Group insurance companies (wholly owned subsidiaries) provide insurance coverage to Shell We continually assess the safety performance
subsidiaries and entities in which Shell has an interest. These subsidiaries and entities may also insure of our operations and make risk mitigation
a portion of their risk exposures with third parties, but such external insurance would not provide any recommendations, where relevant, to keep the risk
material coverage in the event of a large-scale safety or environmental incident. Accordingly, in the event of an accident as low as possible. Our insurance
of a material incident, we would have to meet our obligations without access to material proceeds from companies are adequately capitalised and they
third-party insurers. We have in the past incurred adverse impacts from events, such as Hurricane Ida in may transfer risks to third-party insurers where
2021. We may, in the future, incur significant losses from different types of hazard risks that are not economical, effective and relevant.
insured with third-party insurers, potentially resulting in a material adverse effect on our earnings, cash
flows and financial condition.

Many of our major projects and operations are conducted in joint See "Other regulatory and statutory information"
on page 225.
arrangements or with associates. This could reduce our degree of control
and our ability to identify and manage risks.
Risk description How this risk is managed
When we are not the operator, we have less influence and control over the behaviour, performance and For every major project where we share control,
operating costs of joint arrangements or associates. Despite having less control, we could still be exposed Shell appoints a Joint Venture Asset Manager,
to the risks associated with these operations, including reputational, litigation (where joint and several whose responsibility is to manage performance and
liability could apply) and government sanction risks. For example, our partners or members of a joint create and protect value for Shell. The Joint Venture
arrangement or an associate, (particularly local partners in developing countries), may be unable to Asset Manager seeks to influence operators and
meet their financial or other obligations to projects, threatening the viability of a given project. Where other partners to adapt their practices in order to
we are the operator of a joint arrangement, the other partner(s) could still be able to veto or block certain drive value appropriately and to mitigate identified
decisions, which could be to our overall detriment. Accordingly, where we have limited influence, we are risks. An annual review assesses how the joint
exposed to operational risks that could have a material adverse effect on our earnings, cash flows and venture's standards and processes align with those
financial condition. of Shell. The Joint Venture Asset Manager follows
up on any gaps identified.

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Risk factors continued

Conduct and culture risks

We are exposed to regulatory and conduct risk in our trading operations. See "Living by our values" on page 138.

Risk description How this risk is managed

Commodity trading is an important component of our business. Our commodity trading entities are We maintain a trading compliance function managed
subject to many regulations, including requirements for standards of conduct. The risk of ineffective by a Chief Compliance Officer, as regulated by the
controls, poor oversight of trading activities, and the risk that traders could deliberately operate outside UK Financial Conduct Authority, the US Commodities
compliance limits and controls, either individually or as a group, has occurred. This has resulted in losses Futures Trading Commission and the Securities
in the past and may result in further losses in the future. The rapidly changing regulatory environment Commission of The Bahamas, with adequate
creates a risk of insufficient, delayed or incorrect implementation of new or changes to existing regulatory resources, including employees and budget; a
requirements. Violations of such regulatory requirements could also expose us and/or our employees to comprehensive governance structure, including
regulatory fines and have an adverse effect on our licence to operate. These risks could harm our mitigating control measures; and established
reputation and have a material adverse effect on our earnings, cash flows and financial condition. reporting lines. Employees in Shell's trading
organisation receive clear guidance through the
Shell Code of Conduct; the organisation's Trading
Compliance Manual, supplemented with specific
policies; a specific compliance website; mandatory
training modules where completion is monitored; and
additional training sessions. Shell leaders reinforce
the importance of managing compliance and conduct
risk in the trading organisation. Shell's Trading
Compliance function has a dedicated monitoring
and surveillance team, which has systems for trade
surveillance and monitoring communication.

Violations of antitrust and competition laws carry fines and expose us See "Living by our values" on page 138.

and/or our employees to criminal sanctions and civil suits.

Risk description How this risk is managed
Antitrust and competition laws apply to Shell and its joint arrangements and associates in the vast We maintain an antitrust programme with adequate
majority of countries where we do business. Shell and its joint arrangements and associates have been resources, a comprehensive governance structure and
fined for violations of antitrust and competition laws in the past. This includes a number of fines by the established reporting lines. Staff receive guidance on
European Commission Directorate-General for Competition (DG COMP). Because of DG COMP's fining the requirements listed in Shell's Ethics and Compliance
guidelines, any future conviction of Shell or any of its joint arrangements or associates for violation of EU Manual, including via an antitrust-specific website;
competition law could potentially result in significantly larger fines and have a material adverse effect on training modules, where completion is monitored; and
us. Violation of antitrust laws is a criminal offence in many countries, and individuals can be imprisoned messages from Shell leaders on the importance of
or fined. In certain circumstances, directors may receive director disqualification orders. It is also now managing antitrust risks. Staff must understand and
common for persons or corporations allegedly injured by antitrust violations to sue for damages. comply with the Protect Shell Policy, which explains
Any violation of these laws can harm our reputation and could have a material adverse effect on Shell's position on managing antitrust risks in
our earnings, cash flows and financial condition. engagements with parties external to Shell. In response
to fast-moving external antitrust developments and
trends, internal guidance is continually being monitored
to ensure that it remains relevant.

Violations of anti-bribery, tax-evasion and anti-money laundering laws See "Living by our values" on page 137 and "Legal
proceedings and other contingencies" on pages
carry fines and expose us and/or our employees to criminal sanctions 312-314.
and civil suits.
Risk description How this risk is managed
Anti-bribery, tax-evasion and anti-money laundering laws apply to Shell, its joint arrangements and We maintain an anti-bribery, anti-tax evasion and
associates in all countries where we do business. Shell and its joint arrangements and associates have in anti-money laundering (ABC/AML) programme with
the past settled with the US Securities and Exchange Commission regarding violations of the US Foreign adequate resources, a comprehensive governance
Corrupt Practices Act. Any violation of anti-bribery, tax-evasion or anti-money laundering laws, including structure and established reporting lines. Staff receive
potential violations associated with Shell Nigeria Exploration and Production Company Limited's guidance on the requirements listed in Shell's Ethics
investment in Nigerian oil block OPL 245 and the 2011 settlement of litigation pertaining to that block, and Compliance Manual; an ABC/AML-specific
could harm our reputation or have a material adverse effect on our earnings, cash flows and financial website; training modules, where completion is
condition. Violations of such laws also could expose us and/or our employees to criminal sanctions, monitored; and messages from Shell leaders on
civil suits and other consequences, such as debarment and the revocation of licences. the importance of managing ABC/AML risks.
On July 21, 2022, the Dutch Public Prosecutor's
office announced it had dismissed its investigation
into bribery allegations related to OPL 245.

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Risk factors continued

Conduct and culture risks continued

Violations of data protection laws carry fines and expose us and/or See "Living by our values" on page 137.

our employees to criminal sanctions and civil suits.

Risk description How this risk is managed
Data privacy and the management of personal data have become an issue of increasing importance Over the last decade, the Shell Group has
and focus for companies and regulators in recent years. Following the implementation of the EU General continued to invest in and develop a mature and
Data Protection Regulation (GDPR) in May 2018, we have on a global basis seen updates to, or the robust privacy compliance programme based on
introduction of, data privacy laws largely based on the GDPR. More than 100 countries globally now our Binding Corporate Rules (BCRs). BCRs are
have data privacy laws. Shell companies are increasingly processing large volumes of personal data perceived as a positive mechanism by data privacy
as we continue to acquire small companies with relatively large amounts of customer data. In doing so, regulators for enabling lawful data sharing and
we must consider how we manage personal data effectively and responsibly, including managing the demonstrating accountability within large corporate
associated cyber risks. In some countries that are key to Shell's business operations, such as China, groups. BCRs allow intra-group transfers of personal
relevant legislation continues to be amended or introduced. Shell must be able to adapt dynamically data without needing to enter into additional
to such legislative changes and be capable of updating our internal programmes if necessary. Many complex intra-group agreements. The overall
countries require mandatory notification of data breaches often within short time frames (72 hours) in objective of the programme is to enable the
certain situations. In these circumstances we might be required to report to affected individuals and Shell Group of companies to collect, handle and
regulators in the relevant countries. Non-compliance with data protection laws could harm individuals manage personal data in a professional, ethical,
and expose us to regulatory investigations. This could result in fines, which could be up to 4% of global and lawful manner.
annual turnover if under the GDPR; orders to stop processing certain data; harm to our reputation; and
loss of the trust of existing and potential customers, stakeholders, governments, and employees. With Shell's Chief Privacy Officer also serves as the
regard to data breaches in the past, we notified a number of data privacy regulators of personal "Data Protection Officer" (DPO) under the EU's
data breaches and have had fines issued against us and this could happen in the future. In addition General Data Protection Regulation and other
to imposing fines, regulators may also issue orders to stop processing personal data, which could applicable data privacy laws, except where there
disrupt operations. We could also be subject to litigation from persons or entities allegedly affected is a requirement to have a locally based DPO,
by data protection violations. such as in China and the Philippines.

Violation of data protection laws is a criminal offence in some countries, and individuals can be Our staff receive guidance on the requirements
imprisoned or fined. Any violation of these laws could harm our reputation and have a material listed in Shell's Ethics and Compliance Manual,
adverse effect on our earnings, cash flows and financial condition. a website focusing on data privacy, training
modules where completion is monitored and
regular messages from Shell leaders on the
importance of managing data privacy risks.
We monitor new and imminent data privacy
legislation and seek to ensure we have a robust
impact assessment process in place for the relevant
businesses. We design our operations and
processes based on the relevant data privacy
requirements, and we build controls into our
processes and practices which cover the
handling of personal data.
We maintain a Group-wide incident management
process designed to immediately identify and
remediate data privacy breaches. The process also
helps us to comply with country-level requirements
for reporting breaches.
Some of our acquired companies are not yet in
full compliance with our Binding Corporate Rules.
Following assessments for each of those companies,
specific actions are planned and put in place to
achieve compliance, with regular updates made
on their progress to management.

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Risk factors continued

Conduct and culture risks continued

Violations of trade compliance laws and regulations, including sanctions, See "Living by our values" on page 138.

carry fines and expose us and our employees to criminal proceedings and
civil suits.
Risk description How this risk is managed
We use "trade compliance" as an umbrella term for various national and international laws designed to We continue to develop and maintain a trade
regulate the movement of items across national boundaries and restrict or prohibit trade, financial flows compliance programme with adequate resources,
and other dealings with certain parties, countries and territories. For example, the EU, the UK and the robust screening protocols, a comprehensive
USA continue to impose comprehensive sanctions on countries and territories such as Syria, North Korea, governance structure and established reporting
and Crimea and other territories in Eastern Ukraine. The USA continues to have comprehensive sanctions lines. Staff receive guidance on the requirements
against Iran and Cuba. The EU, the UK and some other nations such as Canada and Australia continue listed in Shell's Ethics and Compliance Manual,
to maintain targeted sanctions against Iran. The EU and the USA introduced sectoral sanctions against a specific website for trade compliance, training
Venezuela in 2017, which the USA expanded in 2018 and 2019 and relaxed temporarily in 2023. modules where completion is monitored
and messages from Shell leaders on the
Since 2014, the EU and the USA have imposed and increased restrictions and controls directed at importance of managing trade compliance
defined oil and gas activities in Russia, as well as restricting access to EU and USA financing sources risks. The effectiveness of the trade compliance
for certain Russian state-owned entities and military and dual-use controls. In February 2022, countries programme is assessed annually (or more
around the world began imposing additional sanctions and trade controls against Russia over its full-scale frequently if necessary) and we are continually
invasion of Ukraine, including regional trade bans, designations of entities (including Russian banks seeking ways to improve it.
and state-owned entities) and individuals as Specially Designated Nationals and Blocked Parties, and
restrictions on access by Russia to financial systems. In addition, the USA, the UK, Canada and Australia
have introduced restrictions on the import of Russian-origin LNG. These restrictions are subject to different
wind-down periods and limited exceptions. Furthermore, it is likely that sanctions against Russia will
continue to escalate. Russia has in turn adopted a significant number of countermeasures, including
making it an offence to take steps to comply with foreign sanctions.
Many other nations have adopted or expanded trade compliance programmes similar to those
administered by the EU, the UK and the USA. Intergovernmental cooperation in this area has increased
and there is growing pressure to enforce existing sanctions globally.
Abiding by all the laws and regulations on trade compliance is often complex and challenging because
of factors such as: the expansion of sanctions; the frequent addition of prohibited parties as well as other
measures; the number of markets in which we operate; the risk of differences in how jurisdictions apply
sanctions; and the large number of transactions we process. Shell has voluntarily self-disclosed potential
violations of sanctions in the past.
Any violation of sanctions could lead to loss of import or export privileges and significant penalties on or
prosecution of Shell or its employees. This could harm our reputation and have a material adverse effect
on our earnings, cash flows and financial condition.

The successful delivery of our strategy is dependent on our people and See "Our People" on pages 128-132, "Living by our
values" on page 137 and "Other regulatory and
on a culture that aligns to our goals and reflects the changes we need statutory information" on pages 223-224.
to make as part of the energy transition.
Risk description How this risk is managed
Shell's culture is defined as the shared values, practices and beliefs of its employees. It is influenced The Shell General Business Principles, Code of
by decisions on organisation structure and accountabilities, people and skills, how work is done using Conduct and Ethics and Compliance Manual help
processes and systems and what mindset and behaviours exist. All these elements need to act in harmony everyone at Shell act in line with our values.
to create our desired culture and ensure successful and sustained performance in line with our strategy.
Our Mindset and Behaviours framework, which
As the energy system transforms and we reshape our portfolio, elements of our culture will need to emphasises psychological safety, is at the heart
change. For example, we will have to develop new skills, and adapt processes and systems, which, in of our leadership programmes.
some areas, will need to be different from those required for our traditional oil and gas businesses. We
will have to continually leverage our learner mindset to anticipate and respond to the faster pace of We have set clear goals for diversity, equity and
change in the external market. However, we also will need to retain our shared values of "honesty, inclusion and monitor these on a regular basis.
integrity and respect for people" to ensure trust and openness in how we do business, and to ensure We also continually assess our culture and staff
staff feel valued and perform at their best. engagement through tools such as the annual
Shell People Survey.
If we fail to maintain a culture that aligns to our strategy, this could harm our reputation and have
a material adverse effect on our earnings, cash flows and financial condition. People development is a priority for our
organisation. We have increased learning offerings
related to new skills that may be needed, including
hydrogen production, carbon capture and storage,
and energy management. Where appropriate, we
recruit talent externally to add to the skills and
experiences of our workforce.
In 2023, we introduced the Shell Performance
Framework, replacing the Shell Control Framework
with an aim to ensure that all elements of culture
(structure and accountabilities, people and skills,
mindset and behaviours and processes and systems)
are leveraged to deliver on our strategy.

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Strategic Report

Risk factors continued

Investors should also consider the following, which could limit shareholder remedies.

Other (generally applicable to an investment in securities)

The Company's Articles of Association determine the jurisdiction for shareholder disputes. This could limit
shareholder remedies.
Risk description
Our Articles of Association generally require that all disputes between our shareholders in such capacity and the Company or our subsidiaries (or our Directors
or former Directors), or between the Company and our Directors or former Directors, be exclusively resolved by arbitration in London, the United Kingdom. Our
Articles of Association also provide that, if this provision were to be determined invalid or unenforceable for any reason, the dispute could only be brought before
the courts of England and Wales. Accordingly, the ability of shareholders to obtain monetary or other relief, including in respect of securities law claims, could be
determined in accordance with these provisions.

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Performance
in the year

Performance indicators Shell's journey in the energy transition

These indicators enable management to evaluate Contribution of low- 65 60 54

Shell's performance against our annual operating plan. carbon products (%)
They are also used as part of the determination of
Executive Directors' remuneration. See "Directors'
Remuneration Report" on pages 191-193.
2021 2022 2023
Safety remains our top priority. Sadly, five contractor colleagues The percentage of Marketing segment Adjusted Earnings from low-carbon
died in incidents that took place at Shell operations in 2023. energy products (on a life-cycle basis), defined as biofuels and electric vehicle
This is a reminder of our need to relentlessly focus on safety. charging, as well as non-energy products, defined as lubricants, bitumen,
sulphur, and earnings from convenience retail.
In 2023, we exceeded our targets for Financial delivery, Shell's journey
in the energy transition and Operational excellence.. See "Our journey to net zero" on page 95.

We had another year of very strong financial delivery with the

second-highest cash flow from operations in Shell's history, despite Reducing operational 3,988
the external uncertainty and volatility.
emissions (thousand 2,010
In Shell's journey in the energy transition we made good tonnes CO2) 1,081
progress on increasing the number of electric vehicle charge points
and reducing operational emissions. The contribution of low-carbon
2021 2022 2023
products in the Adjusted Earnings of the Marketing segment decreased
mainly due to lower lubricants demand and higher costs for low-carbon GHG abatement projects that resulted in sustained GHG reductions (e.g. flare
Mobility products. reduction projects or energy efficiency projects), site closures and decommissioning
or transformations, and use of renewable electricity for Scope 2 reductions.
Operational excellence ensures we deliver for our customers and
drive financial performance. We had good Project delivery outcomes See "Our journey to net zero" on pages 103-113.
in 2023 and the Customer excellence indicators were very positive.
Upstream controllable availability was outstanding but midstream
was impacted by unplanned maintenance. Chemicals and Refining Electric vehicle (EV) 196
139
availability was impacted by ongoing challenges at Shell Polymers charge points
Monaca, and the recovery after a fire in Deer Park. 86
(thousand)

Financial delivery
2021 2022 2023

Cash flow from 68 All charge points in Mobility which include both public out-of-home and Shell
54 Recharge Solutions.
operating activities 45
($ billion) See "Our journey to net zero" on pages 89-99.

2021 2022 2023

Cash flow from operating activities is the total of all the cash receipts and
payments associated with our sales of oil, gas, chemicals and other products.
The components that provide a reconciliation from income for the period are
listed in the "Consolidated Statement of Cash Flows". This indicator reflects our
ability to generate cash to service and reduce our debt, and for distributions
to shareholders and for investments.

See "Financial framework" on page 35.

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Performance indicators continued

Operational excellence

87 87.8 87.3
Project delivery 69
82 Upstream controllable 84.7
on schedule (%) availability (%)

2021 2022 2023 2021 2022 2023

Project delivery on schedule reflects our capability to complete major projects on Upstream controllable availability performance reflects our ability to optimally
time and within budget. Project delivery on schedule measures the percentage run our Upstream assets. Reliability issues, turnarounds and maintenance at own-
of projects delivered on schedule. operated or third-party facilities all impact controllable availability, but it excludes
the impact of extreme unexpected events that are outside our control, such as
government restrictions and hurricanes. Upstream controllable availability includes
Project delivery 105 all Shell-operated assets (excluding Groningen) and selected assets not operated
104
103 by Shell, but for which Shell has strategic influence.
on budget (%)
89.3 89.1
Midstream 87.3
availability (%)
2021 2022 2023
Project delivery on budget reflects the aggregate cost against the aggregate
baseline for those projects, where a figure greater than 100% means over budget.
2021 2022 2023

Customer 8.3 8.4 Midstream availability shows to what extent LNG assets are ready to process
8.2 product as a comparison with capacity, considering the impact of planned
satisfaction (index) and unplanned maintenance.

95.6 95.5
Refinery and chemical 91.2
2021 2022 2023 plant availability (%)
The customer satisfaction index (CSI) is the quantitative measurement of customer
experience (CX) performance. It is provided from the global transactional survey
programme (both email and digital surveys). CSI is calculated using simple
average methodology from individual customer responses/satisfaction scores 2021 2022 2023
(overall satisfaction with Shell) covering all businesses and countries.
Refinery and chemical plant availability is the weighted average of the
actual uptime of plants as a percentage of their maximum possible uptime.
Brand Share 14.2 14.2 The weighting is based on the capital employed, adjusted for cash and non-
13.8 current liabilities. This indicator is a measure of the operational excellence
Preference (%) of our refinery and chemical plant facilities.

See "Chemicals and Products" on page 69.

2021 2022 2023

Brand Share Preference is the percentage of customers who answer "Shell"
in response to the question: "Assuming that all the fuel station companies that
you would consider are conveniently located, which one company do you prefer
most?". Responses are taken from survey respondents in more than 60 countries
covering both fuel and non-fuel retail consumers.

Safety

6.9 103
Personal safety Process safety
(SIF-F cases per 100 (number of events) 66 63
million working hours) 2.0 [A] 2.6

2021 2022 2023 2021 2022 2023

Serious Injury, Illness and Fatality (SIF) is defined as a serious work-related injury A Tier 1 process safety event is an unplanned or uncontrolled release of any
or illness that resulted in a fatality or a life-altering event, which is defined as material, including non-toxic and non-flammable materials, from a process with
a long-term or permanent injury or illness with a significant impact on daily the greatest actual consequence resulting in harm to employees, contract staff,
activities. Serious Injury and Fatality Frequency (SIF-F) is calculated by dividing or a neighbouring community, damage to equipment, or exceeding a threshold
the number of employee and contractor SIF by 100 million working hours. quantity, as defined by the API Recommended Practice 754 and IOGP Standard
456. A Tier 2 process safety event is a release of lesser consequence.
See "Safety" on page 136.
See "Safety" on page 136.
[A] 2022 adjustment on SIF-F from 1.7 to 2.0 due to a change in classification for one injury
after publication.

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Generating shareholder value

Generating
shareholder
value
We are committed to
enhancing shareholder
distributions with a focus
on performance,
discipline and
simplification.

31 Shell Annual Report and Accounts 2023

Strategic Report | Performance in the year

Generating shareholder value

Group results
Key metrics Segment earnings*[A] [B]
$ million
$ million, except where indicated
2023 2022 2021
Income attributable to Shell plc Integrated 2021 8,060
shareholders 19,359 42,309 20,101 Gas
Income for the period 19,636 42,874 20,630 2022 22,212
Total segment earnings*[A] [B] 20,281 41,562 17,482 2023 7,046
Adjusted Earnings*[A] 28,250 39,870 19,289
Upstream 2021 9,603
Adjusted EBITDA*[A] 68,538 84,289 55,004
Cash flow from operating activities 54,191 68,414 45,104 2022 16,222

Cash flow from investing activities (17,734) (22,448) (4,761) 2023 8,528
Free cash flow* 36,457 45,965 40,343
Marketing 2021 3,535
Cash capital expenditure* 24,392 24,833 19,697
2022 2,133
Operating expenses*[C] 39,960 39,476 35,965
Underlying operating expenses*[C] 39,201 39,456 35,309 2023 2,950
ROACE on a Net Income basis* 8.4% 16.7% 8.8%
Chemicals 2021 404
ROACE on an Adjusted Earnings plus Non- and
controlling interest basis * 11.6% 15.8% 8.5% Products 2022 4,515
Total debt at December 31 [D] 81,541 83,795 89,086
2023 1,530
Net debt* at December 31 [D] 43,542 44,837 52,556
Renewables 2021 (1,514)
Gearing* at December 31 18.8% 18.9% 23.1%
and Energy
Oil and gas production available for sale Solutions 2022 (1,059)
(thousand boe/d) 2,791 2,864 3,237
2023 3,038
Proved oil and gas reserves at December 31
(million boe) 9,787 9,578 9,365 Corporate 2021 (2,606)
Basic earnings per share ($) 2.88 5.76 2.59
2022 (2,461)
Adjusted Earnings per share* ($) 4.20 5.43 2.49
Dividend per share ($) 1.2935 1.0375 0.8935 2023 (2,811)
[A] Segment earnings, Adjusted Earnings and Adjusted EBITDA are presented on a current
cost of supplies basis.
[B] See Note 7 to the "Consolidated Financial Statements".
[C] The most comparable GAAP financial measure is Production and manufacturing expenses
(2023: $25 billion, 2022: $26 billion).
[D] See Note 20 to the "Consolidated Financial Statements".

Earnings 2023-2022 the net effect of lower realised prices, and higher contributions from
Income attributable to Shell plc shareholders in 2023 was $19,359 trading and optimisation, unfavourable deferred tax movements,
million, compared with $42,309 million in 2022. With non-controlling and lower volumes.
interest included, income for the period in 2023 was $19,636 million,
compared with $42,874 million in 2022. After current cost of supplies See "Integrated Gas" on page 41.
adjustment, total segment earnings*in 2023 were $20,281 million,
compared with $41,562 million in 2022.
Upstream earnings*in 2023 were $8,528 million, compared with
Adjusted Earnings* in 2023 were $28,250 million, compared with $16,222 million in 2022. The decrease was mainly driven by lower
$39,870 million 2022. The decrease was mainly driven by lower realised oil and gas prices, lower volumes, and net impairment charges
realised oil and gas prices, lower volumes and lower refining margins, and reversals.
partly offset by higher LNG trading and optimisation margins, and
higher Marketing margins. See "Upstream" on page 47.

2023 income attributable to Shell plc shareholders also included net

impairment charges and reversals of $6,219 million, and unfavourable Marketing earnings* in 2023 were $2,950 million, compared with
movements of $1,284 million due to the fair value accounting of $2,133 million in 2022. The increase was mainly driven by higher
commodity derivatives. These charges and unfavourable movements Marketing margins, including higher unit margins in Mobility, higher
are included in identified items amounting to a net loss of $8,252 million. margins in Lubricants due to lower feedstock costs, and higher volumes
in Sectors and Decarbonisation. These were partly offset by higher
Integrated Gas earnings*in 2023 were $7,046 million, compared operating expenses and depreciation charges, mainly as a result of
with $22,212 million in 2022. The decrease was mainly driven asset acquisitions.
by unfavourable movements due to the fair value accounting of
commodity derivatives, net impairment charges and reversals, See "Marketing" on page 63.

* Non-GAAP measure (see page 365).

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Generating shareholder value | Group results continued

Chemicals and Products earnings* in 2023 were $1,530 million, Return on average capital employed
compared with $4,515 million in 2022. The decrease was mainly Our return on average capital employed (ROACE)* decreased to 8.4%,
driven by net impairment charges and reversals, and lower Products compared with 16.7% in 2022, mainly driven by lower earnings.
margins, which were mainly driven by lower refining margins and partly
offset by higher margins from trading and optimisation. Segment Total debt, Net debt and gearing
earnings also reflected higher depreciation charges, due to start-up Total debt was $81,541 million at the end of 2023, compared with
of operations at Shell Polymers Monaca in the USA, partly offset $83,795 million at the end of 2022.
by higher Chemicals margins.
Net debt* was $43,542 million at the end of 2023, compared with
See "Chemicals and Products" on page 68.
$44,837 million at the end of 2022.

Gearing* was 18.8% at the end of 2023, compared with 18.9% at the
Renewables and Energy Solutions earnings* in 2023 were $3,038 end of 2022.
million, compared with a loss of $1,059 million in 2022. The increase
was mainly driven by favourable movements due to the fair value Significant accounting estimates and judgements
accounting of commodity derivatives. This was partly offset by lower See Note 2 to the "Consolidated Financial Statements" on pages
margins, mainly from trading and optimisation due to lower gas 249-259.
and power prices in 2023, net impairment charges and reversals,
unfavourable tax movements and higher operating expenses. Legal proceedings
See Note 31 to the "Consolidated Financial Statements" on pages
See "Renewables and Energy Solutions" on page 75.
312-314.

Production available for sale

Corporate segment earnings* in 2023 were an expense of Oil and gas production available for sale in 2023 was 2,791 thousand
$2,811 million, compared with an expense of $2,461 million in 2022. boe/d, compared with 2,864 thousand boe/d in 2022. This reduction
The rise in expense was mainly driven by unfavourable movements was mainly driven by divestments and partly offset by growth from
in currency exchange rate effects and tax credits. new fields.

See "Corporate" on page 79. Oil and gas production available for sale [A]

Thousand boe/d
Prior year earnings summary 2023 2022 2021
Our earnings summary for the financial year ended December 31,
Crude oil and natural gas liquids 1,454 1,460 1,685
2022, compared with the financial year ended December 31, 2021,
can be found in the Annual Report and Accounts (page 29) and Synthetic crude oil 52 46 54
Form 20-F (page 33) for the year ended December 31, 2022, Natural gas [B] 1,285 1,357 1,498
as filed with the Registrar of Companies for England and Wales Total 2,791 2,864 3,237
and the US Securities and Exchange Commission, respectively.
Of which:
Cash flow from operating activities Integrated Gas 939 921 1,004
Cash flow from operating activities was $54,191 million in 2023, Upstream 1,800 1,897 2,178
compared with $68,414 million in 2022. The cash flow from operating
Oil sands (part of Chemicals and Products) 52 46 54
activities in 2023 was primarily driven by Adjusted EBITDA, and
working capital inflow of $7.8 billion, partly offset by tax payments [A] See "Oil and gas information".
[B] Natural gas volumes are converted into oil equivalent using a factor of 5,800 scf
of $13.7 billion, and derivatives outflow of $6.1 billion. per barrel.

Cash capital expenditure Proved reserves

Cash capital expenditure* was $24,392 million in 2023, compared The proved oil and gas reserves of Shell subsidiaries and the
with $24,833 million in 2022. The cash capital expenditure in 2023 Shell share of the proved oil and gas reserves of joint ventures and
consisted of $12.5 billion investments in oil, oil products and other, associates are summarised in "Oil and gas information" on pages
$5.6 billion investments in low-carbon energy solutions, $4.0 billion 55-62 and set out in more detail in "Supplementary information –
investments in LNG gas and power marketing and trading and oil and gas (unaudited)" on pages 317-335.
$2.3 billion investments in non-energy products.
Before taking production into account, our proved reserves increased
See "Our journey to net zero" on page 95. by 1,274 million boe in 2023. Total oil and gas production was
1,065 million boe. Accordingly, after taking production into account,
our proved reserves increased by 209 million boe in 2023, to
Operating expenses and Underlying operating expenses 9,787 million boe at December 31, 2023.
Operating expenses* were $39,960 million in 2023, compared
with $39,476 million in 2022. Underlying operating expenses*
were $39,201 million, compared with $39,456 million in 2022.

* Non-GAAP measure (see page 365).

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Financial framework sources (capital markets) and to undrawn committed borrowing

facilities to meet foreseeable requirements.
We manage our businesses to deliver strong cash flows, sustain our
While our subsidiaries are subject to restrictions, such as foreign
strategy and create profitable growth. Management applies Shell's
withholding taxes on the transfer of funds in the form of cash dividends,
cash to support disciplined capital expenditure and maintain a resilient
loans or advances, such restrictions are not expected to have a
balance sheet; target AA credit metrics through the cycle; deliver
material impact on our ability to meet our cash obligations.
a progressive dividend to shareholders with growth of around 4%
annually (subject to Board approval); and target total distributions
Market risk and credit risk
to shareholders of 30-40% of our cash flow from operating activities
We are affected by the global macroeconomic environment, as well as
through the cycle.
financial and commodity market conditions. This exposes us to treasury
and trading risks, including liquidity risk, credit risk, and market risk
The Board may choose to return cash to shareholders through a
(interest rate risk, foreign exchange risk and commodity price risk).
combination of dividends and share buybacks. When setting the level
The size and scope of our businesses require a robust financial control
of shareholder distributions, the Board looks at a range of factors,
framework and effective management of our various risk exposures.
including the macro environment, the underlying business earnings and
cash flows of the Group, the current balance sheet, future investment,
acquisition and divestment plans, and existing commitments. See "Risk factors" on page 22 and Note 25 to the "Consolidated Financial Statements"
on pages 302-308.
Liquidity and capital resources
Shell generated free cash flow* of $36.5 billion in 2023, aided
We use various financial instruments for managing exposure to
by disciplined capital management, portfolio simplification and
commodity price, foreign exchange and interest rate movements.
operational performance improvements. Net debt* decreased to
Our treasury and trading operations are highly centralised and seek
$43.5 billion at December 31, 2023 (December 31, 2022: $44.8
to manage credit exposures associated with our substantial cash,
billion). Total debt reduced to 81.5 billion at December 31, 2023
commodity, foreign exchange and interest rate positions. Our portfolio
(December 31, 2022: 83.8 billion), Gearing* decreased to 18.8% at
of cash investments is diversified to avoid concentrating risk in any
December 31, 2023, compared with 18.9% at December 31, 2022.
one instrument, country or counterparty. The use of external derivative
instruments is confined to specialist trading and central treasury
See Note 20 to the "Consolidated Financial Statements" on pages 288-289. organisations that have robust control and reporting systems, and
employees with appropriate skills, experience and supervision. Credit
risk policies are in place to ensure that sales of products are made
Liquidity
to customers with appropriate creditworthiness, and include credit
We satisfy our funding, liquidity and working capital requirements by
analysis and monitoring of customers against counterparty credit
using cash generated from our operations, the issuance of debt and
limits. Where appropriate, netting arrangements, credit insurance,
through divestments. In 2023, access to the international debt capital
prepayments and collateral are used to manage credit risk.
markets remained strong, with our debt principally financed from
these markets through central debt programmes consisting of:
In effecting commodity trades and derivative contracts, we operate
￮ a $10 billion global commercial paper (CP) programme, with
according to internal procedures and policies designed to ensure that
maturities between 183 days and 364 days;
market risks are managed within authorised limits and trading can only
￮ a $10 billion US CP programme, with maturities not exceeding
be performed by staff with the appropriate skills and experience. We
397 days;
closely monitor developments in sanctions and export controls to ensure
￮ an unlimited Euro medium-term note (EMTN) programme (also
compliance with applicable laws and regulatory guidance. Management
referred to as the Multi-Currency Debt Securities Programme); and
regularly reviews mandated trading limits. A department that is
￮ an unlimited US universal shelf (US shelf) registration.
independent from our traders monitors our market risk exposures daily,
using value-at-risk techniques alongside other risk metrics as appropriate.
The CP, EMTN and US shelf debt is issued by Shell International
Finance B.V., the issuance company for Shell, with its debt being
Pension commitments
guaranteed by Shell plc. In the future, Shell will also be able to issue
We have substantial pension commitments, the funding of which is
debt through a new US subsidiary, Shell Finance US Inc., with
subject to capital market risks. We address key pension risks in a number
its debt also being guaranteed by Shell plc.
of ways. A pensions forum, chaired by the Chief Financial Officer,
oversees Shell's input to pension strategy, policy and operation. A risk
We also maintain committed credit facilities. Of the $9.92 billion total
committee supports the forum in reviewing the results of assurance
facility, $1.92 billion matures in 2024 (with a one-year bank extension
processes with respect to pension risks. Local trustees manage the funded
option, taking final maturity to 2025) and $8.0 billion in 2026. This
defined benefit pension plans and set the strategic asset allocation for
remained fully undrawn at December 31, 2023. These core facilities
the plan, including the extent to which currency, interest rate and
and cash on balance sheet provide back-up coverage for our CP
inflation risks are hedged. The contributions paid are based on
programmes. Other than certain borrowings by subsidiaries in their
independent actuarial valuations that align with applicable local
local jurisdictions, we do not have any other committed credit facilities.
regulations. Pension fund liquidity is managed by holding appropriate
liquid assets and maintaining credit facilities. Where appropriate,
Our total debt decreased by $2.3 billion to $81.5 billion at December
transactions to transfer pension liabilities to third parties are also
31, 2023. The total debt excluding lease liabilities matures as follows:
considered. Our total employer contributions were $0.7 billion
10% in 2024; 12% in 2025; 7% in 2026; and 71% in 2027 and
in 2023 and are estimated to be $0.5 billion in 2024.
beyond. The portion of debt maturing in 2024 is expected to be
repaid from some combination of cash balances, cash generated from
operations, divestments and the issuance of new debt. In 2023, we did See "Risk factors" on page 23 and Note 23 to the "Consolidated Financial Statements"
not issue any bonds under our US shelf registration, EMTN programme on pages 294-300.

or CP programmes. The Group had no CP outstanding at December 31,

2023. Management believes it has access to sufficient debt funding * Non-GAAP measure (see page 365).

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Generating shareholder value | Financial framework continued

Capitalisation table Cash flow from operating activities

The most significant factors affecting our cash flow from operating
$ million activities are earnings, which are mainly impacted by: realised prices
December December for crude oil, natural gas and LNG; production levels of crude oil,
31, 2023 31, 2022 natural gas and LNG; chemicals, refining and marketing margins;
Equity attributable to Shell plc shareholders 186,607 190,472 and movements in working capital and derivative financial instruments.
Current debt 9,931 9,001
The impact on earnings from changes in market prices depends
Non-current debt 71,610 74,794 on: the extent to which contractual arrangements are tied to market
Total debt [A] 81,541 83,795 prices; the dynamics of production-sharing contracts; the existence of
Total capitalisation 268,148 274,267
agreements with governments or state-owned oil and gas companies
that have limited sensitivity to crude oil and natural gas prices; tax
[A] Of total debt of $81.5 billion (2022: $83.8 billion), $53.4 billion (2022: $55.2 billion) impacts; and the extent to which changes in commodity prices flow
was unsecured and $28.2 billion (2022: $28.6 billion) was secured. $48.4 billion was
issued by Shell International Finance B.V., a wholly owned subsidiary of Shell plc with its
through into operating expenses. Changes in benchmark prices of
debt guaranteed by Shell plc (December 31, 2022: $51.0 billion). See Note 20 to the crude oil and natural gas in any particular period provide only a broad
"Consolidated Financial Statements" for further disclosure on total debt and Net debt. indicator of changes in our Integrated Gas and Upstream earnings
in that period. Changes in any factors, from within the industry or the
Guarantees and other off-balance sheet arrangements broader economic environment, can influence refining and marketing
There were no guarantees or other off-balance sheet arrangements margins. The precise impact of any changes depends on how the oil
at December 31, 2023, or December 31, 2022, that were reasonably markets respond to them. The market response is affected by factors
likely to have a material effect on Shell. such as: whether the change affects all crude oil types or only a specific
grade; regional and global crude oil and refined products inventories;
Consolidated Statement of Cash Flows and the collective speed of response of refiners and product marketers
Cash flow from operating activities in 2023 was $54.2 billion, in adjusting their operations. As a result, margins fluctuate from region
compared with $68.4 billion in 2022. The cash flow from operating to region and from period to period.
activities in 2023 was primarily driven by Adjusted EBITDA, and
working capital inflow of $7.8 billion (compared with working capital Divestment and cash capital expenditure
outflow of $5.4 billion in 2022), partly offset by tax payments of The levels of divestment proceeds and cash capital expenditure in
$13.7 billion (compared with tax payments of $13.1 billion in 2022), 2023 and 2022 reflect our discipline and focus as we implement
and derivatives outflow of $6.1 billion (compared with derivatives our Powering Progress strategy. Proceeds from sale of property, plant
inflow of $0.6 billion in 2022). and equipment and businesses were $2.6 billion for 2023, compared
with $1.4 billion in 2022 and divestment proceeds* for 2023 were
Cash flow from investing activities in 2023 was an outflow of $3.1 billion, compared with $2.1 billion in 2022. Cash capital
$17.7 billion, compared with an outflow of $22.4 billion in 2022. expenditure split per segment is presented in the table below:
The cash flow from investing activities in 2023 included cash capital
expenditure* of $24.4 billion (compared with cash capital expenditure
Cash capital expenditure*
of $24.8 billion in 2022), divestment proceeds* of $3.1 billion
(compared with divestment proceeds of $2.1 billion in 2022), interest $ million
received of $2.1 billion (compared with interest received of $0.9 billion
2023 2022 2021
in 2022), and net other investing cash inflows of $1.4 billion (compared
with net other investing cash outflows of $0.6 billion in 2022). Integrated Gas 4,196 4,265 3,502
Upstream 8,343 8,143 6,168
Cash flow from financing activities in 2023 was an outflow of Marketing [A] 5,612 4,831 2,273
$38.2 billion, compared with outflows of $42.0 billion in 2022, mainly
due to lower repurchases of shares of $14.6 billion (2022: $18.4 Chemicals and Products 3,192 3,838 5,175
billion) and Derivative financial instruments favourable movement of Renewables and Energy Solutions [B] 2,681 3,469 2,359
$0.7 billion (2022: $1.8 billion unfavourable movement), partly offset Corporate 368 287 220
by higher net repayment of debt of $9.8 billion (2022: $7.9 billion
Total cash capital expenditure 24,392 24,833 19,697
net repayment).
[A] Includes acquisition of Nature Energy in 2023.
Cash and cash equivalents were $38.8 billion at December 31, [B] Includes acquisition of Sprng in 2022 and Savion in 2021.

2023 (December 31, 2022: $40.2 billion).

Prior year Consolidated Statement of Cash Flows

Our Consolidated Statement of Cash Flows for the financial year
ended December 31, 2022, compared with the financial year ended
December 31, 2021, can be found in the Annual Report and Accounts
(page 241) and Form 20-F (page 219) for the year ended December
31, 2022, as filed with the Registrar of Companies for England and
Wales and the US Securities and Exchange Commission, respectively.

See "Consolidated Statement of Cash Flows" on page 248.

* Non-GAAP measure (see page 365).

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Contractual obligations
The table below summarises our principal contractual obligations at December 31, 2023, by expected settlement period. The amounts presented
have not been offset by any committed third-party revenue in relation to these obligations.

Contractual obligations

$ billion
Less than 1 Between Between 5 years
year 1 and 3 years 3 and 5 years and later Total
Debt [A] 5.4 10.4 8.3 30.4 54.4
Leases 6.2 9.5 6.6 16.8 39.1
Purchase obligations [B] 33.1 28.1 14.0 59.6 134.8
Other long-term contractual liabilities [C] 0.1 0.9 0.1 0.5 1.7
Total 44.7 49.0 29.1 107.2 230.0

[A] See Note 20 to the "Consolidated Financial Statements". Debt contractual obligations exclude interest, which is estimated to be $1.6 billion payable in less than one year, $2.7 billion
between one and three years, $2.4 billion between three and five years, and $13.4 billion in five years and later. For this purpose, we assume that interest rates with respect to variable
interest rate debt remain constant at the rates in effect at December 31, 2023, and that there is no change in the aggregate principal amount of debt other than repayment at scheduled
maturity as reflected in the table. Lease contractual obligations include interest.
[B] Purchase obligations disclosed in the above table exclude commodity purchase obligations that are not fixed or determinable and are principally intended to be resold in a short period of
time through sale agreements with third parties. Examples include long-term non-cancellable LNG and natural gas purchase commitments and commitments to purchase refined products or
crude oil at market prices. Inclusion of such commitments would not be meaningful in measuring liquidity and cash flow, as the cash outflows generated by these purchases will generally be
offset in the same periods by cash received from the related sales transactions.
[C] Includes obligations included in "Trade and other payables" and provisions related to onerous contracts included in "Decommissioning and other provisions" in "Non-current liabilities" in the
"Consolidated Balance Sheet" that are contractually fixed as to timing and amount. In addition to these amounts, Shell has certain obligations that are not contractually fixed as to timing and
amount, including contributions to defined benefit pension plans (see Note 23 to the "Consolidated Financial Statements") and obligations associated with decommissioning and restoration
(see Note 24 to the "Consolidated Financial Statements").

Dividends During 2023, 479.4 million ordinary shares were purchased

Subject to Board approval, Shell aims to grow the dividend per and cancelled. Overall, a total nominal share value of €34 million
share by around 4% every year. In total, Shell targets the distribution ($40 million), 6.8% of the Company's total issued share capital at
of 30--40% of our cash flow from operations through the cycle to December 31, 2022, was purchased and cancelled during 2023 for
shareholders. Shell may choose to return cash to shareholders a total cost of $14.6 billion, including expenses, at an average price
through a combination of dividends and share buybacks. of $30.43 per share.

When setting the level of shareholder distributions, the Board looks at The buybacks completed in the first half of 2023 were in accordance
a range of factors, including the macro environment, the earnings and with the authorities granted by shareholders at the 2022 Annual
cash flows of the Group, the current balance sheet, future investment, General Meeting (AGM). The buybacks completed in the second
acquisition and divestment plans and existing commitments. We half of 2023 were in accordance with the authorities granted by
returned $8.4 billion to our shareholders through dividends and shareholders at the 2023 AGM. At the 2023 AGM, authority was
$14.6 billion through share buybacks in 2023. Total shareholder granted for the Company to repurchase up to a maximum of 10% of its
distributions represented 42% of cash flow from operating activities*. issued ordinary shares, excluding treasury shares, (692 million ordinary
shares), both on and off market, allowing purchases on Amsterdam as
The fourth quarter 2023 dividend of $0.344 per share will be paid well as London exchanges. As at December 31, 2023, 512 million
on March 25, 2024, to shareholders on the register at February 16, ordinary shares could still be repurchased under the current AGM
2024, and represents an increase of 4% compared with the third authorities. The purpose of the share repurchases in 2023 was to
quarter of 2023. reduce the issued share capital of the Company.

See Note 29 to the "Consolidated Financial Statements" on page 312.

New resolutions will be proposed at the 2024 AGM to renew the
authority for the Company to purchase its own share capital, up to
specified limits, for a further year. These proposals will be described
Purchases of securities in more detail in the 2024 Notice of Annual General Meeting.
The intent to purchase shares was announced alongside the quarterly
results during 2023, and covered the period up until the next quarterly Shares are also purchased by the employee share ownership
announcement. In 2023, share buybacks of $4 billion were announced trusts and trust-like entities (see Note 27 to the "Consolidated
on February 2, $4 billion on May 4, $3 billion on July 27 and Financial Statements" on page 309) to meet delivery commitments
$3.5 billion on November 2 (finalised in the first quarter of 2024). under employee share plans. All share purchases are made in
In addition, on February 1, 2024, a further buyback of $3.5 billion open-market transactions.
was announced along with the fourth quarter 2023 results; it is
intended that this will be completed by the announcement date The table on the next page provides information on purchases of shares
of the first quarter 2024 results. in 2023 and January 2024 by the Company and affiliated purchasers.
Purchases in euros and sterling are converted into dollars using the
* Non-GAAP measure (see page 365). exchange rate on each transaction date.

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Purchases of equity securities by issuer and affiliated purchasers in 2023 [A]

Euro Shares GBP Shares ADSs [B]

Number Number Number Number Number
purchased purchased Weighted purchased purchased for Weighted purchased Weighted
for employee for cancellation average for employee cancellation average for employee average
Purchase period share plans [C] price ($)[D] share plans [C] price ($)[D] share plans price ($)[D]
January — 3,902,011 28.34 — 24,834,916 28.82 808,490 55.87
February — 20,898,179 30.14 — 21,394,954 30.10 — —
March — 38,967,828 28.79 — 38,609,399 28.69 43,473 56.24
April — — — — 16,525,479 30.28 — —
May — 30,080,360 29.77 — 21,885,562 29.44 — —
June — 28,936,231 29.51 — 20,935,786 29.08 20,630 59.93
July — 10,731,810 29.95 — 26,627,705 29.94 — —
August — 18,948,478 30.66 — 12,520,862 30.25 — —
September — 11,763,447 32.11 — 7,852,588 25.70 533,346 64.88
October 739,283 14,221,426 32.93 217,618 25,366,076 32.40 1,440,509 66.02
November 5,906,655 20,450,532 32.95 1,703,851 20,831,873 32.47 1,558,442 65.97
December 4,803,972 22,460,338 32.47 967,773 21,415,661 31.94 1,118,693 64.60
Total 2023 11,449,910 221,360,640 30.66 2,889,242 258,800,861 30.27 5,523,583 64.02
January 3,187,890 2,992,417 32.32 1,189,886 20,282,994 31.54 650,966 66.03
Total 2024 3,187,890 2,992,417 32.32 1,189,886 20,282,994 31.54 650,966 66.03

[A] Reported as at transaction date.

[B] American Depositary Shares.
[C] Under the share buyback programme.
[D] Includes stamp duty and brokers' commission.

Financial information relating to the Royal Dutch Shell On January 29, 2022, one line of shares was established through
Dividend Access Trust assimilation of each A share and each B share into one ordinary share
The results of the Royal Dutch Shell Dividend Access Trust (the Trust) of the Company. This assimilation had no impact on voting rights or
are included in the consolidated results of operations and financial dividend entitlements. Dutch withholding tax, applied previously on
position of Shell. Certain condensed financial information in respect dividends on A shares, no longer applies on dividends paid on the
of the Trust is given below. ordinary shares following the assimilation.

The Shell Transport and Trading Company Limited and BG Group In relation to the assimilation of the Company's A and B shares, the
Limited have each issued a dividend access share to Computershare Trust will continue in existence for the foreseeable future to facilitate
Trustees (Jersey) Limited (the Trustee). For the years 2023, 2022 the payment of unclaimed dividend liabilities for shareholders of the
and 2021, the Trust recorded income before tax of £nil, £nil, and former B shares until these are either claimed or forfeited in line with
£2.2 billion respectively. In each period, this reflected the amount the terms outlined. Dividends which are unclaimed after six years will
of dividends payable on the dividend access shares. Dividends be forfeited and unconditionally revert to The Shell Transport and
are also classified as unclaimed where amounts have not cleared Trading Company Limited and BG Group Limited, as appropriate.
recipient bank accounts.

At December 31, 2023, the Trust had total equity of £nil (December 31,
2022: £nil; December 31, 2021: £nil), reflecting assets of £4 million
(December 31, 2022: £6 million; December 31, 2021: £7 million) and
unclaimed dividends of £4 million (December 31, 2022: £6 million;
December 31, 2021: £7 million). The Trust only records a liability for
an unclaimed dividend to the extent that dividend cheque payments
have not been presented within 12 months, have expired or have
been returned unpresented. As these unclaimed dividends relate to
dividends that were announced by the Company during the period the
Company was still named Royal Dutch Shell plc, and it is expected that
the Company will not announce any further dividends on the dividend
access shares, the Trust continues to be named the Royal Dutch Shell
Dividend Access Trust.

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Market overview Looking to 2024, the IMF's projections for the global economy are
consistent with a soft landing, with inflation declining and growth
holding up despite the rise in interest rates. But there are several
Shell maintains a large business portfolio across an integrated value
downside risks to the outlook. These include: volatile commodity prices
chain and is exposed to fluctuating prices of crude oil, natural gas,
amid geopolitical and climate change risks; and upward surprises in
oil products, chemicals and power.
inflation and a corresponding tightening of financial conditions and
fiscal consolidation that could weigh on growth. The IMF projects
See "Risk factors" on page 14. global growth to be around 3% over the medium term (2024-2028) —
below the historical average of 3.8% over the past two decades. In the
context of geopolitical risks, this is in an environment where interest
This diversified portfolio provides resilience when prices are volatile.
rates are expected to be higher for longer.
Our annual planning cycle and periodic portfolio reviews aim to
ensure that our levels of capital investment and operating expenses
Global prices, demand and supply
are appropriate in the context of a volatile price environment.
The following table provides an overview of the main crude oil
and natural gas price markers to which Shell is exposed:
We prepare annual strategic and financial plans that test different
scenarios and their impact on prices, our businesses and organisation.
We test the resilience of our projects and other opportunities against Oil and gas average industry prices [A]
a range of prices for crude oil, natural gas, oil products, chemicals
2023 2022 2021
and power. Through this process, we identify potential interventions
that we believe can drive value, preserve cash levels and maintain a Brent ($/b) 83 101 71
strong balance sheet. This provides us with resilience against weak West Texas Intermediate ($/b) 78 95 68
market prices. Henry Hub ($/MMBtu) 2.5 6.4 4.0
EU TTF ($/MMBtu) 13 40 16
The range of commodity prices and margins used in our project and
portfolio evaluations is subject to a rigorous assessment of short-, Japan Customs-cleared Crude ($/b) - 3 months 89 98 60
medium- and long-term market drivers. These drivers include the [A] Yearly average prices are based on monthly average spot prices. The 2023 average price
extent and pace of the energy transition. for Japan Customs-cleared Crude is based on available market information up to the end
of the period.

Crude oil and oil products

The global benchmark oil price Brent averaged about $83 per
barrel (bbl) in 2023, down from $101/bbl in 2022. This reflected
a normalisation of the market from the period of significant volatility
in 2022. As trade flows adjusted after the disruption caused by the
Russian invasion of Ukraine and more supply became available,
supply security concerns have eased and the market balance
loosened in 2023.

Global demand continued to recover in 2023, at a similar pace

to 2022. Incremental demand has amounted to around 2.3 million
barrels per day (mb/d), of which 1.7 mb/d came from China, where
demand rebounded after the lifting of COVID-19 restrictions. However,
demand growth in OECD markets, particularly OECD Europe, has
Photo: Shell staff working on the trading floor at Shell Centre, London.
moderated significantly because of slower economic growth.

Global economic growth Global supply increased by around 1.9 mb/d in 2023, slightly slower
After a strong economic recovery from the lows of the COVID-19 than demand growth. Most of the non-OPEC growth has come from the
pandemic, growth in 2023 was more moderate. Several forces are USA and Brazil, which accounted for around 1.5 mb/d and 0.4 mb/d,
holding global economic growth back. These include the Russia- respectively. Iran, which is exempt from the OPEC production cut, has
Ukraine war and international trade restrictions. Others are more also markedly ramped up supply. To balance the market, OPEC+, led
cyclical and include the effects of sharp interest rate increases and by Saudi Arabia and Russia, implemented a series of moves to limit
liquidity withdrawals by central banks intended to rein in inflation. the supply available to the market. In April 2023, OPEC+ announced
Rising public debt is also resulting in governments withdrawing the a 1.66 mb/d voluntary production cut. This was followed by an
fiscal support they extended during the pandemic. additional 1 mb/d voluntary cut by Saudi Arabia from May, which
was eventually extended through to the first quarter of 2024, with
The latest World Economic Outlook, published by the International possibility for a further extension. Russia also announced a production
Monetary Fund (IMF) in January 2024, estimated global economic cut of 500 thousand barrels a day (kb/d) for March through to the end
growth from 2022 to 2023 to be 3.1%, down from 3.5% in 2022 and of 2023, in addition to a 300 kb/d exports reduction from September
6.3% in 2021. Advanced economies continue to drive the decline in to the end of the year. The actual crude output from Saudi Arabia and
global growth, with weaker manufacturing offsetting stronger services Russia dropped by around 1 mb/d and 0.2 mb/d, respectively in 2023
activity. The slowdown was pronounced in Europe, while the USA compared with 2022, based on the IEA estimate.
remained relatively resilient. Developing economies, on average,
have experienced stable growth over 2022-2023, although with
sizeable shifts across regions. China experienced relatively strong
growth, despite headwinds from its real estate crisis and weak
consumer confidence.

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In 2024, the expected economic slowdown and potential supply Power

disruptions caused by geopolitical tensions could impact demand. United States: US power prices were largely lower across all major
Macroeconomic risks and demand concerns had already started markets in 2023 compared with 2022. One of the key drivers for
weighing on the market from the fourth quarter, with Brent dropping the overall lower power prices and volatility in 2023 was the decline
by $16/bbl by the end of 2023 from the year's peak. The instability in in gas prices. After a volatile 2022, where prices ranged from below
the Middle East remains a significant risk factor. As of now, conflicts in $4/MMBtu to nearly $10/MMBtu, Henry Hub, the benchmark gas
the vicinity of key oil trade routes, such as the Red Sea, have not yet price in North America, stayed mostly below $3/MMBtu for most of
caused severe disruption to supplies. But the risk of disruption could 2023. Power price volatilities were largely driven by weather events
increase if the Israel-Hamas war escalates into a regional conflict. throughout the year and across the country. For the western part of
the USA, colder than normal temperatures that started in December
Natural gas 2022 lingered through March, resulting in strong prices in Mid-C (Mid-
Gas market Columbia) ($108/MWh) and CAISO (California) ($92/MWh) in the
Weak demand, combined with high inventories, has put downward first quarter of 2023. For the eastern part of the USA, a combination
pressure on natural gas prices in key markets in 2023. Although prices of a warm winter and mild summer brought stable prices across the
were lower than 2022 levels, they remained elevated versus historical PJM and MISO (Midcontinent) markets. For Texas, record-breaking
levels and continued to show strong volatility. summer temperatures resulted in strong price performance. ERCOT
(Texas) market prices spiked over $5,000/MWh in June, August
Title Transfer Facility (TTF): In Europe, TTF spot prices averaged and September, with On-Peak prices averaging $282/MWh for
$13.15/MMBtu (62% lower year-on-year). Strong LNG imports August and $121/MWh for September.
and weak regional demand enabled European inventories to
reach 110 billion cubic metres (bcm), almost 100% full at the end Europe: European power prices came down from the record levels
of October. By year-end, inventories fell to 95 bcm (86%), which in 2022, but were still elevated. In Germany, for example, the average
is still a comfortable level for that time of the year. Despite storages power price in 2023 was around $103/MWh, down from an average
at multi-year highs, supply-side risks in the Middle East, and the threat price of $248/MWh in 2022. German power prices were still
of renewed industrial action in Australia, increased price volatility in significantly higher than the average price of $38/MWh in the period
October, with spot TTF prices surging to $17.0/MMBtu by the middle 2015-2019. Power prices are primarily driven by natural gas prices,
of the month, a 40% increase from the start of the month. By year-end, which were lower in 2023 than in 2022, but still more than double the
prices retreated to $12.66/MMBtu as Egyptian exports and Israeli average of around $5.6/MMBtu between 2015 and 2019. In addition,
pipeline flows resumed and inventories remained elevated. the availability of both hydropower and French nuclear power plants
was markedly better in 2023 than in 2022, resulting in lower power
Japan Korea Marker (JKM): Spot LNG prices in Asia followed a similar prices. The continued deployment of solar and wind capacity is
trajectory as in Europe, averaging $14.03/MMBtu (48% lower year- progressively affecting power system operations, which can be
on-year). LNG demand in China remained subdued in 2023, relative to seen from the impact of weather on hourly prices.
previous years. The return of incremental nuclear capacity in Japan has
kept inventories at elevated levels through much of the year, capping Australia: The power and gas markets in Eastern Australia began 2023
the upside in prices. with firm price caps on gas and coal after extreme price volatility in
2022. This -- combined with lower demand because of milder winter
Henry Hub: Henry Hub gas benchmark prices in North America had weather, improved coal generator availability and continued growth
a less volatile year compared with 2022. Spot prices ranged from in renewable generation -- reduced tightness in international markets.
$1.77/MMBtu to $3.77/MMBtu with an average of $2.54/MMBtu. Healthy domestic gas storage and stronger winter flows from LNG
The lower volatility was attributable to a warm first quarter, cool producers to southern markets moderated gas and power prices as
second quarter, stronger-than-expected dry gas production, an they returned to normal levels. Prices, however, continued to be higher
increase in LNG facility maintenance and a continued storage surplus. than historical levels. Power prices averaged around A$90/MWh for
Temperatures in the first quarter averaged near three degrees warmer 2023 compared with A$190/MWh in 2022 and A$75/MWh in
than normal. Temperatures in the second quarter averaged one degree 2021. Gas prices averaged around A$12/GJ (gigajoule) for 2023
cooler than normal. Winter 2023-2024 has been considerably warmer compared with around A$40/GJ in 2022 and A$10/GJ in 2021.
than the 10-year normal. In 2023, natural gas dry production averaged There has also been increased intraday volatility, as more renewables
101.45 billion cubic feet a day (bcf/d) or 4.37 bcf/d above 2022. In and distributed solar have entered the system to replace coal.
the summer of 2023, natural gas storage in the 48 lower states of the
USA averaged 467 bcf higher than in the summer of 2022. Crude oil and natural gas price assumptions
Our ability to deliver competitive returns and pursue commercial
The market is expected to remain loose through the remainder of the opportunities depends on the accuracy of our price assumptions. We
2023-2024 winter as production slowly increases and LNG export use a rigorous assessment of short-, medium- and long-term market
facilities undergo maintenance. The bearish sentiment is expected to uncertainties to determine what ranges of future crude oil and natural
continue into the summer of 2024, which is reflected by the softness gas prices to use in project and portfolio evaluations. Market
of the prices seen in summer futures contracts on the New York uncertainties include, for example, future economic conditions,
Mercantile Exchange (NYMEX). geopolitics, actions by major resource holders, production costs,
technological progress and the balance of supply and demand.

See "Risk factors" on page 14 and Note 12 to the "Consolidated Financial Statements"
on pages 281-283.

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Refining and chemical margins Refining margins

In 2023, gross refining margins continued to be well-supported, albeit
at a lower level than the highs seen in 2022. The effect of sanctions on Global indicative refining margin [A]
Russian oil products meant that Europe was short of middle distillate,
leading to low stocks and very high middle distillate product crack $/bbl
spreads. This was exacerbated by refinery slowdowns during the hot 2023 2022 2021
European summer as cooling systems struggled to cope. In addition,
Indicative refining margin 12.45 18.03 4.79
there were low US gasoline stocks at the start of the US summer
holiday season when demand was rising as many more people were [A] The Indicative refining margin (IRM) is an approximation of Shell's global gross refining
driving. This led to a wider spread between gasoline and crude in the unit margin, calculated using price markers from third-party databases. It is based on a
simplified crude and product yield profile at a nominal level of refining performance. The
Atlantic basin. In the East, Chinese oil demand growth was capped by actual margins realised by Shell may vary due to factors including specific local market
the economic slowdown. The low product stocks of gasoline and diesel effects, refinery maintenance, crude diet optimisation as the crudes in the IRM are
indicative benchmark crudes, operating decisions and product demand. Gross refining
in the Atlantic basin required product flow from Asia providing margin unit margin is defined as the hydrocarbon margin net of purchased/sold utilities, additives
support for Asian refineries outside of China. But this was dampened by and relevant freight costs, divided by crude and feedstock intake in barrels. It is only
Chinese product export quotas which remained at the same elevated applicable to the impact of market pricing on refining business performance, excluding
trading margin.
level as in 2022. In 2023, new refinery capacity -- such as the Al Zour
refinery, the Beaumont expansion and Oman Duqm refinery -- came
Petrochemical margins
on line and increased product supply to the market, keeping margins at
a lower level than in 2022.
Global indicative chemical margin [A]
For 2024, further new refinery capacity, such as that from Dangote
$/tonne
in Nigeria, is expected to come on line. Meanwhile, demand growth
is expected to slow with China's economic outlook being a key factor. 2023 2022 2021
Currently, product stock levels in the Atlantic basin of mogas and Indicative chemical margin 132.63 48.04 216.44
diesel are at higher levels than a year ago, suggesting lower
[A] The Indicative chemical margin (ICM) is an approximation of Shell's global chemical
spreads between products and crude oil next year. margin performance trend (including equity-accounted associates), calculated using price
markers from third-party databases. It is based on a simplified feedstock and product yield
profile at a nominal level of plant performance. The actual margins realised by Shell may
Chemical cracker margins remained pressured in 2023 because vary due to factors including specific local market effects, chemical plants maintenance,
of global oversupply and weak demand. Slowing global market optimisation, operating decisions and product demand. Chemical unit margin is defined
conditions, and high inflation and interest rates, have impacted end- as the hydrocarbon margin net of purchased/sold utilities, additives and relevant freight
costs, divided by a nominal denominator expressed in metric tonnes. It is only applicable
consumer demand. New capacity growth, primarily in Asia and the to the impact of market pricing on Chemical business performance.
USA, led to global oversupply with producers continuing to match
demand through lower cracker utilisation. The Russia-Ukraine war The statements in this "Market overview" section are forward-looking
and conflicts in the Middle East have impacted energy prices, statements based on management's current expectations and certain
resulting in lower margins. material assumptions and, accordingly, involve risks and uncertainties
that could cause actual results, performance or events to differ
The outlook for petrochemical margins in 2024 and beyond depends materially from those expressed or implied herein.
on feedstock costs and the balance of supply and demand. Global
oversupply is expected to persist through the year with a slow demand
See "About this Report" on pages v-vi and "Risk factors" on page 14.
recovery. A recovery in demand is needed to absorb excess capacity.
The supply of petrochemicals will depend on how new facilities coming
on line and plant closures will impact net capacity, with utilisation
balancing the system. Product prices will reflect the cost of raw
materials, which is closely linked to crude oil and natural gas prices.

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Integrated
Gas
Integrated Gas (IG) includes liquefied natural
gas (LNG) and the conversion of natural gas
into gas-to-liquids (GTL) fuels and base oils. IG
activities also include natural gas exploration
and extraction, and the operation of the
upstream and midstream infrastructure
necessary to deliver gas and gas products
to market. The marketing, trading and
optimisation of LNG is also part of IG. We are
committed to investing in our IG activities and
plan to continue growing our LNG portfolio.

Segment earnings ($ billion)

7.0 2022: 22.2

Adjusted Earnings ($ billion)

13.9 2022: 16.1

Cash flow from operating activities ($ billion)

17.5 2022: 27.7

Production (thousand boe/d)

939 2022: 921

LNG liquefaction volumes (million tonnes)

28 2022: 30

LNG sales volumes (million tonnes)

67 2022: 66

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Key metrics

$ million, except where indicated

2023 2022 2021
Segment earnings*[A] [B] 7,046 22,212 8,060
Identified items (6,861) 6,075 (988)
Adjusted Earnings* [A] 13,907 16,137 9,048
Adjusted EBITDA* [A] 23,759 26,569 16,754
Cash flow from operating activities 17,520 27,692 13,210
Cash capital expenditure* 4,196 4,265 3,502
Liquids production available for sale (thousand b/d) 128 128 169
Natural gas production available for sale (million scf/d) 4,700 4,600 4,842
Total production available for sale (thousand boe/d) 939 921 1,004
LNG liquefaction volumes (million tonnes) 28.3 29.7 31.0
LNG sales volumes (million tonnes) 67.1 66.0 64.2

[A] Segment earnings, Adjusted Earnings, and Adjusted EBITDA are presented on a current cost of supplies basis.
[B] See Note 7 to the "Consolidated Financial Statements".

Business conditions Integrated gas data table

For the business conditions relevant to Integrated Gas,
see "Market overview" on pages 38-40. LNG liquefaction volumes

Production available for sale Million tonnes

In 2023, natural gas production increased by 2% compared 2023 2022 2021
with 2022, mainly because of the new fields and ramp-up in
Australia 13.3 13.2 13.1
Oman, Canada, Australia and Trinidad and Tobago. Lower levels
of maintenance at Pearl GTL in Qatar, and in Trinidad and Tobago Brunei 1.1 1.2 1.4
also contributed to the higher production levels. These were partly Egypt 0.3 0.5 0.3
offset by the derecognition of Russia's Sakhalin-related volumes Nigeria 3.3 3.6 4.3
and production-sharing contract effects in Egypt and at Pearl GTL.
Oman 2.7 2.8 2.5
In 2023 and 2022, natural gas and liquids made up 86% and 14%
of total production, respectively. Peru 0.8 0.8 0.6
Qatar 2.4 2.4 2.4
LNG liquefaction and sales volumes
Russia — 0.9 2.8
LNG liquefaction volumes decreased by 5% compared with the
previous year, mainly as a result of the derecognition of Sakhalin- Trinidad and Tobago 4.3 4.3 3.6
related volumes. Total 28.3 29.7 31.0

LNG sales volumes increased primarily because of higher purchases

Earnings 2023-2022
from third parties but this was partly offset by the derecognition of
Segment earnings in 2023 were lower in comparison to 2022 and
Sakhalin-related volumes.
reflected the net effect of lower realised prices and higher contributions
from trading and optimisation (decrease of $1,143 million), lower
Through our trading organisation, we market and sell a portion of
volumes (decrease of $466 million), and unfavourable deferred
our share of equity production of LNG together with third-party LNG
tax movements (decrease of $728 million).
through our hubs in the UK, the UAE and Singapore. Shell has term
sales contracts for the majority of our LNG liquefaction and term
Segment earnings included identified items: mainly unfavourable
purchase contracts. We are able to optimise the income we generate
movements of $4,407 million due to the fair value accounting of
from our LNG cargoes through our shipping network, regasification
commodity derivatives and net impairment charges and reversals
terminals and ability to purchase and deliver LNG spot cargoes from
of $2,247 million. In 2022, identified items included favourable
third parties. For example, if one customer does not need a scheduled
movements of $6,273 million due to the fair value accounting of
cargo, we can deliver it to another customer who does need it.
commodity derivatives and net impairment reversals of $779 million.
Similarly, if a customer needs an additional cargo not available from
In 2022, these were partly offset by other impacts of $608 million,
our production facilities, we contract with third parties to deliver the
mainly loan write-downs, as well as charges of $387 million as
additional cargo. We conduct paper trades, primarily to manage
provisions for onerous contracts.
commodity price risk related to sales and purchase contracts.
We also sell LNG for trucks in India, China and Europe, and
Adjusted Earnings and Adjusted EBITDA were driven by the same
LNG for shipping in the USA, Europe and Singapore.
factors as the segment earnings, and adjusted for identified items.
* Non-GAAP measure (see page 365).

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Prior year earnings summary Portfolio and business development

Our earnings summary for the financial year ended December 31, Significant portfolio and business developments:
2022, compared with the financial year ended December 31, 2021, ￮ In January 2023, we produced first gas from Oman's Mabrouk
can be found in the Annual Report and Accounts (page 39) and Form North-East field in Block 10 (Shell interest 53.45%).
20-F (page 43) for the year ended December 31, 2022, as filed with ￮ In June 2023, we completed the purchase of 25% of the
the Registrar of Companies for England and Wales and the US shareholding in the QatarEnergy LNG NFS(2) joint venture, which
Securities and Exchange Commission, respectively. owns a 37% interest in the North Field South (NFS) project. Shell's
ownership of NFS via its joint-venture shareholding is 9.375%.
Cash flow from operating activities ￮ In October 2023, we sold our 35% interest in Indonesia's Masela
Cash flow from operating activities for 2023 was primarily driven by PSC to Indonesia's PT Pertamina Hulu Energi and PETRONAS
Adjusted EBITDA and a working capital inflow of $2,023 million, partly Masela Sdn. Bhd. The sale included the Abadi gas project.
offset by net cash outflows, related to derivatives of $4,668 million, ￮ In October 2023, we and our partners in the Oman LNG LLC
and tax payments of $3,574 million. venture signed an amended shareholders' agreement for Oman LNG
LLC (Oman LNG), extending the business beyond 2024. We will
Cash capital expenditure remain the largest private shareholder in Oman LNG, with a 30%
Our cash capital expenditure in 2023 was at the same level as interest.
in 2022. Our cash capital expenditure is expected to be around ￮ In December 2023, Shell entered into agreements with the
$5 billion in 2024. government of the Republic of Trinidad and Tobago and Atlantic
LNG shareholders to restructure the Atlantic LNG facility, which will
change Shell's overall shareholding in Atlantic LNG. These changes
aim to take effect in a phased approach, starting on October 1,
2024, and are expected to be completed by May 2, 2027. On
completion, Shell is expected to have a 45% share in Atlantic LNG.

Business and property

Integrated Gas
A complete list of LNG and GTL plants in operation and under construction in which we have an interest is provided below.

LNG liquefaction plants in operation at December 31, 2023 [A]

100% capacity
Asset Location Shell interest (%) (mtpa) [B] Shell-operated
Asia
Brunei Brunei LNG Lumut 25 7.6 No
Oman Oman LNG Sur 30 7.1 No
Qalhat LNG [C] Sur 11 3.7 No
Qatar QatarEnergy LNG N(4) [D] Ras Laffan 30 7.8 No
Oceania
Australia Australia North West Shelf [D] Karratha 16.7 16.9 No
Gorgon LNG [D] Barrow Island 25 15.6 No
Prelude [D] Browse Basin 67.5 3.6 Yes
Queensland Curtis LNG T1 [D] Curtis Island 50 4.3 Yes
Queensland Curtis LNG T2 [D] Curtis Island 97.5 4.3 Yes
Africa
Egypt Egyptian LNG T1 Idku 35.5 3.6 No
Egyptian LNG T2 Idku 38 3.6 No
Nigeria Nigeria LNG Bonny 25.6 24.1 No
South America
Peru Peru LNG Pampa Melchorita 20 4.5 No
Trinidad and Tobago Atlantic LNG T1 Point Fortin 46 3 No
Atlantic LNG T2/T3 Point Fortin 57.5 6.6 No
Atlantic LNG T4 Point Fortin 51.1 5.2 No

[A] We have offtake rights via a lease to 100% of the capacity (2.5 mtpa) of the Kinder Morgan-operated Elba Island liquefaction plant in Georgia, USA.
[B] 100% capacity represents the total capacity that all trains can process as reported by the operator.
[C] The interest is held via an indirect shareholding through Oman LNG.
[D] These assets are clustered as integrated assets and have onshore or offshore upstream production.

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LNG liquefaction plants under construction at December 31, 2023

100% capacity
Asset Location Shell interest (%) (mtpa) [A] Shell-operated
Africa
Nigeria Train 7 [B] Bonny 25.6 7.6 No
North America
Canada LNG Canada T1-2 [C] Kitimat 40.0 14.0 No
Asia
Qatar QatarEnergy LNG NFE(2) [D] Ras Laffan 25.0 8.0 No
QatarEnergy LNG NFS(2) [E] Ras Laffan 25.0 6.0 No

[A] 100% capacity represents the total capacity that all trains are expected to process as reported by the operator.
[B] First LNG is expected later in the 2020s.
[C] Construction started in October 2018 and first LNG is expected around the middle of the 2020s.
[D] Shell holds 25% in the joint venture, which owns 25% of the North Field East expansion project, which has a nameplate capacity of 32 mtpa. First LNG is expected later in the 2020s.
[E] Shell holds 25% in the joint venture, which owns 37.5% of the North Field South expansion project, which has a nameplate capacity of 16 mtpa. First LNG is expected later in the 2020s.

GTL plants in operation at December 31, 2023

100% capacity
Asset Location Shell interest (%) (b/d) [A] Shell-operated
Asia
Malaysia Shell MDS Bintulu 72.0 14,700 Yes
Qatar Pearl Ras Laffan 100.0 140,000 Yes

[A] 100% capacity represents the total capacity of the plant.

In 2023, we also had interests and rights in the regasification terminals listed below. Extension of leases or rights beyond the periods mentioned
below will be reviewed on a case-by-case basis.

LNG regasification terminals

Shell capacity Capacity rights Shell interest (%)

Project name Location rights (mtpa) period and rights
Costa Azul Baja California, Mexico 2.7 2008–2028 Capacity rights
Cove Point [A] Lusby, MD, USA 1.8 2003–2023 Capacity rights
Dragon LNG Milford Haven, UK 3.1 2009–2029 50
Eemshaven Groningen, the Netherlands 3.1 2022–2027 Capacity rights
Elba Island Elba Island, GA, USA 4.6 2003–2027 Leased
Elba Island Elba Island, GA, USA 2.8 2006–2036 Leased
Elba Island Expansion Elba Island, GA, USA 4.2 2010–2035 Leased
GATE (Gas Access to Europe) Rotterdam, the Netherlands 1.5 2015–2031 Capacity rights
Lake Charles Lake Charles, LA, USA 4.4 2002–2030 Leased
Lake Charles Expansion Lake Charles, LA, USA 8.7 2005–2030 Leased
Singapore SGM SLNG, Singapore [B] 2013–2029 Import rights
Singapore SETL SLNG, Singapore [B] 2018–2035 Import rights
Singapore SETL SLNG, Singapore up to 1.0 [C] 2021–2025 Import rights
Shell Energy India Pvt Ltd (formerly Hazira) Gujarat, India 5 2005–2035 100
Shell LNG Gibraltar Gibraltar up to 0.04 2018–2038 51

[A] Contract expired in August 2023 and was not extended.

[B] Licences to import LNG and sell regasified LNG in Singapore with no volume cap.
[C] Exclusive licence to import LNG and sell regasified LNG in Singapore for up to 1.0 mtpa.

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First gas from Block 10 in heartland of Oman

We produced first gas from Oman's Mabrouk North-East field and contractors at Block 10. We are building a 590-bed
in Block 10 (Shell interest 53.45%) in 2023. Block 10 is our first accommodation unit with catering, sports facilities and WiFi
operated venture in the country, a market that is core to our access for our staff and contractors in the field.
integrated gas and upstream strategy.
We have also implemented a comprehensive road safety
Phase 1 of Block 10 was developed in close cooperation with programme at Block 10. The programme is not limited to Shell
Petroleum Development Oman (PDO), which is a joint venture operations but has already supported changes to road safety
operated by the government of Oman (60%), Shell (34%), regulations in Oman. Shell, together with the Royal Oman Police
TotalEnergies (4%) and Partex (2%). and the Ministry of Education, has also set up a road safety
educational programme and curriculum for children in Oman.
Production from Block 10 started in January 2023 and is expected
to reach 0.5 billion standard cubic feet of gas per day by the Shell has been present in Oman for more than 80 years. As part
middle of 2024. The gas is supplied to Oman's gas network, which of our own net-zero targets and the ambitions of Oman, we are
feeds local industries and export facilities, such as Oman LNG. evaluating a potential hydrogen project, which could be supplied
by gas from Block 10. There is potential for the produced CO2
When Shell became operator of Block 10 in March 2022, to be stored underground and supplied to manufacture low-
we sought to provide quality accommodation for employees carbon products.

Photo: Block 10 facility in Mabrouk North-East field, Oman.

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Oil and natural gas production, exploration and development Qatar

Australia We operate the Pearl GTL plant (Shell interest 100%) in Qatar under
We operate the Queensland Curtis LNG (QCLNG) venture's natural a development and production-sharing contract with the government.
gas operations in Queensland's Surat Basin. Our interests range from The fully integrated facility has the capacity to produce, process and
44% to 74% in 25 field compression stations and six central processing transport 1.6 billion standard cubic feet per day (scf/d) of gas from
plants. Our production of natural gas from the onshore Surat Basin Qatar's North Field.
supplies the QCLNG liquefaction plant and the domestic gas market.
We have a 30% interest in QatarEnergy LNG N(4), which comprises
We have a 50% interest in Arrow, a Queensland-based joint venture integrated facilities to produce around 1.4 billion scf/d of gas from
with China National Petroleum Corporation (CNPC). Arrow owns Qatar's North Field, an onshore gas-processing facility operated by
coalbed methane assets and a domestic power business. QatarEnergy LNG. We also have 25% of the shareholding in the
QatarEnergy LNG NFE(2) joint venture which owns a 25% interest in
In addition, Shell has interests in offshore production, LNG liquefaction the North Field East (NFE) project. Thus, Shell's ownership of NFE via
and exploration licences in the Browse Basin and in the North West its joint-venture shareholding is 6.25%. In June 2023, we purchased
Shelf (NWS) and Greater Gorgon areas of the Carnarvon Basin. 25% of the shareholding in the QatarEnergy LNG NFS(2) joint venture
Woodside is the operator on behalf of the NWS joint venture (Shell which owns a 37% interest in the North Field South (NFS) project.
interest 16.7%). We have a 25% interest in the Chevron-operated Shell's ownership of NFS via its joint-venture shareholding is 9.375%.
Gorgon LNG joint venture that includes offshore production.
Russia
In the Browse Basin, Shell operates the Prelude field (Shell interest In the first quarter of 2022, Shell announced its intent to withdraw
67.5%), the Crux gas and condensate development field (Shell interest in a phased manner from its involvements in all Russian hydrocarbons,
84.5%) and other backfill projects for Prelude FLNG. including crude oil, petroleum products, gas and LNG. Note 6 to the
Consolidated Financial Statements for the year ended December 31,
In 2023, we sold our stake in the Browse joint arrangement (Shell 2022, presented in the "Annual Report and Accounts and Form 20-F"
interest 27%), which covers the Brecknock, Calliance and Torosa for that year, sets out Shell's progress made with respect to such
gas fields. intention, including its exit from the Sakhalin-2 project. Shell still holds
a 27.5% (minus one share) interest in Sakhalin Energy Investment
Bolivia Company Ltd. (SEIC), a Bermudan entity, which purportedly no longer
We hold a 37.5% interest in the Caipipendi block where we produce holds any licences, rights and obligations in Sakhalin-2. The accounting
and deliver natural gas to domestic and export markets. Repsol is the treatment of SEIC is stated and explained in Note 14 "Investments in
operator. We also have a 25% interest in the Tarija XX West block, securities" to the Consolidated Financial Statements on page 285. In
where we produce from the Itaú field. February 2023, Shell noted that SEIC had renounced a long-term LNG
purchase contract by failing to perform, meaning the contract stood
Canada terminated. Shell still holds one long-term LNG purchase contract with
In Canada, we produce and market natural gas, natural gas liquids a Novatek entity.
and condensate. We hold mineral acres, primarily in the Montney
play in British Columbia and Alberta. We operate four natural gas Trinidad and Tobago
processing area facilities at our Groundbirch asset in British Columbia, We have interests in three concessions with producing fields: Central
with another natural gas processing facility under construction. Block (Shell interest 65%), North Coast Marine Area (Shell interest
80.5%) and East Coast Marine Area (Shell interest 100%).
China
We develop and produce from the onshore Changbei tight-gas We have a 100% interest in exploration blocks 5(c)REA, 5(d) and 6(d).
field under a PSC with China National Petroleum Company. In 2023, we signed PSCs for three new exploration blocks 25a, 25b
and 27 in the Columbus Basin (Shell interest 50%). We operate Block
Egypt 27 and BP is the operator of the remaining two. Additionally, we
We have a 25% interest in the Burullus Gas Company (Burullus) joint relinquished our 35% interest in the PSC for Atlantic Area Block 5.
venture, which operates the West Delta Deep Marine concession
(Shell interest 50%) and supplies gas to the domestic market and an Other
Egyptian LNG plant. We have a 50% interest in the Rashid Petroleum We also have interests in Barbados, Colombia, Cyprus and Tanzania.
Company (Rashpetco) joint venture, which operates the Rosetta
concession (Shell interest 100%). We have a 30% interest in the In 2023, we sold our interest (35%) in the Masela PSC in Indonesia,
El Burg Offshore Company (EBOC) joint venture, which operates which includes the Abadi gas project.
the El Burg offshore concession (Shell interest 60%).

We have interests in several exploration concessions in the Nile Delta,

the wider East Mediterranean and the Red Sea.

Oman
We have an operated concession to develop and produce natural
gas and condensate from Block 10 (Shell interest 53.45%). We have a
separate gas sales agreement and oil supply agreement for production
from the block. We also have an exploration and production-sharing
agreement with the government for the exploration and appraisal of
natural gas and condensate in Block 11 (Shell interest 67.5%),
operated by Shell.

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Generating shareholder value

Upstream
Upstream explores for and extracts crude
oil, natural gas and natural gas liquids. It
also markets and transports oil and gas,
and operates the infrastructure necessary
to deliver them to the market. Shell's Upstream
business delivers reliable energy from
conventional and deep-water oil and
gas operations. We are committed to our
Upstream activities and plan to maintain our
liquids production to the end of the decade.

Segment earnings ($ billion)

8.5 2022: 16.2

Adjusted Earnings ($ billion)

9.8 2022: 17.3

Cash flow from operating activities ($ billion)

21.5 2022: 29.6

Production (thousand boe/d)

1,800 2022: 1,897

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Key metrics

$ million, except where indicated

2023 2022 2021
Segment earnings*[A] [B] 8,528 16,222 9,603
Identified items (1,267) (1,096) 1,587
Adjusted Earnings* [A] 9,794 17,319 8,015
Adjusted EBITDA* [A] 30,607 42,100 27,170
Cash flow from operating activities 21,450 29,641 21,562
Cash capital expenditure* 8,343 8,143 6,168
Liquids production available for sale (thousand b/d) 1,325 1,333 1,515
Natural gas production available for sale (million scf/d) 2,754 3,272 3,845
Total production available for sale (thousand boe/d) 1,800 1,897 2,178

[A] Segment earnings, Adjusted Earnings, and Adjusted EBITDA are presented on a current cost of supplies basis.
[B] See Note 7 to the "Consolidated Financial Statements".

Business conditions Cash capital expenditure

For the business conditions relevant to Upstream, see "Market Cash capital expenditure in 2023 was higher, compared with 2022.
overview" on pages 38-40. The increase was mainly a result of the ramp-up of projects in the Gulf
of Mexico, Malaysia and the UK. This was partially offset by the Brazil
Production available for sale Atapu Transfer of Rights in 2022. Cash capital expenditure is expected
In 2023, liquids production was flat and natural gas production to be around $8 billion in 2024.
decreased by 16%, compared with 2022.
Portfolio and business developments
Total production, compared with 2022, decreased mainly due to the Significant portfolio and business developments:
impact of divestments. The impact of field decline was more than offset ￮ In February 2023, we started production at our operated Vito
by growth from new fields. floating production facility (Shell interest 63.1%) in the Gulf of
Mexico.
Earnings 2023-2022 ￮ In February 2023, we completed the sale of our 50% interest in the
Segment earnings, compared with 2022, mainly reflected lower CJSC Khanty-Mansiysk Petroleum Alliance in Russia to a subsidiary
realised oil and gas prices (decrease of $5,696 million) and lower of GazpromNeft (GPN). In March 2023, we completed the sale of
volumes (decrease of $2,001 million). our 50% interest in Salym Petroleum Development LLC to a
subsidiary of GPN.
Segment earnings in 2023 also included net impairment charges ￮ In February 2023, we sold our 100% interest in Shell Onshore
and reversals of $642 million, and net charges of $295 million, Ventures LLC in the USA which held a 51.8% membership interest in
which related to the impact of the weakening Argentine peso and Aera Energy LLC, to IKAV.
strengthening Brazilian real on a deferred tax position. These ￮ In March 2023, we divested our 50% interest in the offshore Block
charges and gains are part of identified items and compare with SK307 PSC in Malaysia, and our 40% interest in the offshore Baram
2022, where segment earnings included net impairment reversals Delta Operations (BDO) PSC to Petroleum Sarawak Exploration &
and charges of $853 million, and charges of $1,385 million relating Production Sdn. Bhd.
to the EU solidarity contribution and $802 million relating to the UK ￮ In April 2023, we completed the restart of operations at the
Energy Profits Levy. operated Pierce field (Shell interest 92.5%) in the UK Central North
Sea following a significant upgrade. Pierce is a joint arrangement
Adjusted Earnings and Adjusted EBITDA were driven by the same between Shell and Ithaca Energy (UK) Limited (interest 7.48%).
factors as the segment earnings and adjusted for identified items. ￮ In August 2023, we started production at the Timi platform in
Malaysia. Timi is developed as part of the SK318 PSC. Our
Prior year earnings summary subsidiary, Sarawak Shell Berhad (SSB), is the operator holding 75%
Our earnings summary for the financial year ended December 31, equity. The other two partners are PETRONAS Carigali Sdn Bhd
2022, compared with the financial year ended December 31, 2021, (15%) and Brunei Energy Exploration (10%).
can be found in the Annual Report and Accounts (page 45) and Form ￮ In December 2023, we took FID on the Sparta project (Shell interest
20-F (page 49) for the year ended December 31, 2022, as filed with 51%) in the Gulf of Mexico. This will be a Shell-operated production
the Registrar of Companies for England and Wales and the US hub developed with Equinor Gulf of Mexico LLC (49%).
Securities and Exchange Commission, respectively. ￮ In December 2023, the Sepetiba FPSO production started in the
Mero field.
Cash flow from operating activities ￮ In January 2024, we reached an agreement to sell The Shell
Cash flow from operating activities for 2023 was primarily driven by Petroleum Development Company of Nigeria Limited (SPDC) to
Adjusted EBITDA, partly offset by tax payments of $8,470 million. Renaissance. Completion of the transaction is subject to approvals
by the Federal Government of Nigeria and other conditions.
* Non-GAAP measure (see page 365).

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Business and property Italy

Our subsidiaries, joint ventures and associates are involved in all Shell has a 39% interest in the Val d'Agri producing concession,
aspects of upstream activities. These activities include land tenure and operated by ENI S.p.A., and a 25% interest in the Tempa Rossa
the exploration, development and production of crude oil, natural gas producing concession, operated by TotalEnergies EP Italia S.p.A.
and natural gas liquids. They also include the marketing and
transportation of oil and gas, as well as the operation of the Netherlands
infrastructure necessary to deliver them to market. Shell and ExxonMobil are 50:50 shareholders in Nederlandse
Aardolie Maatschappij B.V. (NAM). NAM holds a 60% interest in the
The conditions of the leases, licences and contracts under which oil and onshore low-calorific Groningen gas field (the remaining 40% interest
gas interests are held vary from country to country. is held by EBN, a Dutch government entity), the Schoonebeek oil
field, some 25 smaller hydrocarbon production licences and two
In almost all cases outside North America, legal agreements are underground gas storage facilities.
generally granted by, or entered into with, a government, state-owned
company, government-run oil and gas company or agency. The The Dutch government issues annual gas production instructions for the
exploration risk usually rests with the independent oil and gas Groningen field. As per the latest instruction, production has ceased
company. In North America, these agreements may also be with since October 1, 2023. However, the Dutch government has indicated
private parties that own mineral rights. to NAM it could decree a restart of minimal production in exceptional
circumstances during the current gas year, which occurred on January
Of these agreements, the following are most relevant to our interests: 8-10, 2024, for a cold spell of several days.
￮ Licences (or concessions), which entitle the holder to explore for
hydrocarbons and exploit any commercial discoveries. Under a Historical production from the Groningen field induces earthquakes
licence, the holder bears the risk of exploration, development and which have led to damage claims, security concerns, and a strengthening
production activities, and is responsible for financing these activities. operation to make buildings earthquake resistant. In June 2018, NAM's
In principle, the licence holder is entitled to the totality of production shareholders and the Dutch government signed a Heads of Agreement
less any royalties in kind. The government, state-owned company or (HoA) to inter alia reduce, and eventually cease production from the
government-run oil and gas company may sometimes enter into a Groningen field. Under the terms of the HoA, it was agreed that the
joint arrangement as a participant, sharing the rights and obligations Dutch government would pass on to NAM costs insofar as the costs
of the licence but usually without sharing the exploration risk. In a corresponded to NAM's liability. Further agreements were signed to
few cases, the state-owned company, government-run oil and gas implement the HoA. As part of these agreements, Shell guaranteed half
company or agency has an option to purchase a certain share of of NAM's 60% share of earthquake-related costs for damage claims and
production. the strengthening of buildings. We are currently in discussions with the
￮ Lease agreements, which are typically used in North America and Dutch government about appropriate financial securities for the longer
are usually governed by terms similar to licences. Participants may term as agreed under the HoA.
include governments or private entities. Royalties are paid either in
cash or in kind. NAM is working with the Dutch government and other stakeholders to
￮ Production-sharing contracts (PSCs) entered into with a government, fulfil its obligations to residents of the area. These include compensating
state-owned company or government-run oil and gas company. PSCs for damage caused by the earthquakes and paying to strengthen
generally oblige the independent oil and gas company, as houses where this is required for safety. In 2022, NAM started
contractor, to provide all the financing and bear the risk of arbitrations with the Dutch government to have its financial liability
exploration, development and production activities in exchange for determined for costs which the Dutch government compensated to
a share of the production. Usually, this share consists of a fixed or claimants and subsequently charged to NAM.
variable part that is reserved for the recovery of the contractor's cost
(cost oil). The remaining production is split with the government, In October 2021, NAM announced that it would split up its non-
state-owned company or government-run oil and gas company on a Groningen assets into several new legal entities, with the intent to
fixed or volume/revenue-dependent basis. In some cases, the divest those legal entities. No split-up has occurred to date.
government, state-owned company or government-run oil and gas
company will participate in the rights and obligations of the See "NAM (Groningen gas field) Litigation" on page 313.
contractor and will share in the costs of development and
production. Such participation can be across the venture or on a
field-by-field basis. Additionally, as the price of oil or gas increases Norway
above certain predetermined levels, the independent oil and gas Shell is a partner in 19 production licences on the Norwegian
company's entitlement share of production normally decreases, and continental shelf, and the operator of seven of these. We have
vice versa. Accordingly, its interest in a project may not be the same interests in two producing gas fields: Shell-operated Ormen Lange
as its entitlement. (Shell interest 17.8%) and Equinor-operated Troll (Shell interest 8.1%).
Additionally, we hold an interest in the Equinor-operated Irpa (Shell
Europe interest 10%) gas discovery under development. We operate two
Germany fields which are being decommissioned, Knarr and Gaupe. We are
Shell is a 50% shareholder in BEB Erdgas und Erdoel GmbH & Co. also the technical service provider for the Nyhamna processing plant,
KG (BEB), which owns interests in various concessions, mainly in operated by Gassco.
Lower Saxony. ExxonMobil Production Deutschland GmbH has a
service contract with BEB, under which it provides operating services
to BEB for most of the concessions.

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UK We have a non-operated interest under a PSC in a gas-holding area

Shell operates a number of assets on the UK continental shelf mostly for deep-water Block CA2, which is operated by Petronas. Shell's
under unincorporated joint-venture agreements. Shell also has non- interest increased in 2023 from 12.5% to 20% when we acquired
operated positions in the West of Shetland area, including Clair (Shell 7.5% from Petronas.
interest 27.97%) and Schiehallion (Shell interest 44.89%). Both Clair
and Schiehallion are operated by BP. We operate the deep-water Block CA1 (Shell interest 86.95%), in
which the Jagus East field is located, under a PSC. As referred to in the
In April 2023, Shell restarted operations at the Pierce field (Shell Malaysia section, the Jagus East field and the Geronggong field, held
interest 92.5%) in the UK North Sea after a major redevelopment to by BSP, form part of the unitised GKGJE field. In 2023, we relinquished
enable gas production, after years of the field producing only oil. The the exploration acreage that formed part of Block CA1.
Haewene Brim floating production, storage and offloading (FPSO)
vessel, which produces from the Pierce field, is currently shutdown to Iraq
address an integrity threat to the mooring lines. The work is nearing Shell has a 44% interest in the Basrah Gas Company, which gathers,
completion with production expected to resume in the near future. treats and processes associated gas that was previously flared from the
Rumaila, West Qurna 1 and Zubair fields. Processed gas and
Progress continues to develop the operated Penguins FPSO vessel associated products, such as condensate and LPG, are sold to the
(Shell interest 50%) and the Jackdaw platform (Shell interest 100%) domestic market. Any surplus condensate and LPG is exported.
in the North Sea. Both are expected to become operational in the
mid-2020s. Kazakhstan
Shell is the joint operator with ENI S.p.A. of the onshore Karachaganak
In November 2023, we completed the sale of our 30% stake in oil and condensate field (Shell interest 29.3%) and, in north-west
the Cambo field to Ithaca Energy, following regulatory approval. Kazakhstan which covers more than 280 square kilometres.
The agreement to sell was signed in September 2023.
We also have an interest in the North Caspian Sea PSA (Shell interest
During the third quarter of 2023, the UK government announced that the 16.8%) which includes the Kashagan field in the Kazakh sector of the
Acorn carbon capture, utilisation and storage project (Shell interest 30%) Caspian Sea. The North Caspian Operating Company is the operator.
was selected as one of two clusters to enter "Track 2" of the UK's cluster This shallow-water field covers around 3,400 square kilometres.
sequencing process for carbon capture and storage (CCS). In 2024, we
expect to start more detailed discussions on the project between the UK We have a 7.4% interest in the Caspian Pipeline Consortium (CPC),
government and the Acorn co-venturers. It was also announced that which owns and operates an oil pipeline running from the Caspian
Acorn had received CCS licences from the North Sea Transition Authority Sea to the Black Sea across parts of Kazakhstan and Russia. We hold
for the Acorn East and East Mey CO2 stores, expanding its transport and our interest in the CPC via three legal entities. Two of these are wholly
storage system's capacity deep beneath the North Sea. In addition, owned by Shell and the other is a joint venture with Rosneft, Rosneft-
ventures in which Shell has a 50% interest were awarded three carbon Shell Caspian Ventures Ltd (Cyprus) (RSCV) (Shell interest 49%),
storage appraisal licences. which was formed in 1996 to own and manage pipeline capacity
rights. We continue to manage our interest in CPC held through RSCV
Decommissioning of the Heather A platform and Curlew FPSO asset in full compliance with applicable laws, including sanctions.
continued in 2023, and we began a campaign of subsea well plug
and abandonment activity to decommission 25 wells in the Central Kuwait
North Sea. All remaining staff left Brent Charlie on October 6, 2023, The wholly owned Shell Kuwait Exploration and Production B.V.
bringing 47 years of continuous presence on Brent installations to an holds three Enhanced Technical Service Agreements with Kuwait
end. We expect the topside to be lifted in 2024. The Offshore Oil Company. These contracts run up to 2026 for Jurassic Gas and
Petroleum Regulator for Environment and Decommissioning (OPRED) 2027 for Conventional Oil and Heavy Oil.
continues to assess the Brent Field decommissioning programme for
the Brent gravity-based substructures. Malaysia
Shell explores for and produces oil and gas off the coast of Sabah
Rest of Europe and Sarawak under 19 PSCs, in which our interests range from 21%
Shell also has interests in Albania. to 92.5%.

Asia (including the Middle East and Russia) Offshore Sabah

Brunei We operate two producing oil fields: the Malikai deep-water field
Shell and the Brunei government are 50:50 shareholders in Brunei (Shell interest 35%) in the Block G PSC, and the unitised Gumusut-
Shell Petroleum Company Sendirian Berhad (BSP). BSP has long-term Kakap Geronggong-Jagus East (GKGJE) field which straddles the
onshore and offshore oil and gas concession rights and sells most of its Malaysia-Brunei border (Shell interest 37.89%).
gas production to Brunei LNG Sendirian Berhad, with the remainder
sold in the domestic market. We hold a 50% participating interest in exploration phase Block 2W,
SB-X PSC and ND6/7 PSCs. The exploration activities in Block ND6/7
In addition to our interest in BSP, we have a non-operated interest in PSC have been suspended because of Malaysia's border disputes with
the offshore Block B concession (Shell interest 35%) which is operated Indonesia.
by TotalEnergies. The gas and condensate are produced from the
Maharaja Lela field. We have non-operated interests of 21% in the unitised Siakap North-
Petai deep-water field in Block G and 30% in the Kebabangan
Cluster PSC.

In our non-operated portfolio, we hold exploration interests ranging

from 25.1% to 40% in the Block SB 2K, N and SB2V PSCs.

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Offshore Sarawak
We are the operator of eight producing gas fields and one producing
oil and gas field holding interests ranging from 30% to 50%. Nearly
all the gas produced offshore Sarawak is supplied to Malaysia LNG
(MLNG) and to our gas-to-liquids plant in Bintulu. The fields are under
the MLNG, SK308, SK408 and SK308 PSCs.

We are also the operator for the Block SK318 PSC. This block contains
the Timi field (Shell interest 75%), and the Rosmari-Marjoram fields
(Shell interest 80%). Rosmari is unitised between the Block SK318 PSC
and Block SK316 PSC (no Shell interest) with the resulting Shell interest
at 68%. Rosmari-Marjoram is a natural gas project situated around
220 kilometres off the coast of Bintulu, comprising a remotely operated
offshore platform and onshore gas plant. Rosmari-Marjoram will mainly
be powered by renewable energy from solar power offshore and
hydroelectric power onshore. Timi achieved first gas in August 2023
and the gas is moved through an 80-kilometre pipeline to the F23 Timi platform, powered by sun
production hub. and wind, achieves first gas
We hold participating interests ranging from 70% to 92.5% in the Our unmanned solar- and wind-powered platform in the Timi gas
exploration phase Block SK312, SK437, SK439 and SK440 PSCs. In field (Shell interest 75%) shows how we are working to produce
March 2023, we signed one new PSC for Block SK3B (Shell interest energy with less emissions. Timi delivered first gas in August
45%), a deep-water block, off the coast of Sarawak. 2023 and is expected to produce up to 50,000 barrels of oil
equivalent per day at peak production.
In our non-operated portfolio, we hold a 20% interest in the Pegaga
field under the Block SK320 PSC and a 30% interest in the Jerun field The Timi field is situated about 200 kilometres (km) off the
which is part of the Block SK408 PSC. Jerun is a gas development with coast of Sarawak, Malaysia, and is part of our operated SK318
an integrated central processing platform. The Block SK408 PSC also production-sharing contract. Timi features Shell's first wellhead
contains the producing non-operated Larak and Bakong fields. platform in Malaysia that is powered by a solar and wind hybrid
power system. The design demonstrates our Upstream business's
In March 2023, we divested our 50% interest in the offshore Block ability to deliver projects that support a balanced energy
SK307 PSC and our 40% interest in the offshore Baram Delta transition. In addition to delivering value for shareholders with
Operations (BDO) PSC to Petroleum Sarawak Exploration & less emissions, Timi is also more cost efficient to operate because
Production Sdn. Bhd. it is around 60% lighter in weight than a conventional drilling
wellhead platform that relies on oil and gas for power.

The field qualifies as a critical habitat because it lies within the

Luconia Shoals National Park where migratory mammals, turtles
and coral reefs are found. The project therefore required a
biodiversity action plan designed with conservation initiatives in
collaboration with the local university.

Timi is not the only Shell asset in Malaysia powered by

renewable energy. In May 2020, we produced first gas from
a fully solar-powered platform in the Gorek field, about 145 km
offshore Malaysia. In 2022, we took the final investment
decision on the Rosmari-Marjoram gas project, the largest
integrated offshore and onshore project in Sarawak, which
will be primarily powered by renewable energy.

Shell retains a strong presence in Malaysia's upstream, gas-to-

liquids, downstream and business services sectors. We remain
committed to supporting the country's economic progress and
energy transition efforts through competitive and resilient
investments.

Photo: Aerial photograph of the Timi platform in Malaysia before operations started.

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Oman Onshore
Shell has a 34% interest in Petroleum Development Oman (PDO), The Shell Petroleum Development Company of Nigeria Limited (SPDC)
which operates the Block 6 oil concession. Shell is entitled to 34% of is the operator of the SPDC joint venture (SPDC JV, Shell interest 30%)
oil produced from Block 6 through its interest in Private Oil Holdings which has 15 Niger Delta onshore oil mining leases (OMLs).
Oman Ltd. The government of Oman has a 60% interest in PDO and
the Block 6 oil concession through its wholly owned company, Energy SPDC also has three shallow-water oil mining leases (OML 74, 77 and
Development Oman (EDO). PDO operates a concession area of about 79) and a 40% interest in the non-operated Sunlink joint venture, which
90,000 square kilometres and has more than 200 producing oil fields. has one shallow-water lease (OML 144).

We have a 50% interest in Block 42 under an Exploration and On January 16, 2024, Shell agreed to sell SPDC to Renaissance,
Production Sharing Agreement (EPSA) where Shell is the operator. The subject to approvals by the Federal Government of Nigeria and other
other 50% interest is held by the government through its wholly owned conditions. As part of the transaction, parties have agreed a sharing
company, OQ. We have a 100% interest in Block 55 under an EPSA. mechanism that, upon completion, will give Shell an interest in the
performance of the export feedgas business going forward. Shell will
Russia retain its interest in one shallow-water lease (OML 144).
In the first quarter of 2022, Shell announced its intent to withdraw in
a phased manner from its involvement in all Russian hydrocarbons, Offshore
including crude oil, petroleum products, gas and LNG. In connection Our main offshore deep-water activities are carried out by our wholly
with this: owned subsidiary Shell Nigeria Exploration and Production Company
￮ On February 22, 2023, Shell completed the sale of its 50% interest Limited (SNEPCo). SNEPCo has interests in three deep-water blocks
in the CJSC Khanty-Mansiysk Petroleum Alliance to a subsidiary of that are under PSC terms: the producing assets Bonga (OML 118) and
GazpromNeft (GPN); and Erha (OML 133), and the non-producing asset Bolia Chota (OML 135).
￮ On March 3, 2023, Shell completed the sale of its 50% interest in SNEPCo operates OML 118 (Shell interest 55%), including the Bonga
Salym Petroleum Development LLC to a subsidiary of GPN. Salym field FPSO vessel. We also operate OML 135, encompassing the Bolia
Petroleum Development N.V. (SPD), a joint operation with GPN and Doro fields (Shell interest 55%). We have a 43.8% non-operated
which was formerly developing the Salym project and in which Shell interest in OML 133 (including the Erha FPSO).
previously had a 50% interest, was liquidated in December 2023,
and its wholly owned subsidiary Salym Petroleum Services B.V. was Authorities have investigated our involvement in the 2011 settlement of
liquidated in November 2023. litigation pertaining to OPL 245.

Syria See Note 31 to the "Consolidated Financial Statements" on pages 312-314.

Shell holds a 65% interest in Syria Shell Petroleum Development B.V.
(SSPD), a joint venture between Shell and the China National
Petroleum Corporation. SSPD holds a 31.25% interest in Al Furat Business update
Petroleum Company, a Syrian joint stock company, whose role was to In 2021, the Petroleum Industry Act (PIA) entered into effect, creating a
perform petroleum operations. Shell also holds a 70% interest in two new regulatory framework for the petroleum industry in Nigeria. The
exploration licences via Shell South Syria Exploration B.V. In December PIA introduces significant changes and we are actively engaged in the
2011, in compliance with international sanctions on Syria, including implementation process to ensure that these changes are implemented
European Council Decision 2011/782/CFSP, Shell suspended all in a timely manner in our operations.
exploration and production activities in Syria. SSPD continued to fulfil
minimum contractual obligations towards the Syrian finance and labour Security issues, sabotage and crude oil theft in the Niger Delta
ministries, in compliance with applicable trade control laws. In 2023, continued and remained significant challenges to our onshore
as part of the minimum contractual obligations, payments for taxes operations in 2023. We will continue to monitor the situation closely
related to salary and social security amounted to $1,350. and evaluate implications for the integrity of our infrastructure and the
sustainability of our current operations. We continue to put the safety
Rest of Middle East and Asia of our employees and contractors first.
Shell also has interests in the United Arab Emirates.
In our Nigerian operations, we face various risks and adverse
Africa conditions which could have a significant adverse effect on our
Nigeria operational performance, earnings, cash flows and financial condition.
Shell operates a number of interests in onshore and offshore oil
exploration and production assets in Nigeria.
See "Respecting nature" on pages 116-123.

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There are limitations to the extent to which we can mitigate these risks. We are the operator of nine production hubs: Mars (Shell interests
We monitor the security situation, and liaise with host communities, 33.7% to 100%), Olympus (Shell interests 71.5% to 100%), Auger
governmental and non-governmental organisations to help promote (Shell interests 27.5% to 100%), Perdido (Shell interests 33.3% to
peaceful and safe operations for our people and local communities. 40%), Ursa (Shell interests 45.4% to 100%), Enchilada/Salsa (Shell
We test the economic and operational resilience of our Nigerian interests 37.5% to 75%), Appomattox (Shell interest 79%), Vito (Shell
projects against a wide range of assumptions and scenarios. We seek interest 63.1%), and Stones (Shell interest 100%). We also have an
to proportionally share risks and funding commitments with joint-venture interest in the West Delta 143 offshore processing facilities (Shell
partners. When we participate in joint ventures in Nigeria, we require interest 71.5%).
that they operate in accordance with good industry practice. Upon
completion of the announced sale (subject to regulatory approvals and We continue to produce from the Coulomb field (Shell interest 100%)
other conditions) of our onshore Nigeria business, our exposure to which ties into the Na Kika platform (Shell interest 50%) co-owned and
these risks are expected to reduce. Shell has other businesses in operated by BP Exploration and Production Inc.
Nigeria that are outside the scope of the announced transaction.
We continued exploration, development and decommissioning
See "Risk factors" on page 19.
activities in the Gulf of Mexico in 2023.

In February 2023, we began production at Vito (Shell interest 63.1%),

We support the Nigerian government's efforts to improve the efficiency, a Shell-operated production hub located approximately 10 miles (16
functionality and domestic benefits of Nigeria's oil and gas industry. kilometres) south of the Shell-operated Mars hub. Vito is expected to
We report spills and how we respond to spills, including those that are produce up to 100,000 boe/d.
caused by third-party interference. We implement a maintenance
strategy to support sustainable equipment reliability and we have a In March 2023, we announced our FID for Dover (Shell interest 100%),
multi-year programme to reduce routine flaring of associated gas. a planned subsea tieback to the Shell-operated Appomattox (Shell
interest 79%) production hub. Dover is expected to start production in
See "Our Journey to net zero" on page 104.
late 2024/early 2025 and produce up to 21,000 boe/d.

In December 2023, FID was taken on the Sparta development (Shell

Rest of Africa interest 51%). This will be a Shell-operated production hub, which
Shell also has interests in Algeria, Mauritania, Namibia, São Tomé straddles four blocks of the Garden Banks area and replicates much
and Príncipe, South Africa and Tunisia. of the Vito and Whale topsides design. The Sparta development is
expected to reach first oil in 2028 and reach peak production of
In 2021, Shell announced plans to hand back upstream assets approximately 90,000 boe/d.
associated with the Miskar and Hasdrubal concessions to the
government of Tunisia. In June 2022, Shell handed back the Miskar FID was also taken on the Perdido Phase 3 development, a planned
concession upon its expiry. Discussions continue regarding the subsea tieback campaign delivering three wells in the Great White
Hasdrubal early relinquishment. unit to increase production at the Shell-operated Perdido spar (Shell
interests 33.3% to 40%). After completion of this campaign in April
North America 2025, these wells collectively are expected to produce up to
USA 22,000 boe/d at peak production.
The majority of our oil and gas interests in the USA comprise leases
for federal offshore blocks in the deep waters of the Gulf of Mexico. In 2023, we continued to build our Gulf of Mexico portfolio through
Such leases usually have a fixed primary term and, once production inorganic growth, acquiring an additional 20% working interest in the
is established, remain in effect through continued production, subject Kaikias field (Shell interest now 100%). Kaikias is a subsea tieback to the
to compliance with the relevant terms and provisions (including Shell-operated Ursa production hub (Shell interests 45.4% to 100%).
applicable laws and regulations).
In early 2024, the Whale production hub (Shell interest 60%) arrived at
In February 2023, we completed the sale of our 100% interest in Shell its offshore destination in the Alaminos Canyon area. Whale is expected
Onshore Ventures LLC, which held a 51.8% membership interest in Aera to start production in late 2024 and reach a peak production of
Energy LLC, an onshore production entity located in California. approximately 100,000 boe/d.

Shell holds an interest in one licence in the North Slope area of Alaska. In February 2024, we began production at Rydberg (Shell interest 80%),
In 2020, we received regulatory approval to combine our near-shore a subsea tie-back to the Shell-operated Appomattox production hub
leases in West Harrison Bay into a single unit. Shell is seeking a co- (Shell interest 79%). Rydberg is expected to produce up to 14,000
owner to operate the unit. barrels of oil equivalent per day (boe/d) at peak rates.

Gulf of Mexico
Shell's major production area in the USA is the Gulf of Mexico. We
have a total of 288 active federal offshore leases, where Shell is the
operator, and 116 active federal offshore leases, where Shell has a
non-operated interest.

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In the north-western Argentina basin, we have a non-operated interest

in the onshore Acambuco area (Shell interest 22.5%), operated by Pan
American Energy.

In addition to the producing interests, we are the operator of two

frontier exploration blocks offshore Argentina (Shell interest 60% each)
and we have a non-operated interest in an adjacent block (Shell
interest 30%), operated by Equinor.

Brazil
Shell's operated assets in Brazil consist of the Bijupirá and Salema
fields (Shell interest 80% each), which are being decommissioned; the
producing BC-10 field (Shell interest 50%) in the Campos Basin; the
Gato do Mato and the adjacent Sul de Gato do Mato areas in the
Santos Basin (Shell interest 50%), subject to unitisation and with
development options under evaluation. We also hold interests in
Simplified platforms lower costs exploration blocks: 11 in the Santos Basin (Shell interests 70% to
and emissions in Gulf of Mexico 100%), six blocks in the Barreirinhas Basin (Shell interests 50% to
100%), five blocks in the Campos Basin (Shell interests 40% to 100%)
Our oil and gas business is working to generate more and one block in the Potiguar Basin (Shell interest 100%).
value from our assets with less emissions, while providing the
energy the world needs. In the US Gulf of Mexico, we are the Our non-operated portfolio consists of eight producing fields in the
leading operator and have one of the lowest greenhouse gas offshore Santos Basin: the Sapinhoá field (Shell interest 30%,
intensities in the world for producing oil, compared with those operated by Petrobras and straddling the BM-S-9 and Entorno de
of other members of the International Association of Oil & Sapinhoá blocks already unitised); the Lapa field (Shell interest 30% in
Gas Producers. Block BM-S-9A, operated by TotalEnergies); the Berbigão and Sururu
fields (Shell interest 25% in Block BM-S-11A, operated by Petrobras
Our operated deep-water platform Vito (Shell interest 63.1%) and subject to ongoing unitisation agreement discussions); the Atapu
started production in 2023. Vito is a third the size of its original field (Shell interest 16.7% and straddling the BM-S-11A and Atapu PSC
design, which will reduce its emissions by around 80% over its area already unitised); the Tupi field (Shell interest 23%, already
operating life. We are using the same design concept for our unitised, in Block BM-S-11 and operated by Petrobras); the Iracema
operated Whale facility (Shell interest 60%), which is expected field (Shell interest 25% in Block BM-S-11 and operated by Petrobras);
to start production in 2024. and the Mero field in the Libra PSC area (Shell interest 19.3%, already
unitised with an adjoining open area and operated by Petrobras).
In December 2023, we took the final investment decision to
build the Sparta platform (Shell interest 51%), which will be our In addition to the producing assets, we hold interests in five non-
15th deep-water host in the Gulf of Mexico. Its design is based operated exploration blocks: three in the Santos Basin (Shell
on decades of technical expertise and showcases our simplified interests 20% to 40%, operated by Petrobras) and two in the
approach to designing platforms. The Sparta development will Potiguar Basin (Shell interests 40%, both operated by Petrobras).
be the first of Shell’s replicable projects to feature all-electric
topsides equipment, significantly reducing GHG intensity and In December 2023, the Sepetiba FPSO production started in the Mero
emissions. Sparta is expected to start production in 2028. field. Mero is expected to receive two more FPSOs and start producing
from these by the end of 2025.

Photo: The Whale platform in Singapore where it was built. Rest of South America
Shell also has interests in Suriname and Uruguay.

Rest of North America Trading and Supply

Shell also has deep-water licences and one shallow-water licence Shell markets and trades crude oil from most of its Upstream operations.
in Mexico.

South America
Argentina
Shell has interests in the onshore Vaca Muerta Basin in the Neuquén
Province. We are the operator of the Cruz de Lorena, Sierras Blancas,
Coiron Amargo Sur Oeste (Shell interest 90% each), and Bajada de
Añelo (Shell interest 50%) areas. We have non-operated interests in the
areas of Rincon La Ceniza and La Escalonada (Shell interest 45% each),
both operated by Total Austral S.A., and in the Bandurria Sur area (Shell
interest 30%), operated by YPF S.A. We are the administrator in a joint
property agreement that regulates the operation of the pipeline (Shell
interest 60%) which connects Sierras Blancas and the regional
distribution network. Shell has a participating interest in an oil pipeline
located in the northern area of the basin which connects to the Pacific
Evacuation Route (Shell interest 13.3%), operated by YPF S.A.

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Oil and gas information

Proved developed and undeveloped reserves of Shell subsidiaries and Shell share of joint ventures and associates

Crude oil and

natural gas liquids Synthetic crude oil Natural gas Total
(million barrels) (million barrels) (thousand million scf) (million boe)
Shell subsidiaries
Increase/(decrease) in 2023:
Revisions and reclassifications 425 35 2,602 909
Improved recovery 3 — — 3
Extensions and discoveries 97 — 336 155
Purchases and sales of minerals in place (117) 11 (97) (123)
Total before taking production into account 408 46 2,841 944
Production [A] (508) (20) (2,613) (978)
Total (100) 26 228 (34)
At January 1, 2023 3,612 731 23,048 8,317
At December 31, 2023 3,512 757 23,276 8,283
Shell share of joint ventures and associates
Increase/(decrease) in 2023:
Revisions and reclassifications (7) — (84) (21)
Improved recovery — — — —
Extensions and discoveries — — 30 5
Purchases and sales of minerals in place 85 — 1,516 346
Total before taking production into account 78 — 1,462 330
Production [B] (23) — (368) (87)
Total 55 — 1,094 243
At January 1, 2023 337 — 5,359 1,261
At December 31, 2023 392 — 6,453 1,504
Total — — — —
Increase/(decrease) before taking production into account 486 46 4,303 1,274
Production (531) (20) (2,981) (1,065)
Increase/(decrease) (45) 26 1,322 209
At January 1, 2023 3,949 731 28,407 9,578
At December 31, 2023 3,904 757 29,729 9,787
Reserves attributable to non-controlling interest in
Shell subsidiaries at December 31, 2023 — 378 — 378

[A] Includes 41 million boe consumed in operations (natural gas: 233 thousand million scf; synthetic crude oil: 1 million barrels).
[B] Includes 5 million boe consumed in operations (natural gas: 27 thousand million scf).

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Proved reserves Proved undeveloped reserves

Before taking production into account, our proved reserves increased by In 2023, Shell subsidiaries and the Shell share of joint ventures and
1,274 million boe in 2023. This consisted of an increase of 944 million associates' PUD increased by 209 million boe to 2,958 million boe.
boe from Shell subsidiaries and an increase of 330 million boe from the There were decreases of 494 million boe as a result of maturation to
Shell share of joint ventures and associates. After taking production into PD, mainly 81 million boe in Mabrouk North-East (Oman), 77 million
account, our proved reserves increased by 209 million boe in 2023 to boe in Vito (USA), 74 million boe in Gorgon (Australia) and 262
9,787 million boe at December 31, 2023. million boe spread across other fields. These were offset by an increase
of 47 million due to de-maturation of PD to PUD, an increase of 146
Shell subsidiaries million boe as a result of revisions, reclassifications and entitlement
Before taking production into account, Shell subsidiaries' proved changes, a net increase of 347 million boe due to purchases and sales
reserves increased by 944 million boe in 2023. This consisted of an of minerals in place, a net increase of 160 million boe due to extensions
increase of 408 million barrels of crude oil and natural gas liquids, and discoveries, mainly due to 57 million boe in Sparta (USA), 39
an increase of 490 million boe (2,841 thousand million scf) of natural million boe in Groundbirch (Canada), and 64 million boe spread
gas and an increase of 46 million barrels of synthetic crude oil. The across other fields, and an increase of 3 million boe due to
944 million boe increase comprised a net increase of 909 million boe improved recovery.
from revisions and reclassifications, an increase of 155 million boe from
extensions and discoveries, an increase of 3 million boe from improved In addition to the maturation of 494 million boe from PUD to PD,
recovery and a net decrease of 123 million boe related to purchases 90 million boe was matured to PD as through PUD as a result of
and sales of minerals in place. project execution during the year.

After taking into account production of 978 million boe (of which 41 PUD held for five years or more (PUD5+) on December 31, 2023,
million boe were consumed in operations), Shell subsidiaries' proved amounted to 212 million boe, an increase of 56 million boe compared
reserves decreased by 34 million boe in 2023 to 8,283 million boe. with the end of 2022. The increase in PUD5+ during 2023 was driven
In 2023, Shell subsidiaries' proved developed reserves (PD) increased mainly by changes in Assa North (Nigeria) and Gbaran (Nigeria).
by 100 million boe to 6,321 million boe and proved undeveloped
reserves (PUD) decreased by 134 million boe to 1,962 million boe. The fields with the largest PUD5+ on December 31, 2023, were Assa
North (Nigeria) and Tupi (Brazil). These PUD5+ remain undeveloped
Shell share of joint ventures and associates because of delays in drilling operations and security incidents (Nigeria)
Before taking production into account, the Shell share of joint or because of ongoing development involving a large number of deep-
ventures and associates' proved reserves increased by 330 million water wells (Brazil).
boe in 2023. This consisted of an increase of 78 million barrels of
crude oil and natural gas liquids, and an increase of 252 million During 2023, we spent $7.2 billion on development activities related
boe (1,462 thousand million scf) of natural gas. The 330 million boe to PUD maturation.
increase comprises a net increase of 346 million boe from purchase
of minerals in place, an increase of 5 million boe from extensions Delivery commitments
and discoveries, and a net decrease of 21 million boe from We sell crude oil and natural gas from our producing operations under
revisions and reclassifications. a variety of contractual obligations. Most contracts generally commit
us to sell quantities based on production from specified properties,
After taking into account production of 87 million boe (of which 5 although some natural gas sales contracts specify delivery of fixed
million boe were consumed in operations), the Shell share of joint and determinable quantities, as discussed below.
ventures and associates' proved reserves increased by 243 million
boe to 1,504 million boe at December 31, 2023. In the past three years, we met our contractual delivery commitments,
with the notable exceptions of Egypt, Trinidad and Tobago, and
The Shell share of joint ventures and associates' PD decreased by Malaysia. The delivery commitments for Egypt and Trinidad and
100 million boe to 508 million boe, and PUD increased by 343 million Tobago have been renegotiated. In the period 2024-2026, we are
boe to 996 million boe. contractually committed to deliver to third parties, joint ventures and
associates a total of some 5,380 billion scf of natural gas from our
See "Supplementary information - oil and gas (unaudited)" on pages 317-335 for more subsidiaries, joint ventures and associates. The sales contracts contain
information about proved oil and gas reserves of Shell subsidiaries and the Shell share of a mixture of fixed and variable pricing formulae that are generally
the proved oil and gas reserves of joint ventures and associates. referenced to the prevailing market price for crude oil, natural gas or
other petroleum products at the time of delivery.

In the period 2024-2026, we expect to meet our delivery commitments

for almost all the areas in which they are carried, with an estimated
70% coming from PD, 5% through the delivery of gas that becomes
available to us from paying royalties in cash, and 25% from the
development of PUD as well as other new projects and purchases.

The key exception is:

￮ In Malaysia, a the third-party gas supply line under maintenance was
not repaired in 2023. Force majeure has been declared, and no
penalties have been incurred, resulting in an expected true shortfall
of some 68 billion scf of gas (62% of the promised gas delivery).

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Summary of proved oil and gas reserves of Shell subsidiaries and Shell share of joint ventures and associates
(at December 31, 2023)

Based on average prices for 2023

Crude oil and

natural gas liquids Natural gas Synthetic crude oil Total (million
(million barrels) (thousand million scf) (million barrels) boe) [A]
Proved developed
Europe 124 2,325 — 525
Asia 1,098 9,284 — 2,699
Oceania 53 5,098 — 932
Africa 230 875 — 381
North America
USA 305 268 — 351
Canada 2 706 757 881
South America 841 1,273 — 1,060
Total proved developed 2,653 19,829 757 6,829
Proved undeveloped
Europe 38 305 — 91
Asia 684 5,987 — 1,717
Oceania 26 1,359 — 260
Africa 29 972 — 196
North America — — — —
USA 134 217 — 172
Canada 3 777 — 137
South America 337 283 — 385
Total proved undeveloped 1,251 9,900 — 2,958
Total proved developed and undeveloped
Europe 162 2,630 — 616
Asia 1,782 15,271 — 4,416
Oceania 79 6,457 — 1,192
Africa 259 1,847 — 577
North America
USA 439 485 — 523
Canada 5 1,483 757 1,018
South America 1,178 1,556 — 1,445
Total 3,904 29,729 757 9,787
Reserves attributable to non-controlling interest in Shell subsidiaries — — 378 378

[A] Natural gas volumes are converted into oil equivalent using a factor of 5,800 scf per barrel.

Exploration UK
Shell continues to explore for and mature hydrocarbons across our In 2023, Shell farmed into two BP-operated exploration licences in the
Integrated Gas and Upstream businesses. Exploration may result in West of Shetlands area, acquiring a 33.33% non-operated interest.
discoveries of oil and gas that we can develop, helping maintain We were also awarded nine licences as part of the 33rd Offshore
energy security and contributing to our strategy. Licensing Round, two of which are pending government approval
(Shell-operated interests 55.5% to 100%). Additionally we relinquished
We use our subsurface, project and technical expertise, and actively four operated and two non-operated exploration licences across the
manage non-technical risks across a diversified portfolio of opportunities UK Continental Shelf (Shell interests 40% to 100%).
and projects. This involves adopting an integrated approach for all
stages, from basin choice to development. We use competitive Brunei
techniques and benchmark our approach internally and externally. In 2023, the exploration acreage that formed part of Block CA1
was relinquished.
In 2023, hydrocarbons were found in the UK, the Gulf of Mexico,
Brazil, Namibia, Brunei, Egypt, Colombia and Oman. Malaysia
In 2023, Shell signed two exploration PSCs, one for an offshore
Sarawak block (Shell interest 45%, operator) and one for a Sabah
ultra-deep-water block (Shell interest 40%, non-operated).

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Egypt Location of oil and gas exploration and production

In 2023, Shell signed an agreement to farm out 40% of its activities
participating interest in the Concession Agreement for Gas and
Crude Oil Exploration and Exploitation for the North East El Location of oil and gas exploration and production
Amriya Offshore Area of the Mediterranean Sea. The transaction activities [A] (at December 31, 2023)
is awaiting government approval. Shell will remain the operator
with a 60% interest. Development
and/or Shell
Exploration Production operator [B]
Gulf of Mexico
In 2023, Shell sold its operated working interests in six blocks (Shell Europe
interest 55.88% in four of them, 75% in two). We acquired 20 blocks in Albania ● ● ●
Lease Sale 259 (Shell interest 100%, operator). We relinquished leases Cyprus ●
for 25 blocks, with 12 of these blocks relinquished ahead of expiration
Germany ●
(Shell interests 50% to 100%). We also were apparent high bidder for
65 blocks in the Gulf of Mexico in Lease Sale 261. Italy ●
Netherlands ● ● ●
Brazil Norway ● ● ●
In 2023, the government ratified one Petrobras-operated Santos Basin
UK ● ● ●
block (Shell interest 40%), which was secured in 2022 in the 1st
Production Sharing Permanent Offer Bid Round. Shell relinquished five Asia
operated blocks (Shell interest 40% to 65%) and one non-operated Brunei ● ● ●
block (Shell interest 40%) ahead of expiration. We also secured 29
China ● ● ●
Petrobras-operated Pelotas Basin blocks in the 4th Permanent Offer
Concession Bid-Round (Shell interest 30%) and these are pending Kazakhstan ●
government ratification. Malaysia ● ● ●
Oman ● ● ●
Trinidad and Tobago
Qatar ● ●
In 2023, Shell relinquished one non-operated licence (Shell interest
35%). We also signed three deep-water PSCs for three exploration Oceania
blocks in the Columbus Basin (Shell interest 50%). We are an operator Australia ● ● ●
in one of them, BP is the operator of the other two. Africa
Egypt ● ● ●
Other
In Mauritania, in 2023, Shell acquired an exploration and production Mauritania ● ●
licence for one offshore block (Shell interest 90%, operator). We sold a Namibia ● ●
40% participating interest in our operated offshore block PSC and our
Nigeria ● ● ●
remaining interest is 50%.
São Tomé and Príncipe ● ●
In São Tomé and Príncipe, in 2023, we signed an agreement to farm South Africa ● ●
out our interest in three blocks (45% interest in two of them, 25% Tanzania ● ●
interest in the third). The remaining Shell-operated interest will be 40%
Tunisia ● ●
in each block.
North America
In Bolivia, in 2023, we relinquished one operated exploration licence Barbados ●
(Shell interest 100%). Canada ● ● ●
Mexico ● ●
In Colombia, in 2023, we relinquished one non-operated licence (Shell
interest 60%). USA ● ● ●
South America
In Suriname, in 2023, we acquired one block in the Demerara Bid
Argentina ● ● ●
Round (Shell interest 60%, operator). We also relinquished our non-
operated interest in one PSC for the shallow-water block. Bolivia ●
Brazil ● ● ●
In Uruguay, in 2023, the government ratified two exploration Colombia ● ● ●
blocks secured in the 2022 Open Uruguay Round (Shell-operated
Suriname ● ●
interest 100%).
Trinidad and Tobago ● ● ●

For further information, see "Supplementary information - oil and gas (unaudited)" on Uruguay ● ●
pages 317-335.
[A] Includes joint ventures and associates. Where a joint venture or an associate has
properties outside its base country, those properties are not shown in this table.
[B] In several countries where "Shell operator" is indicated, Shell is the operator of some
but not all exploration and/or production ventures.

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Oil and gas production available for sale

Crude oil and natural gas liquids [A]

Thousand barrels

2023 2022 2021

Shell share of Shell share of Shell share of
Shell joint ventures Shell joint ventures Shell joint ventures
subsidiaries and associates subsidiaries and associates subsidiaries and associates
Europe
Italy 8,373 — 9,091 — 9,677 —
UK 23,458 — 23,905 — 25,554 —
Other [B] 2,493 524 3,722 621 5,456 1,205
Total Europe 34,324 524 36,718 621 40,687 1,205
Asia
Brunei 1,271 14,395 3,256 16,282 1,076 17,894
Kazakhstan 38,765 — 29,667 — 35,592 —
Malaysia 12,630 — 16,759 — 17,983 —
Oman 82,849 — 82,006 — 78,745 —
Russia — — 10,955 1,963 21,012 7,769
Other [B] 25,240 7,443 24,965 7,498 30,061 7,548
Total Asia 160,755 21,838 167,608 25,743 184,469 33,211
Total Oceania [B] 10,370 — 9,391 — 11,844 —
Africa
Nigeria 37,137 — 27,554 — 35,911 —
Other [B] 1,084 — 1,855 — 5,540 —
Total Africa 38,221 — 29,409 — 41,451 —
North America
USA 112,912 — 121,690 — 164,811 —
Canada 597 — 687 — 2,640 —
Total North America 113,509 — 122,377 — 167,451 —
South America
Argentina 12,152 627 9,023 2,587 4,836 1,566
Brazil 136,825 — 127,862 — 126,566 —
Other [B] 1,425 — 1,583 — 1,620 —
Total South America 150,402 627 138,468 2,587 133,022 1,566
Total 507,581 22,989 503,971 28,951 578,924 35,982

[A] Reflects 100% of production of subsidiaries except in respect of production-sharing contracts (PSCs), where the figures shown represent the entitlement of the subsidiaries concerned under
those contracts.
[B] Comprises countries where production was lower than 10,100 thousand barrels or where specific disclosures are prohibited.

Synthetic crude oil

Thousand barrels
2023 2022 2021
Shell Shell Shell
subsidiaries subsidiaries subsidiaries
North America - Canada 19,102 16,949 19,891

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Natural gas [A]

Million standard cubic feet

2023 2022 2021
Shell share of Shell share of Shell share of
Shell joint ventures Shell joint ventures Shell joint ventures
subsidiaries and associates subsidiaries and associates subsidiaries and associates
Europe
Netherlands — 55,351 — 133,210 — 159,107
Norway 150,318 — 174,523 — 178,577 —
UK 70,585 — 69,647 — 49,128 —
Other [B] 38,774 — 45,159 — 47,127 —
Total Europe 259,677 55,351 289,329 133,210 274,832 159,107
Asia
Brunei 13,531 136,684 15,328 138,007 17,989 147,865
China 48,170 — 56,008 — 55,967 —
Kazakhstan 75,521 — 57,932 — 72,176 —
Malaysia 173,638 — 200,249 — 193,871 —
Oman 55,675 — — — — —
Russia — — 2,085 37,897 4,113 125,973
Other [B] 369,125 118,252 378,313 118,435 447,743 118,397
Total Asia 735,660 254,936 709,915 294,339 791,859 392,235
Oceania
Australia 700,248 29,773 693,293 22,577 696,562 19,272
Total Oceania 700,248 29,773 693,293 22,577 696,562 19,272
Africa
Egypt 21,434 — 49,618 — 86,348 —
Nigeria 96,967 — 118,032 — 161,916 —
Other [B] 3,423 — 11,966 — 23,473 —
Total Africa 121,824 — 179,616 — 271,737 —
North America
USA 104,079 — 112,560 — 198,578 —
Canada 137,660 — 122,753 — 116,423 —
Total North America 241,739 — 235,313 — 315,001 —
South America
Bolivia 35,432 — 40,360 — 45,214 —
Brazil 71,162 — 73,975 — 72,107 —
Trinidad and Tobago 199,877 — 186,150 — 121,411 —
Other [B] 14,204 857 12,912 2,227 11,006 393
Total South America 320,675 857 313,397 2,227 249,738 393
Total 2,379,823 340,917 2,420,863 452,353 2,599,729 571,007

[A] Reflects 100% of production of subsidiaries except in respect of PSCs, where the figures shown represent the entitlement of the subsidiaries concerned under those contracts.
[B] Comprises countries where production was lower than 41,795 million scf or where specific disclosures are prohibited.

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Average realised price by geographical area

Crude oil and natural gas liquids

$/barrel
2023 2022 2021
Shell share of Shell share of Shell share of
Shell joint ventures Shell joint ventures Shell joint ventures
subsidiaries and associates subsidiaries and associates subsidiaries and associates
Europe 77.19 79.10 94.52 91.26 68.30 64.18
Asia 76.57 82.24 88.69 100.81 63.82 70.09
Oceania 58.31 — 78.37 — 63.56 —
Africa 84.33 — 104.84 — 70.89 —
North America - USA 75.07 — 92.89 — 62.75 —
North America - Canada 46.45 — 62.10 — 46.58 —
South America 71.93 67.98 85.84 71.21 64.28 56.91
Total 75.12 81.75 90.06 97.80 64.28 69.34

Synthetic crude oil

$/barrel
2023 2022 2021
Shell Shell Shell
subsidiaries subsidiaries subsidiaries
North America - Canada 69.26 86.93 60.11

Natural gas

$/thousand scf
2023 2022 2021
Shell share of Shell share of Shell share of
Shell joint ventures Shell joint ventures Shell joint ventures
subsidiaries and associates subsidiaries and associates subsidiaries and associates
Europe 17.47 18.89 27.24 39.11 [A] 10.71 9.86
Asia 2.84 7.60 3.74 10.88 2.54 6.91
Oceania 11.05 6.23 13.21 6.75 7.74 4.04
Africa 3.25 — 7.08 — 3.43 —
North America - USA 3.74 — 8.46 — 4.40 —
North America - Canada 2.25 — 4.08 — 2.70 —
South America 5.10 3.69 8.71 3.90 4.04 1.82
Total 7.40 9.78 10.88 17.59 [A] 5.39 7.60

[A] As revised, following a reassessment.

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Average production cost by geographical area

Crude oil, natural gas liquids and natural gas [A]

$/boe

2023 2022 2021

Shell share of Shell share of Shell share of
Shell joint ventures Shell joint ventures Shell joint ventures
subsidiaries and associates subsidiaries and associates subsidiaries and associates
Europe 20.93 25.33 24.83 12.25 21.48 8.59
Asia 6.35 9.64 6.75 8.06 5.66 7.64
Oceania 9.01 21.23 10.32 24.97 9.26 24.68
Africa 11.12 — 13.66 — 11.47 —
North America - USA 9.62 — 11.03 — 10.88 —
North America - Canada 9.70 — 11.15 — 10.64 —
South America 7.36 9.03 6.91 7.74 5.80 5.51
Total 9.08 12.29 10.20 9.59 9.12 8.23

[A] Natural gas volumes are converted into oil equivalent using a factor of 5,800 scf per barrel.

Synthetic crude oil

$/barrel
2023 2022 2021
Shell Shell Shell
subsidiaries subsidiaries subsidiaries
North America - Canada 19.47 23.05 18.87

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Generating shareholder value

Marketing
Marketing comprises Mobility, Lubricants,
and Sectors and Decarbonisation activities.
Mobility operates our retail network, including
electric vehicle charging services. Lubricants
produces, markets and sells lubricants for
road transport, and for machinery used in
manufacturing, mining, power generation,
agriculture and construction. Through Sectors
and Decarbonisation we provide services,
fuels and other products that help
customers reduce emissions in the aviation,
marine and agricultural sectors, among
others. We are high-grading our electric
vehicle charging network to focus on key
markets, such as China, Europe and the USA.

Segment earnings ($ billion)

3.0 2022: 2.1

Adjusted Earnings ($ billion)

3.2 2022: 2.8

Cash flow from operating activities ($ billion)

6.1 2022: 2.4

Marketing sales volumes (thousand b/d)

2,554 2022: 2,503

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Key metrics

$ million, except where indicated

2023 2022 2021
Segment earnings*[A] [B] 2,950 2,133 3,535
Identified items (229) (622) 68
Adjusted Earnings* [A] 3,180 2,754 3,468
Adjusted EBITDA* [A] 6,037 5,324 6,021
Cash flow from operating activities 6,088 2,376 5,019
Cash capital expenditure* 5,612 4,831 2,273
Marketing sales volumes (thousand b/d) 2,554 2,503 2,433

[A] Segment earnings, Adjusted Earnings, and Adjusted EBITDA are presented on a current cost of supplies basis.
[B] See Note 7 to the "Consolidated Financial Statements".

Business conditions Cash flow from operating activities

For the business conditions relevant to Marketing, see "Market Cash flow from operating activities was primarily driven by Adjusted
overview" on pages 38-40. EBITDA; working capital inflows of $873 million; and the timing impact
of payments, relating to emission certificates and biofuel programmes
Marketing sales of $296 million. These inflows were partly offset by tax payments
In 2023, Marketing sales volumes were 2% higher than in 2022, of $744 million and non-cash cost-of-sales (CCS) adjustments of
mainly as a result of improved demand from aviation. $221 million.

Earnings 2023-2022 Cash capital expenditure

Segment earnings in 2023 were 38% higher than in 2022, reflecting Cash capital expenditure in 2023 reflected $3.3 billion in low-carbon
higher Marketing margins (increase of $1,465 million), including higher energy solutions, compared with $1.4 billion in 2022.
unit margins in Mobility; higher margins in Lubricants because of lower
feedstock costs; and higher volumes in Sectors and Decarbonisation. Cash capital expenditure in low-carbon energy solutions was 136%
These increases were partly offset by higher operating expenses higher than in 2022, mainly due to the acquisition of Nature Energy
(increase of $703 million) and higher depreciation charges and the expansion of our Mobility electric vehicle charging business.
(increase of $264 million), mainly due to asset acquisitions.
See "Our journey to net zero" on page 95.
Segment earnings in 2023 included impairment charges of
$457 million and charges of $111 million related to redundancy and
restructuring partly offset by gains of $298 million, related to indirect Our cash capital expenditure is expected to be around $3 billion
tax credits. These charges and gains are part of identified items and in 2024.
compare with 2022, which included net impairment charges and
reversals of $321 million; net losses of $135 million related to the Portfolio and business developments
sale of assets; and provisions for onerous contracts of $62 million. Significant portfolio and business development:
￮ In February 2023, we completed the acquisition of 100% of the
Adjusted Earnings increased by $426 million compared with 2022, shares of Nature Energy Biogas A/S for nearly $2 billion. This
as a result of the following: supports our ambitions to build an integrated renewable natural
￮ Mobility Adjusted Earnings were $53 million lower, mainly as a gas (RNG) value chain at global scale.
result of higher operating expenses and higher depreciation. This
was partly offset by better margins.
￮ Lubricants Adjusted Earnings were $339 million higher, mainly
because of higher margins due to lower feedstock costs.
￮ Sectors and Decarbonisation Adjusted Earnings were $141 million
higher, mainly because of increased volumes and higher earnings
in joint ventures.

Prior year earnings summary

Our earnings summary for the financial year ended December 31,
2022, compared with the financial year ended December 31, 2021,
can be found in the Annual Report and Accounts (page 61) and Form
20-F (page 65) for the year ended December 31, 2022, as filed with
the Registrar of Companies for England and Wales and the US
Securities and Exchange Commission, respectively.

* Non-GAAP measure (see page 365).

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Business and property

Mobility
Shell is one of the world's largest mobility retailers by number of
sites, with more than 47,000 Shell-branded mobility locations in
more than 80 markets at the end of 2023. We operate different
models across these markets, from full ownership of sites to brand
licensing agreements. As we aim to high-grade our network, we plan
to divest around 500 Shell-owned sites (including joint ventures)
each year until 2025.

Every day, around 33 million retail customers visit our mobility locations
for a range of quality fuels, electric vehicle charging, and convenience
and non-fuel products and services. Through Shell Fleet Solutions, our
business customers can obtain fuel cards, road services and carbon-
offset offers, among other products and services.

Our largest electric vehicle charging We are expanding our convenience and non-fuel retail offer to cater to
station opens in Shenzhen our customers' needs. At many of our sites, we offer convenience items,
including beverages and fresh food, and services such as lubricant
We opened our largest electric vehicle (EV) charging station changes and car washes. At the end of 2023, Shell operated 13,000
globally in Shenzhen, China, in September 2023. The Shell convenience stores worldwide. We have upgraded close to 2,000
Recharge Shenzhen Airport EV Station is designed to serve stores with our Shell Café premium fresh coffee and food offer since
thousands of drivers every day with 258 fast-charging points launching in 2021.
in one of the country's major economic and technology hubs.
Shell Mobility aims to take a leadership position in the energy
China is one of the most important growth markets for Shell transition by marketing more and cleaner fuels for our customers,
Mobility and will play a key role in Shell's electric vehicle focusing on growing our presence in key markets like China, Europe
charging strategy which is to continue building the infrastructure and the USA. To support this, we acquired Volta Inc. in 2023 and now
needed to meet our customers' future demand for charging. own and operate one of the largest public electric vehicle charging
Globally, we are focusing on public charging and we expect networks in the USA. At the end of 2023, Shell had around 54,000
to increase our charge points to around 200,000 by 2030. public charge points globally at Shell forecourts, on-street locations,
mobility hubs and other sites, such as supermarkets.
The Shenzhen charging station -- operated by Shell and BYD
Electric Vehicle Investment Company Limited, a joint venture Shell opened its largest electric vehicle charging station in the world
between Shell and Chinese electric vehicle manufacturer BYD -- in Shenzhen, China, with 258 public fast-charging points.
served more than 3,300 electric vehicles a day during its trial
operation. As we work to provide more low-carbon alternatives to our customers,
we continue to develop traditional fuels for drivers of internal
The rooftop solar panels installed at the Shenzhen station have combustion engine vehicles. Aided by our partnership with Scuderia
the capacity to generate about 300,000 kilowatt-hours of Ferrari, we have concentrated on developing fuels with special
renewable electricity per year, and this would be available to formulations designed to clean engines and improve performance.
charge customers' vehicles. In addition to charging, the station We sold fuels under the Shell V-Power brand in 68 markets in 2023.
also offers convenience retailing, food and beverages, and a
drivers' lounge. Shell Commercial Road Transport (CRT) provides fuels, lubricants and
digital services to customers with heavy-duty vehicles in their fleets.
Through joint ventures and wholly owned enterprises, Shell in In 2023, Shell opened its first public electric vehicle charging facility
China operates a retailing network of around 2,000 fuel stations for trucks in Hamburg, Germany. This consists of four fast-charging
and an electric vehicle charging network of 25,000 public stations, and multiple eDepot solutions, which provide charging
charge points. The utilisation rate of our electric vehicle chargers facilities at customer sites.
in all of China was around 25% in 2023, which is two-and-a-half
times the industry average. We also offer drivers using heavy-duty LNG-fuelled trucks access to
operated and partner networks in Europe. In 2023 we opened our
Shell offers products and services to meet the different energy first LNG refuelling sites in Austria and Hungary.
and mobility needs of drivers. In September 2023, we opened
the Panlong Integrated Energy Station in Wuhan. This station
offers petrol and diesel, charging and hydrogen refuelling.

Photo: Electric vehicle charging station at Shenzhen airport, China.

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In Germany, Shell is building a bioLNG liquefaction plant at Shell's Shell Marine offers customers marine fuels and lubricants, as well
Energy and Chemicals Park Rheinland. This liquefaction plant will as low-carbon solutions, and has a supply network that covers key
supply the German market with bioLNG from 2024 and will help bunkering locations around the world. Through our marine activities,
our CRT customers decarbonise their operations. Since 2022, we primarily provide the shipping and maritime sectors with lubricants,
Shell's customers in the Netherlands have been able to receive and we provide fuels, chemical products, and related technical and
a bioLNG blend. digital services. We supply more than 300 grades of lubricants and
seven types of fuel to vessels worldwide, ranging from ocean-going
Lubricants tankers to fishing boats. Shell Marine lubricant products are used in
Shell Lubricants has been the number one global finished lubricants around 10,000 vessels and are available in more than 700 ports
supplier in terms of market share for 17 consecutive years, according across more than 60 countries.
to Kline & Company data for 2022. Shell lubricants are available
across more than 160 markets for passenger cars, motorcycles, Shell Bitumen supplies customers across 60 markets and provides
trucks, coaches, and machinery used in manufacturing, mining, enough bitumen to resurface 500 kilometres of road lanes every
power generation, agriculture and construction. day. It also invests in research and development to create
innovative products, such as bitumen that can help reduce the
We also make premium lubricants for conventional vehicles and Shell impact of asphalt production and paving on local air quality.
E-fluids for electric vehicles using gas-to-liquids (GTL) base oils that are
made from natural gas at our Pearl GTL plant in Qatar. Shell Sulphur Solutions manages the value chain of sulphur from
refining to marketing. It provides sulphur for use in applications,
See "Integrated Gas" on page 46.
such as fertiliser, mining and chemicals. It also licenses Shell Thiogro
technologies to create sulphur-enhanced fertilisers.

Our global lubricants supply chain has a network of 32 lubricants Shell and the non-operated joint venture Raízen (Shell interest 44%)
blending plants, four base oil plants (one of which we operate), are, together, one of the world's largest blenders and distributors of
10 grease plants and six GTL base oil storage hubs. biofuels. In 2023, around 9.7 billion litres of biofuels (2022: 9.5 billion
litres) went into Shell's sale of fuels worldwide, which includes the Shell
During 2023, we completed the acquisition from M&I Materials share of sales made by Raízen. In addition, in 2023, Raízen produced,
Development Limited of the MIDEL premium product range of ester- on a 100% basis, around 3.12 billion litres of ethanol (2022: 3 billion
based dielectric transformer fluids, which provide a differentiated litres) and around 5.8 million tonnes of sugar from sugar cane (2022:
position in Transformer Oils. These oils are used in power distribution, 4.8 million tonnes). The cellulosic ethanol plant at Raízen's Costa
offshore wind parks, utility companies and traction power systems. We Pinto mill in Brazil produced 30 million litres of second-generation
also acquired the MIVOLT brand of dielectric fluids for the direct ethanol in 2023 (2022: 26 million litres). The majority of the ethanol
immersion cooling of battery systems and power electronics. MIVOLT's and cellulosic ethanol produced by Raízen is sold unblended to
ester-based immersion cooling fluids support the development of international customers in markets such as the USA, Europe and Japan.
thermally efficient electric vehicle batteries, battery storage systems
and data centres. RNG, also known as biogas or biomethane, is gas derived from
processing organic waste in a controlled environment until it is fully
Sectors and Decarbonisation interchangeable with conventional natural gas.
Sectors and Decarbonisation sells fuels, speciality products and
services, including low-carbon energy solutions, to a broad range In February 2023, Shell completed the acquisition of Nature Energy,
of commercial customers, including in the aviation, marine one of the largest producers of RNG in Europe. This acquisition
and agricultural sectors. supports our ambitions to build an integrated RNG value chain at
global scale as we seek to profitably grow our low-carbon offerings
Shell Aviation provides aviation fuel, lubricants and low-carbon across multiple sectors. Shell aims to generate additional value
solutions globally. In May 2023, Shell announced a multi-year offtake from our trading and supply chain. Together with its partners, Nature
agreement for sustainable aviation fuel with Montana Renewables, Energy owns and operates 13 biogas plants in Denmark and one in
one of the largest sustainable aviation fuel producers in North America. the Netherlands.
In 2022, Shell launched Avelia, one of the world's first blockchain-
powered digital sustainable aviation fuel (SAF) book-and-claim Shell is constructing two facilities which will convert dairy manure
solutions for business travel. Since then, customers – including Google, to RNG and which will be located at the Bettencourt Dairies in
Bank of America and Yokogawa – have joined the platform. Avelia is Wendell, Idaho, USA. Shell Downstream Bovarius is expected to
designed to help trigger demand for SAF, encouraging investment in produce around 400,000 MMBtu a year of negative-carbon-intensity
production, which could lower the price point for these fuels. RNG. The second facility, Shell Downstream Friesian, is expected to
produce around 350,000 MMBtu a year of negative-carbon-intensity
RNG using cow manure from the dairy once operational. Both facilities
are expected to be operational in 2024.

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Marketing data tables Marketing sales volumes [A][B][C]

Branded mobility locations [A] Thousand b/d

2023 2022 2021
2023 2022 2021
Europe
Europe 8,346 8,260 8,178
Mobility 377 359 [D] 360
Asia [B] 10,824 10,470 10,753
Lubricants 16 17 16
Oceania [B] 1,087 1,083 1,060
Sectors and Decarbonisation 186 175 [D] 121
Africa 2,917 2,815 2,724
Total 579 551 497
Americas [C] 23,830 23,597 23,305
Asia
Total [D] 47,004 46,225 46,020
Mobility 524 531 [D] 512
[A] Includes different models, from full-ownership retail sites, and sites operated by joint
Lubricants 39 38 42
ventures, through to trademark licensing agreements, and excludes sites closed for more
than six months. Sectors and Decarbonisation 138 113 [D] 107
[B] Asia includes Turkey; Oceania includes French Polynesia, Guam, Palau and New
Caledonia. Total 701 682 661
[C] Includes around 8,110 sites operated by the Raízen joint venture.
[D] Includes 10,112 sites operated through trademark licensing agreements. Africa
Mobility 47 47 [D] 45
Lubricants 3 3 3
Sectors and Decarbonisation 9 8 [D] 7
Total 59 58 55
Americas
Mobility 787 797 [D] 828
Lubricants 24 25 24
Sectors and Decarbonisation 404 390 [D] 368
Total 1,215 1,212 1,220
Total product sales
Mobility 1,735 1,734 [D] 1,745
Lubricants 82 83 85
Sectors and Decarbonisation 737 686 [D] 603
Total 2,554 2,503 2,433
Gasolines 1,183 1,160 1,165
Kerosenes 365 321 232
Gas/Diesel oils 716 731 746
Fuel oil 13 11 7
Other products [E] 277 280 283
Total 2,554 2,503 2,433

[A] Excludes deliveries to other companies under reciprocal sale and purchase arrangements,
that are in the nature of exchange contracts.
[B] Includes the Shell share of Raízen's sales volumes and other joint ventures' sales volumes.
[C] Excludes sales volumes from markets where Shell operates under trademark licensing
agreements.
[D] Previously reported within the Sectors and Decarbonisation class of business, with effect
from July 1, 2023, the Commercial Road Transport business (CRT) is part of Mobility and
Customer Operations is part of Lubricants. Comparative information has been revised.
[E] Includes LPG sales volumes of 14 thousand b/d (2022: 14 thousand b/d; 2021: 13
thousand b/d).

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Chemicals
and Products
Chemicals and Products includes refineries
which turn crude oil and other feedstocks into
a range of products. It also includes chemicals
manufacturing plants with their own marketing
network. We move products around the
world for domestic, industrial and transport
use. The business also includes pipelines,
trading of oil, oil products and petrochemicals,
and the extraction of bitumen from mined oil
sands which is converted into synthetic oil. We
are expanding our product portfolio to include
sustainable chemicals made from bio-based
and circular feedstocks. We are also
repurposing our refineries into energy and
chemicals parks to help us meet customers'
low-carbon and sustainability needs.

Segment earnings ($ billion)

1.5 2022: 4.5

Adjusted Earnings ($ billion)

3.7 2022: 4.7

Cash flow from operating activities ($ billion)

7.0 2022: 12.9

Refinery processing intake (thousand b/d)

1,349 2022: 1,402

Refining & Trading sales volumes (thousand b/d)

1,570 2022: 1,700

Chemicals sales volumes (thousand tonnes)

11,245 2022: 12,281

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Key metrics

$ million, except where indicated

2023 2022 2021
Segment earnings*[A] [B] 1,530 4,515 404
Identified items (2,160) (204) (1,712)
Adjusted Earnings*[A] 3,690 4,719 2,115
Adjusted EBITDA*[A] 7,710 8,561 5,635
Cash flow from operating activities 6,987 12,906 3,709
Cash capital expenditure* 3,192 3,838 5,175
Chemicals manufacturing plant utilisation (%) 68% 79% 85%
Refinery utilisation (%) 85% 86% 80%
Refinery processing intake (thousand b/d) 1,349 1,402 1,639
Refining & Trading sales volumes (thousand b/d) 1,570 1,700 2,026
Chemicals sales volumes (thousands tonnes) 11,245 12,281 14,216

[A] Segment earnings, Adjusted Earnings, and Adjusted EBITDA are presented on a current cost of supplies basis.
[B] See Note 7 to the "Consolidated Financial Statements".

Business conditions These charges and gains are part of identified items and compare
For the business conditions relevant to Chemicals and Products, with 2022, which included:
see "Market overview" on pages 38-40. ￮ net impairment charges and reversals of $226 million;
￮ legal provisions of $149 million;
Chemicals manufacturing plant utilisation ￮ unfavourable movements of $147 million related to the fair value
Utilisation is defined as the actual usage of the plants as a percentage accounting of commodity derivatives;
of the rated capacity. Chemicals manufacturing plant utilisation was ￮ tax charges relating to the EU solidarity contribution of $74 million;
11 percentage points lower than in 2022, mainly due to planned and partly offset by gains of $223 million, related to the sale of assets;
unplanned maintenance. and
￮ gains of $104 million, related to the remeasurement of redundancy
Refinery utilisation and restructuring costs.
Utilisation is defined as the actual usage of the plants as a
percentage of the rated capacity. Refinery utilisation was in line In 2023, Adjusted Earnings from Chemicals accounted for (44)%,
with 2022. Refining for 66% and Trading and Supply for 78%. The decrease in
Adjusted Earnings of $1,029 million was driven by the following:
Chemicals and Products sales ￮ Products Adjusted Earnings were $778 million lower than in 2022,
Chemicals sales volumes were 8% lower than in 2022, mainly because mainly driven by lower refining and oil sands margins and partly
of lower demand driven by oversupply and a weak economic outlook. offset by higher margins from Trading & Optimisation.
￮ Chemicals negative Adjusted Earnings were $251 million more than
Refining & Trading sales volumes were 8% lower than in 2022 due to in 2022, mainly because of higher depreciation and operating
lower Trading sales volumes in the USA and Asia. expenses, partly offset by higher margins and Income from
associates.
Earnings 2023-2022
Segment earnings in 2023 were 66% lower than in 2022, reflecting Prior year earnings summary
lower Products margins (decrease of $1,528 million), mainly driven Our earnings summary for the financial year ended December 31,
by lower refining margins and partly offset by higher margins from 2022, compared with the financial year ended December 31, 2021,
trading and optimisation. The segment earnings also reflected higher can be found in the Annual Report and Accounts (page 66) and Form
depreciation charges (increase of $546 million) due to the start-up of 20-F (page 70) for the year ended December 31, 2022, as filed with
operations at Shell Polymers Monaca in the USA. These losses were the Registrar of Companies for England and Wales and the US
partly offset by higher Chemicals margins (increase of $612 million). Securities and Exchange Commission, respectively.

Segment earnings in 2023 included the following: Cash flow from operating activities
￮ net impairment charges and reversals of $2,204 million, mainly Cash flow from operating activities was primarily driven by Adjusted
related to the Chemicals assets in Singapore; EBITDA, working capital inflows of $609 million, cash inflows relating
￮ charges of $84 million related to redundancy and restructuring; to commodity derivatives of $529 million, and dividends (net of profits)
partly offset by favourable movements of $213 million related from joint ventures and associates of $300 million. These inflows
to the fair value accounting of commodity derivatives. were partly offset by the timing impact of payments relating to
emission certificates and biofuel programmes of $1,224 million,
* Non-GAAP measure (see page 365). non-cash cost-of-sales (CCS) adjustments of $627 million, and
tax payments of $484 million.

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Cash capital expenditure We continue to evaluate ways to high-grade our refining portfolio
Cash capital expenditure decreased by $0.6 billion in 2023 mainly to meet our strategic aims and to capitalise on the strong integration
because of the completion of construction of our cracker facilities between our customers, trading operations and chemical plants.
in Pennsylvania, USA, in 2022. Our cash capital expenditure is We are repurposing our refining sites into energy and chemicals parks.
expected to be in the range of $3-4 billion in 2024. This will mean developing new facilities or converting existing units to
support low-carbon products, while dismantling existing units that do
Portfolio and business developments not deliver sustainable long-term value. We initiated a strategic review
Significant portfolio and business developments: of our Bukom and Jurong Island assets in Singapore.
￮ In November 2022, we commenced operations of our Pennsylvania
Chemical project, Shell Polymers Monaca (SPM). The facility was We announced the final investment decision to convert the
not fully functional during 2023 due to operational and start-up hydrocracker of the Wesseling site at the Energy and Chemicals
challenges. Park Rheinland in Germany into a production unit for Group III base
￮ In June 2023, Shell announced its intention to conduct a strategic oils. These mineral base oils have a very high viscosity index and are
review of energy and chemicals assets on Bukom and Jurong Island produced with hydrocracking technology. The market for high-quality
in Singapore. engine and transmission oils, as well as e-fluids and cooling fluids,
￮ In January 2024, we announced the final investment decision to some of which are made from these oils, is expected to grow. Crude
convert the hydrocracker of the Wesseling site at the Energy and oil processing will end at the Wesseling site by 2025 but continue
Chemicals Park Rheinland in Germany into a production unit for at the Godorf site.
Group III base oils.
Trading and Supply
Business and property Through our main trading offices in London, Houston, Singapore
Chemicals and Rotterdam, we trade crude oil, low-carbon fuels, refined
Our plants produce a range of base chemicals, including ethylene, products, chemical feedstocks and environmental products. Trading
propylene and aromatics, and intermediate chemicals, such as styrene and Supply trades in physical and financial contracts, lease storage
monomer, propylene oxide, solvents, detergent alcohols, ethylene and transportation capacities, and manages global shipping and
oxide and ethylene glycol. We have the capacity to produce around wholesale commercial fuel activities.
8.1 million tonnes of ethylene a year (including the Shell share of Operating in around 25 countries, with about 180 Shell and joint-
capacity entitlement (offtake rights) of joint ventures and associates, venture (including pipeline) terminals, we believe our supply and
which may be different from nominal equity interest). Our Pennsylvania distribution infrastructure is well positioned to make deliveries
Chemical project, SPM, which commenced operations in November around the world.
2022, was not fully functional during 2023 due to operational and
start-up challenges. The facility ramped up to full operation during the Shipping and Maritime enables the safe delivery of the Shell Trading
first quarter of 2024. We are expanding our product portfolio to and Supply contracts. This includes supplying feedstocks for our
include sustainable chemicals made from bio-based and circular refineries and chemical plants, and finished products such as gasoline,
feedstocks, and more intermediates and performance chemicals, such diesel and aviation fuel to our Marketing segment and customers.
as polyethylene and polycarbonate. We operate chemical plants
worldwide and have a balance of locations, feedstocks and products. Shell Wholesale Commercial Fuels provides fuels for transport,
industry and heating. These range from reliable main-grade fuels
In addition to our stand-alone, chemicals-only production sites, we to premium products.
are repurposing our refineries into energy and chemicals parks. This
is under way at Norco in the USA, Scotford in Canada, Rotterdam in Pipelines
the Netherlands and Rheinland in Germany. We continue to explore We own and operate eight tank farms across the USA through
options for the former Convent Refinery in Louisiana, USA, which has Shell Pipeline Company LP (Shell interest 100%). It transports around
been shut down. The energy and chemicals parks are expected to 1.5 billion barrels of crude oil, refined products and chemicals a year
focus more on meeting customers' low-carbon and sustainability needs. through around 6,000 kilometres of pipelines in the Gulf of Mexico
and nine US states. Our non-operated ownership interests
In 2023, we supplied more than 11 million tonnes of petrochemicals provide another 13,000 kilometres of pipeline.
to more than 1,000 industrial customers. Products made from chemicals
are used in everyday life, including in medical equipment, construction, We carry more than 40 types of crude oil and more than 20 grades
transport, electronics, agriculture and sports. of fuel and chemicals, including gasoline, diesel, aviation fuel,
chemicals and ethylene.
Products – Refining & Trading
Refining We own, operate, develop and acquire pipelines and other midstream
We have interests in eight refineries worldwide, with a capacity to
and logistics assets. Our assets include interests in entities that own
process a total of 1.6 million barrels of crude oil a day. The distribution
crude oil and refined products pipelines and terminals that serve as
of our refining capacity is 60% in Europe, 26% in the Americas and
key infrastructure to:
14% in Asia.
￮ transport onshore and offshore crude oil production to US Gulf
Coast and Midwest refining markets; and
￮ deliver refined products from those markets to major demand
centres.

Our assets also include interests in entities that own natural gas and
refinery gas pipelines that transport offshore natural gas to market hubs
and deliver refinery gas from refineries and plants to chemical sites
along the US Gulf Coast.

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Oil Sands Crude distillation capacity [A]

Synthetic crude oil is produced by mining bitumen-saturated sands,
extracting the bitumen and transporting it to a processing facility where Thousand b/stream day [B]
hydrogen is added to make a wide range of feedstocks for refineries. 2023 2022 2021
The Athabasca Oil Sands Project (AOSP) in Alberta, Canada, includes
Europe 975 990 1,023
the Albian Sands mining and extraction operations, the Scotford
upgrader and the Quest CCS project. Asia 237 237 307
Africa — 23 90
We have a 50% interest in 1745844 Alberta Ltd. (formerly known Americas 435 449 729
as Marathon Oil Canada Corporation), which holds a 20% interest Total 1,646 1,698 2,149
in the Athabasca Oil Sands Project.
[A] Average operating capacity for the year, excluding mothballed capacity.
[B] Stream day capacity is the maximum capacity with no allowance for downtime.
Chemicals and Products data tables
The tables below reflect Shell subsidiaries and instances where Shell
owns the crude oil or feedstocks processed by a refinery. Other joint Crude oil processed [A]
ventures and associates are only included where explicitly stated.
Thousand b/d
2023 2022 2021
Refining & Trading sales volumes [A][B]
Europe 732 715 761
Thousand b/d Asia 168 184 223
2023 2022 2021 Africa — 16 57
Europe 809 830 426 Americas 322 353 455
Asia 324 377 870 Total 1,222 1,268 1,496
Africa 27 39 47
[A] Includes natural gas liquids, share of joint ventures and associates and processing
Americas 410 454 683 for others.

Total 1,570 1,700 2,026

Refinery processing intake [A]
Gasolines 293 410 551
Kerosenes 124 117 123 Thousand b/d
Gas/Diesel oils 642 616 735 2023 2022 2021
Fuel oil 232 270 337 Crude oil 1,222 1,267 1,496
Other products [C] 279 287 280 Feedstocks 127 135 143
Total 1,570 1,700 2,026 Total 1,349 1,402 1,639

[A] Excludes deliveries to other companies under reciprocal sale and purchase arrangements, Europe 764 763 806
that are in the nature of exchanges. Sales of condensate are included.
Asia 171 184 225
[B] Certain contracts are held for trading purposes and reported net rather than gross.
The effect in 2023 was a reduction in refining and trading sales of around 1,202 thousand Africa — 16 57
b/d (2022: 1,197 thousand b/d; 2021: 1,127 thousand b/d).
[C] Includes LPG sales volumes of 70 thousand b/d (2022: 67 thousand b/d; 2021: Americas 414 439 551
81 thousand b/d).
Total 1,349 1,402 1,639

Cost of crude oil processed or consumed [A] [A] Includes crude oil, natural gas liquids and feedstocks processed in crude distillation units
and in secondary conversion units.
$/barrel
2023 2022 2021 Refinery processing outturn [A]
Total 71.13 84.39 60.51 Thousand b/d
[A] Includes Upstream and Integrated Gas margins on crude oil supplied by Shell subsidiaries, 2023 2022 2021
joint ventures and associates.
Gasolines 489 477 624
Kerosenes 168 166 141
Gas/Diesel oils 516 512 611
Fuel oil 88 90 108
Other 149 193 258
Total 1,410 1,438 1,742

[A] Excludes own use and products acquired for blending purposes.

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Manufacturing plants at December 31, 2023

Refineries

Thousand barrels/stream day, 100% capacity [B]

Thermal
Crude cracking/
Shell interest distillation visbreaking/ Catalytic Hydro-
Location Asset class (%) [A] capacity coking cracking cracking
Europe
Germany Miro [C] 32 313 40 96 —
Rheinland g n 100 339 32 — 87
Schwedt [C] [E] 38 234 46 57 —
Netherlands Pernis g n 100 447 — 53 104
Asia
Singapore Pulau Bukom g n 100 237 — — 61
Africa
South Africa Durban [C] [D] 36 180 25 37 —
Americas
Argentina Buenos Aires [F] n c 44 112 14 22 —
Canada
Alberta Scotford g 100 100 — — 83
Ontario Sarnia c 100 85 5 21 10
USA
Louisiana Norco g 100 250 29 119 44

[A] Shell interest is rounded to the nearest whole percentage point; Shell share of production capacity may differ.
[B] Stream day capacity is the maximum capacity with no allowance for downtime.
[C] Not operated by Shell.
[D] Refinery operations were paused from Q2 2022.
[E] Refinery has been classified as Held for Sale.
[F] Owned through Raízen joint venture.

g Integrated refinery and chemical complex

n Refinery complex with cogeneration capacity
c Refinery complex with chemical unit(s)

Chemicals data tables

The tables below reflect Shell subsidiaries and instances where Shell owns the crude oil or feedstocks processed by a refinery. Other joint ventures
and associates are only included where explicitly stated.

Ethylene capacity [A]

Thousand tonnes/year
2023 2022 2021
Europe 1,710 1,710 1,726
Asia 2,542 2,542 2,542
Americas [B] 3,821 3,821 2,321
Total 8,073 8,073 6,589

[A] Includes the Shell share of capacity entitlement (offtake rights) of joint ventures and associates, which may be different from nominal equity interest. Nominal capacity is quoted
at December 31, 2023.
[B] Includes data pertaining to Shell Polymers Monaca which commenced operations in November 2022. The facility was not fully functional during 2023 due to operational and start-up
challenges. The facility ramped up to full operation in the first quarter of 2024.

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Wind and hydrogen for decarbonisation in Rotterdam

We are aiming for more value with less emissions by working to In June 2023, Hollandse Kust Noord, which lies 18.5 kilometres
integrate our assets and projects. Take our investment in Holland off the west coast of the Netherlands, produced its first electricity.
Hydrogen 1 (HH1), for example. HH1 will be one of Europe's largest Hollandse Kust Noord has been operational since December 2023
renewable hydrogen facilities when it is operational in the middle with an installed capacity of 759 MW, generating at least 3.3 TWh
of the decade. per year. CrossWind is exploring the use of innovative technologies,
including artificial intelligence (AI), to help ensure a continuous
Construction of the 200 MW electrolyser facility HH1 began at the supply of electricity, even when there is no wind.
end of 2022. HH1 is designed to produce up to 80,000 kilograms
of renewable hydrogen per day and will be powered by the HH1 is energy transition being put into action where we are
Hollandse Kust Noord wind farm, operated by the CrossWind leveraging our expertise across the value chain to produce
joint venture (Shell interest 79.9%) with Eneco. HH1 will supply renewable hydrogen which will be used to decarbonise our
hydrogen to the Shell Energy and Chemicals Park Rotterdam, own energy products and, when the hydrogen market develops,
which will use it to partially decarbonise its production of petrol, potentially supply other customers.
diesel and jet fuel.

Photo: Final installation of the Hollandse Kust Noord wind park, located 18.5 kilometres off the coast of Egmond aan Zee. The wind farm was built by CrossWind, a joint venture between
Shell and Eneco.

Chemicals sales volumes [A]

Thousand tonnes/year
2023 2022 2021
Europe
Base chemicals 1,741 2,809 3,883
Intermediates and other chemicals products 1,848 1,955 2,076
Total 3,589 4,764 5,959
Asia
Base chemicals 1,190 825 1,354
Intermediates and other chemicals products 1,917 2,147 2,656
Total 3,107 2,972 4,010
Americas
Base chemicals 1,508 2,125 1,984
Intermediates and other chemicals products 3,041 2,420 2,263
Total 4,549 4,545 4,247
Total product sales
Base chemicals 4,439 5,759 7,221
Intermediates and other chemicals products 6,806 6,522 6,995
Total 11,245 12,281 14,216

[A] Excludes feedstock trading and by-products.

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Major chemical plants [A]

Thousand tonnes/year, Shell share capacity [B]

Styrene Ethylene Higher olefins Additional
Location Ethylene Polyethylene monomer glycol [C] products
Europe
Germany Rheinland 324 — — — — A
Netherlands Moerdijk 971 — 815 153 — A, I
UK Mossmorran [D] 415 — — — — O
Asia
China Nanhai [D] 1,100 605 645 415 — A, I
Singapore Jurong Island [E] 281 40 1,069 924 — A, I, P, O
Pulau Bukom 1,161 — — — — A
Americas
Canada Scotford — — 475 462 — A, I
USA Monaca [F] 1,500 1,600 — — —
Deer Park 889 — — — — A, I
Geismar — — — 400 1,390 I
Norco 1,432 — — — — A
Total 8,073 2,245 3,004 2,354 1,390

[A] Major chemical plants are large integrated chemical facilities, typically producing a range of chemical products from an array of feedstocks.
[B] Shell share of capacity of subsidiaries, joint arrangements and associates (Shell- and non-Shell-operated), excluding capacity of the Infineum additives joint ventures.
[C] Higher olefins are linear alpha and internal olefins (products range from C4 to C2024).
[D] Not operated by Shell.
[E] The polypropylene and olefins production mentioned refers to Shell share of capacity of our non-operated joint ventures Petchem Corporation of Singapore (PCS) and The Polyolefin
Company (TPC) which are on Jurong Island.
[F] Shell Polymers Monaca commenced its operations in November 2022. The facility was not fully functional during 2023 due to operational and start-up challenges. The facility ramped up to
full operation in the first quarter of 2024.

A Aromatics, lower olefins

I Intermediates
P Polypropylene
O Other

Other chemical locations [A]

Location Products
Europe
Germany Karlsruhe A
Schwedt A
Netherlands Rotterdam A, I, O
Americas
Argentina Buenos Aires I
Canada Sarnia A, I

[A] Other chemical locations reflect locations with smaller chemical units, typically serving more local markets.

A Aromatics, lower olefins

I Intermediates
O Other

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Renewables
and Energy
Solutions
Renewables and Energy Solutions (R&ES)
includes renewable power generation, the
marketing and trading and optimisation of
power and pipeline gas, as well as carbon
credits and digitally enabled customer
solutions. R&ES also includes hydrogen
production and marketing, development of
commercial carbon capture and storage (CCS)
hubs, investment in nature-based projects that
avoid or reduce carbon emissions (NBS), and
Shell Ventures, which invests in companies
working to accelerate the energy and mobility
transformation. We are building a business
to profitably deliver clean energy for our
customers, using a strong portfolio of
energy solutions to help them decarbonise.

Segment earnings ($ billion)

3.0 2022: (1.1)

Adjusted Earnings ($ billion)

0.7 2022: 1.7

Cash flow from operating activities ($ billion)

3.0 2022: (6.4)

External power sales (terawatt hours)

279 2022: 243

Sales of pipeline gas to end-use customers

(terawatt hours)

738 2022: 843

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Key metrics

$ million, except where indicated

2023 2022 2021
Segment earnings*[A] [B] 3,038 (1,059) (1,514)
Identified items 2,333 (2,805) (1,272)
Adjusted Earnings*[A] 705 1,745 (243)
Adjusted EBITDA*[A] 1,413 2,459 (21)
Cash flow from operating activities 2,984 (6,394) 451
Cash capital expenditure* 2,681 3,469 2,359
External power sales (terawatt hours) [C] 279 243 247
Sales of pipeline gas to end-use customers (terawatt hours) [D] 738 843 899

[A] Segment earnings, Adjusted Earnings and Adjusted EBITDA are presented on a current cost of supplies basis.
[B] See Note 7 to the "Consolidated Financial Statements".
[C] Physical power sales to third parties; excluding financial trades and physical trade with brokers, investors, financial institutions, trading platforms, and wholesale traders.
[D] Physical natural gas sales to third parties; excluding financial trades and physical trade with brokers, investors, financial institutions, trading platforms, and wholesale traders. Excluding sales
of natural gas by other segments and LNG sales.

Business conditions Cash flow from operating activities

For the business conditions relevant to Renewables and Energy Cash flow from operating activities was primarily driven by working
Solutions, see "Market overview" on pages 38-40. capital inflows of $3,723 million and Adjusted EBITDA. This was partly
offset by net cash outflows, related to derivatives of $1,988 million and
External power sales tax payments of $762 million.
In 2023, our external power sales increased compared with 2022
as a result of organic customer growth across the portfolio and Cash capital expenditure
portfolio additions. Within cash capital expenditure, $2.3 billion was in low-carbon energy
solutions. This includes Renewable Power Generation, Environmental
Sales of pipeline gas to end-use customers Solutions, Hydrogen and CCS. In 2022, cash capital expenditure
In 2023, the decrease in our sales of pipeline gas to end-use customers included $2.9 billion in low-carbon energy solutions. Higher cash
was mainly driven by commercial decisions to reduce our supply to capital expenditure in 2022 was mainly a result of the acquisition
certain counterparties. of the renewable energy platform Sprng Energy group.

Earnings 2023-2022 [A] See "Our journey to net zero" on page 95.
Segment earnings reflected lower margins (decrease of $684 million),
mainly from trading and optimisation. This was because of lower gas
and power price volatility in 2023, unfavourable tax movements Our cash capital expenditure is expected to be in the range
(decrease of $218 million) and higher operating expenses, resulting of $4-5 billion in 2024.
from business growth (increase of $186 million).
Portfolio and business development
Segment earnings also included favourable movements of $2,756 million, Key portfolio and business developments:
due to the fair value accounting of commodity derivatives, partly offset by ￮ In March 2023, we entered into a joint venture with Eku Energy
net impairment charges and reversals of $669 million. These favourable (Shell interest 45%) to deliver a utility-scale battery energy storage
movements and charges are part of identified items and compare with system in Australia.
2022 which included unfavourable movements of $2,443 million due ￮ In June 2023, Hollandse Kust Noord, our offshore wind park in the
to the fair value accounting of commodity derivatives, and impairment Netherlands (Shell interest 79.9%), delivered its first megawatt hours
charges of $361 million. of electricity.
￮ In November 2023, we sold our home energy businesses in the UK
In 2023, Adjusted Earnings from Energy Marketing and Trading and and Germany to Octopus Energy Group.
Optimisation accounted for 216% of Renewables and Energy Solutions
Adjusted Earnings. This was partially offset by Renewable Power Business and property
Generation, Hydrogen, CCS, NBS and Shell Ventures that accounted We are building a business to profitably deliver clean energy for our
for a negative 116%. customers.

Prior year earnings summary [A] Energy Marketing

Our earnings summary for the financial year ended December 31, We provide electricity and smart energy solutions to residential,
2022, compared with the financial year ended December 31, 2021, commercial and industrial customers. We do this through direct
can be found in the Annual Report and Accounts (page 74) and Form electricity sales, storage solutions and energy optimisation services.
20-F (page 78) for the year ended December 31, 2022, as filed with Our largest markets for commercial and industrial customers are
the Registrar of Companies for England and Wales and the US Australia and the USA. In Australia, we are one of the largest
Securities and Exchange Commission, respectively. commercial and industrial retailers of electricity in the market.
[A] All earnings amounts are shown post-tax, unless stated otherwise. 2022-2021 reported
pre-tax segment figures. We entered into a joint venture with Eku Energy to deliver a utility-scale
battery energy storage system in Australia. With this system, Shell will
* Non-GAAP measure (see page 365).
have access to 100% of the battery system's offtake over a 20-year
period. Completion of the project is expected in late 2024.

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In November 2023, we divested our retail businesses in the UK and Hydrogen

Germany to Octopus Energy, and we are winding down the business in Hydrogen can help to decarbonise hard-to-abate sectors, such as
the Netherlands. We continue to sell natural gas and power to retail heavy industry and heavy-duty transport, as well as decarbonise our
customers in the USA and Australia. own assets. We are part of joint ventures and alliances that have built
electrolysers and hydrogen filling stations. We have also participated
Trading and Optimisation in feasibility studies that aim to show the viability of a global import
We trade and optimise power and pipeline gas, and carbon credits and export market for hydrogen. We aim to develop opportunities
from our own assets and from third parties. We work in partnership where we see adjacencies with our integrated business and pathways
with Shell businesses across the regions to offer energy solutions that to attractive returns.
can help our customers decarbonise. We have a gas and power
trading presence in key markets, including North America and Europe. Since 2021, we have operated an electrolyser (Shell interest 100%) in
Germany, which produces hydrogen using electricity from renewable
Renewable Power Generation sources. In July 2022, we announced the final investment decision to
We enable renewable power generation by owning and operating build Holland Hydrogen 1 to produce renewable hydrogen.
wind farms and solar plants, and participating in joint ventures. We
target selective growth in markets where there is integration potential. Carbon capture and storage
CCS is a combination of technologies that capture and store CO2 deep
In the USA, Shell's Brazos Wind Farm achieved its first power following underground, preventing its release into the atmosphere. R&ES offers
the dismantling and refurbishing of existing wind turbines and the CCS services to our customers. We report existing CCS operations that
commissioning of new ones. In December 2023, we strategically sold help decarbonise our own assets in the segment where the relevant
60% of our interest in Brazos to InfraRed Capital Partners to release asset sits.
capital for investment in other renewables projects. Shell will retain
100% of the power offtake. We have a 33.3% interest in the Northern Lights Joint Venture, where
the other partners are Equinor and TotalEnergies (equal partners). The
In June 2023, the Hollandse Kust Noord offshore wind development project is in Norway and is under construction. Phase One is expected
within the CrossWind joint venture (Shell interest 79.9%) reached a to be ready for start-up in 2025. In 2023, the Northern Lights CCS joint
significant milestone by producing its first megawatts of renewable venture signed agreements with both Yara International and Ørsted for
electricity. The electricity from this wind farm is planned to supply the the transport and permanent storage of CO2, marking an important
200 MW electrolyser Holland Hydrogen 1 (Shell interest 100%) in the step in helping to create a commercial market for CCS in Europe.
Netherlands as it comes on line.
Nature and Environmental Solutions
At the end of 2023, our share of renewable power generation capacity Nature and Environmental Solutions include our NBS business and the
was 2.5 GW in operation and 4.1 GW in development. Our renewable Environmental Products Trading Business (EPTB). NBS invests in projects
power capacities are listed below: that conserve, enhance and restore ecosystems – such as forests,
grasslands and wetlands – to prevent GHG emissions or reduce
Renewable power generation capacity in operation and atmospheric CO2 levels.
in development as of December 31, 2023 - by region
Through EPTB we develop, source offtake, trade and supply
In operation [A] In development [B] environmental products across compliance and voluntary markets.
100% Shell 100% Shell This includes working with our other businesses such as Integrated Gas
capacity interest capacity interest or Marketing to provide integrated energy solutions to customers.
Location (MW) (MW) (MW) (MW)
Asia 2,285 1,936 1,636 1,354 Shell Ventures
Europe 1,128 537 1,722 1,263 Shell Ventures are corporate venture funds where we act as an investor
and a partner to start-ups and businesses to accelerate the energy and
Americas 103 51 2,182 1,318
mobility transformation. We invest in companies that work on solutions
Australia — 0 120 120 to lower emissions, electrify energy systems, gain data-based insights
Total 3,516 2,525 5,660 4,055 and provide innovative consumer solutions.

Investments
Renewable power generation capacity in operation Within R&ES, we maintain an integrated business model, with
and in development as of December 31, 2023 trading and optimisation, to help us manage our value delivery. Our
investments are subject to financial modelling and stress-testing, due
2023 2022 2021
diligence and risk assessments to ensure that our capital is allocated
Renewable power generation capacity to the most attractive low-carbon projects and opportunities. We
(Shell interest - gigawatts):
monitor and evaluate the performance of our acquisitions against our
In operation [A] 2.5 2.2 0.7 expectations. Some acquired companies in new business sectors are
In development [B] 4.1 4.2 2.3 not yet in full compliance with our Binding Corporate Rules. Following
assessments of each new acquisition, specific actions are put in place
[A] Renewable generation capacity post commercial operation date.
[B] Renewable generation capacity under construction and/or committed for sale under to achieve compliance with our Binding Corporate Rules.
long-term offtake agreements (PPA).

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Brazos windfarm
Shell's upgraded Brazos Wind Farm produced its first power in
2023. This was achieved after we decommissioned and restored a
legacy wind farm at the end of its useful life and "repowered" it by

upgrade and
building newer, more efficient turbines on the same acreage of land.

Brazos is expected to generate 182 megawatts, which will be

first power
put into the Texas electricity grid. From there, it is used for both
residential and commercial needs. The energy that Brazos
generates is enough to power more than 50,000 households.
We are recycling the decommissioned turbine blades to be
used as a component in concrete.

In December, we sold 60% of our interest in Brazos to InfraRed

Capital Partners, releasing capital for investment in other
renewables projects. Shell will retain 100% of the power offtake.
The Brazos wind farm in Texas, USA is an example of an investment
which is bringing more green electricity to the grid today. It is also
a demonstration of capital discipline in our power investments
where during development or upon achieving operations, we may
choose to sell a share of the project to a third party to release
capital to be used in the next renewable generation project.
This allows us to make further investments in the energy transition,
as we transform to a net-zero emissions energy business by 2050.

Harnessing wind power is a vital part of the energy transition and

there has been unprecedented global growth over the past 12
months. At COP28, countries agreed to triple capacity by 2030.

Photo: Brazos wind farm is located in Fluvanna, Texas, 112 kilometres (70 miles) south-east of Lubbock, on the Caprock of the Llano Estacado.

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Corporate
Corporate covers the non-operating
activities supporting Shell. It comprises
Shell's holdings and treasury organisation,
self-insurance activities, headquarters
and central functions.

Segment earnings ($ billion)

(2.8) 2022: (2.5)

Adjusted Earnings ($ billion)

(2.7) 2022: (2.4)

Cash flow from operating activities ($ billion)

(0.8) 2022: 2.2

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Key metrics

$ million
2023 2022 2021
Segment earnings*[A] [B] (2,811) (2,461) (2,606)
Identified items (69) (90) 81
Adjusted Earnings*[A] (2,742) (2,371) (2,686)
Adjusted EBITDA*[A] (987) (725) (554)
Cash flow from operating activities (832) 2,192 1,154

[A] Segment earnings, Adjusted Earnings, and Adjusted EBITDA are presented on a current cost of supplies basis.
[B] See Note 7 to the "Consolidated Financial Statements".

Overview Earnings 2023-2022

All finance expense, income and related taxes are included An increase in the negative segment earnings was mainly driven
in Corporate segment earnings rather than the business by unfavourable movements in currency exchange rate effects
segment earnings. and tax credits.

The holdings and treasury organisation manages many of the Prior year earnings summary
Corporate entities. It is the point of contact between Shell and Our earnings summary for the financial year ended December 31,
external capital markets, conducting a range of transactions, such as 2022, compared with the financial year ended December 31, 2021,
raising debt instruments and conducting foreign exchange transactions. can be found in the Annual Report and Accounts (page 77) and Form
Treasury centres in London and Singapore support these activities. 20-F (page 81) for the year ended December 31, 2022, as filed with
the Registrar of Companies for England and Wales and the US
Headquarters and central functions provide business support in Securities and Exchange Commission, respectively.
communications, finance, health, human resources, information
technology (IT), legal services, real estate and security. They also Cash flow from operating activities
provide support for shareholder-related activities. The central functions Cash flow from operating activities decreased primarily due to
are supported by business service centres, which process transactions, unfavourable working capital movements.
manage data and produce statutory returns, among other services.
Most headquarters and central-function costs are recovered from Self-insurance
the business segments. Costs that are not recovered are retained We mainly self-insure our hazard risk exposures. We continually assess
in Corporate. the safety performance of our operations and make risk mitigation
recommendations, where relevant, to keep the risk of an accident as
low as possible. Our insurance companies are adequately capitalised
and they may transfer risks to third-party insurers where economical,
effective and relevant.

See "Risk factors" on page 24.

* Non-GAAP measure (see page 365).

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Other central activities aimed at protecting us against cyber threats. Shell has reported
incidents in 2023 to regulatory authorities in several jurisdictions.
None of these had a material impact on Shell, including its business
Information technology and cyber security
strategy, results of operations, or financial condition.
Digitalisation is a key success factor in delivering Shell's Powering
Progress strategy. Shell is transforming its IT systems to support its
The IRM and cyber defence leadership teams involved in monitoring
evolving portfolio of businesses. We invest in new technologies, such
and managing our cyber security threat risk and assurance process
as artificial intelligence and machine learning, to enhance our IT
have an average of around 25 years of experience. This group is
capabilities and bring value to the business.
led by our CISO, who has more than 20 years of experience in the
information technology and information security field, including serving
The growing dependence on IT and data brings risks. A breach of IT
as the chief information officer for various large public companies. Our
systems or loss of data could cause significant harm to Shell in the form
CISO holds qualified technical expert certifications, has completed the
of loss of productivity, loss of intellectual property, regulatory fines or
London School of Economics Executive Development programme and
reputational damage. Sanctions, including regulatory fines, might be
holds an undergraduate degree in management information systems,
imposed on Shell if authorities find Shell in breach of cyber security or
risk management and corporate finance. Our CISO is active in various
data protection regulations. Cyber security is key to managing those
cyber security industry trade groups, having previously held leadership
risks, especially in today's increasingly regulated environment where
positions in the Oil & Gas Cyber Security Network and the Chief
cyber threats are growing.
Information Officers Strategy Exchange.
Shell operates a multi-level defence strategy, underpinned by the Shell
Projects & Technology
Performance Framework. Our advanced cyber defence capabilities
Projects & Technology and the relevant business lines work together
help us prevent, detect, respond to and evolve as cyber security and
to determine the content, scope and budget for developing new
data privacy risks become more complex. We continuously assess and,
technology that supports our activities. The new technology is
where relevant, improve these capabilities to reduce the likelihood of
developed, using a robust maturation process, to systematically de-risk
successful cyber attacks.
technical and commercial risks. This is done while we seek to align our
portfolio with Shell's strategic ambitions and deployment commitments.
Our global integrated Information Risk Management (IRM) and cyber
defence teams are staffed with cyber security professionals that
A significant proportion of Shell's technology contributes to our
monitor, assure and defend our global IT landscape. The combined
emissions reduction targets. We collaborate with leading academic
Global Functions Chief Information Officer and Chief Information
research institutes and universities, and provide start-ups with access
Security Officer (CISO) roles were split as of November 1, 2023.
to mentors and subject matter experts. Shell Ventures invests in
This resulted in a dedicated CISO role within Shell's Information &
and partners with start-ups and small and medium-sized enterprises
Digital Technology (IDT) leadership.
that are in the early stages of developing new technologies.
The Shell GameChanger programme helps companies to mature
Cyber security risk management
early-stage technologies.
Our cyber security capabilities are embedded in our IT systems and
our IT is protected by various detective and protective technologies.
A structured approach to identify, assess and mitigate IT and cyber See "Risk factors" on page 23.
security risks is built into our support processes and aligns with industry
best practices. We continuously track cyber attacks, threat intelligence
Intellectual property
and vulnerabilities in our IT landscape and have an established incident
At Shell, we have a wide-ranging intellectual property (IP) portfolio
management and escalation process in place. The security of IT
which includes patents, trademarks, know-how, trade secrets, and
services, where operated by external IT companies, is managed
copyrights. These legally recognised forms of IP enable companies to
through contractual clauses and additionally through formal supplier
protect aspects of their IP and to derive value from them. For example,
assurance reports for critical IT services. Shell engages an external th
the distinctive Shell pecten, a trademark in use since the early 20
party to perform periodic benchmarking of Shell's approach to cyber
century, and trademarks in which the word Shell appears, help
security risk management in comparison to industry and peers. We
raise the profile of our brand globally.
develop our cyber security capabilities, based on external dynamics,
benchmarking outcomes and assurance results and take a risk-based
We protect and defend our IP around the world. Equally we respect
approach in our investment decisions related to cyber security risk
the valid IP rights of others. Not doing so risks damage to our business
strategy. Shell's first line of defence is formed by a workforce that is
and reputation, negatively impacts our ability or licence to operate,
trained to be cyber security aware. In 2023, our annual safety day
and could result in legal and financial risks as well as the loss of IP
included cyber security awareness raising. Robust governance
rights. At December 31, 2023, we held 8,829 patents, which includes
processes are embedded across Shell to increase cyber awareness,
granted patents and pending patent applications.
monitor key cyber risks, and provide risk assurance. Our IRM practices
and cyber security risks and strategy are regularly discussed by
Shell holds trademarks in countries all around the world, including
and among our CISO, Shell's Information and Digital Technology
some in which we no longer have operations. For example, in 2023,
leadership, the Executive Committee, the Audit and Risk Committee
we renewed our trademark LINEVOL in Syria and paid $370 to the
and the Board of Directors. These discussions involve consideration of
Syrian Arab Republic, Ministry of Finance, and $713 in agent and
changes in the external environment, how Shell is responding to cyber
handling fees. In addition, we renewed one international trademark
security risks and implementation of further remedial actions as
application, which amongst other countries, included the Islamic
appropriate. In 2023, these discussions were supplemented by
Republic of Iran, through the World Intellectual Property Organization
dedicated deep dives into areas such as the emerging risks and
Madrid system, for a fee of $113 for Iran specifically. We ceased
opportunities associated with generative artificial intelligence. Shell
all operations in Syria in 2011 and Iran in 2018 and the renewals of our
employees and contract staff are required to complete mandatory
trademarks are not indicative of any sales of products in either country.
training courses and participate in regular awareness campaigns

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Our journey to net zero

Our journey
to net zero
We aim to be a net-zero
emissions energy
business by 2050 and
work with our customers
and across sectors to
help accelerate the
energy transition.

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Introduction to undertake robust and consistent analyses of the potential financial

impacts of climate change. The TCFD recommends disclosure of
qualitative and quantitative information aligned to its four core
Shell recognises that greenhouse gas (GHG) emissions from the use
elements: governance, strategy, risk management, and metrics
of hydrocarbon-based energy contribute to climate change. The Paris
and targets.
Agreement aims to strengthen the global response to the threat of
climate change by "holding the increase in the global average
We recognise the value that the recommendations bring and,
temperature to well below 2°C above pre-industrial levels and
in accordance with UK Listing Rule 9.8.6R, set out below our
pursuing efforts to limit the temperature increase to 1.5°C above pre-
climate-related financial disclosures consistent with all of the TCFD
industrial levels". Shell supports the more ambitious goal of the Paris
Recommendations and Recommended Disclosures. By this we mean the
Agreement, which is to limit the rise in global average temperature
four recommendations and the 11 recommended disclosures set out in
this century to 1.5°C above pre-industrial levels.
Figure 4 of Section C of the report entitled "Recommendations of the
Task Force on Climate-related Financial Disclosures" published in June
Shell's Powering Progress strategy is designed to generate shareholder
2017 by the TCFD. We also take into account relevant supplemental
value, while meeting our target of becoming a net-zero emissions
guidance including, for example, the TCFD's additional guidance
energy business by 2050.
"Implementing the Recommendations of the Task Force on Climate-
related Financial Disclosures" (also known as the 2021 TCFD
Since 2017, Shell has supported the recommendations of the Task
Annex) published in October 2021 by the TCFD. We continue
Force on Climate-related Financial Disclosures (TCFD). The TCFD
to align and enhance our climate-related disclosures.
framework aims to improve the disclosure of climate-related risks and
opportunities and provide stakeholders with the information they need

TCFD disclosures index

TCFD Pillars TCFD Recommendations Reference

Governance Describe the board's oversight of climate-related See page 85.

risks and opportunities

Describe management's role in assessing and See page 86.

managing climate-related risks and opportunities

Strategy Describe the climate-related risks and opportunities See page 89.
the organisation has identified over the short, medium
and long term

Describe the impact of climate-related risks and See page 93.

opportunities on the organisation's business, strategy,
and financial planning

Describe the resilience of the organisation's strategy, See page 94.

taking into consideration different climate-related
scenarios, including a 2°C or lower scenario

Risk Management Describe the organisation's processes for identifying See page 100.
and assessing climate-related risks

Describe the organisation's processes for managing See page 100.

climate-related risks

Describe how processes for identifying, assessing, See page 101.

and managing climate-related risks are integrated
into the organisation's overall risk management

Metrics and Targets Disclose the metrics used by the organisation to See page 103.
assess climate-related risks and opportunities in line
with its strategy and risk-management process

Disclose Scope 1, Scope 2, and, if appropriate, See page 104.

Scope 3 greenhouse gas (GHG) emissions, and the
related risks

Describe the targets used by the organisation to See page 107.

manage climate-related risks and opportunities and
performance against targets

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Governance

Board
Sustainability Committee Remuneration Committee Audit and Risk Committee

Executive Committee
CEO

Capital Investment Committee Carbon Reporting Committee

We deliver our strategy through our businesses

Strategy

We seek to deliver more value with less emissions through:

portfolio changes: acquisitions of and investments in new, low-carbon projects, growing our world-leading LNG business with lower carbon intensity
decommissioning plants, divesting assets and reducing our production through cutting emissions from oil and gas production, while keeping oil
natural decline production stable
improving the energy efficiency of our operations transforming our businesses to offer more low-carbon solutions,
transforming our remaining integrated refineries into low-carbon energy and chemicals while reducing sales of oil products
parks, which involves decommissioning plants
using more renewable electricity in our operations
developing carbon capture and storage (CCS)
using high-quality carbon credits, if required

Our financial strength and access to capital give us the ability to reshape our portfolio as the energy system transforms

Climate Risk Management

Key Risks Climate risk assessment mandatory standards and manuals

and monitoring integrated project-level risk management
Commercial risk Regulatory risk into Shell’s overall risk management and Board reviews
management processes via: internal audits
Physical risk Societal risk annual assurance letter process

We evaluate our delivery through our Metrics and Targets

Metrics and Targets

Emissions from our own operations (Scope 1 and 2)

Target Target Target

Halving Scope 1 and 2 Eliminating Maintain methane

emissions by 2030 [A] routine flaring emissions intensity below
under operational control from upstream 0.2% and achieve
(2016 baseline) operations by 2025 [B] near-zero methane
emissions by 2030
Net-zero
emissions by 2050 Emissions from the products we sell (Scope 3)

(Scopes 1, 2 and 3)
Target Ambition

Net carbon intensity (NCI) Oil products ambition

Introducing a range of 15-20% for our Reduce customer emissions from the use
target to reduce NCI by 2030 of our oil products by 15-20% by 2030,
(2016 baseline) Scope 3, Category 11 [C]
Updated
(2021 baseline) New

[A] On a net basis.

[B] Subject to completion of the sale of Shell Petroleum Development Company of Nigeria Limited (SPDC).
[C] Customer emissions from the use of our oil products (Scope 3, Category 11) were 517 million tonnes carbon dioxide equivalent (CO2e) in 2023 and 569 million tonnes CO2e in 2021.

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Governance of climate-related The SUSCO met four times in 2023. After each meeting, the SUSCO
Chair provided updates to the Board.
risks and opportunities
See the SUSCO's activities in 2023 on pages 177-178.
Board oversight of climate-related risks and
opportunities
Our governance framework is designed to effectively deliver on the The REMCO develops the remuneration policy for Executive Directors
energy transition ambitions and targets of our Powering Progress and Executive Committee members and sets performance conditions
strategy, which seeks to deliver more value with less emissions. designed to challenge and support the Executive Committee (EC)
to reduce net carbon emissions, while generating shareholder value.
See our "Powering Progress strategy" on pages 6-13. The REMCO met four times during 2023, with climate-related matters
discussed at each meeting.

The Board reviews our energy transition strategy periodically See "Directors' Remuneration Report" on pages 191-193 and the "Annual Report on
and oversees its implementation and delivery. In 2023, the Board Remuneration" on pages 194-210.
considered climate-related matters throughout the year, including
the assessment of climate-related risks and the effectiveness of
corresponding risk management activities. The Board also challenged
and endorsed business plans, including consideration of major capital Climate performance and remuneration
expenditures, acquisitions and divestments. In 2023, the Board Energy transition targets were part of the 2023 annual bonus
convened nine times and continued to oversee the Powering Progress scorecard (15% weighting), applicable to the majority of Shell's
strategy and net-zero initiatives, including at the Board Strategy employees, as well as the 2023 Long-term Incentive Plan (LTIP)
Days in June 2023. awards for senior executives (25% weighting) and the 2023
Performance Share Plan (PSP) awards for other employees
See "Governance framework" on page 160 and "Board activities" on page 162.
(12.5% weighting), both vesting in 2026.

See "Directors' Remuneration Report" on pages 191-193 for further information.

The Board of Directors has the primary oversight of the delivery of

Shell's energy transition strategy and is supported by the Sustainability
Committee (SUSCO) [A], the Remuneration Committee (REMCO) and See the "Governance framework" for the Board's oversight on pages 160-161.
the Audit and Risk Committee (ARC). The importance of our energy
transition strategy means that these committees are informed about
climate-related matters on a frequent basis throughout the year. The ARC provides oversight of the effectiveness of the risk management
See "Climate change governance organogram" below. framework and the integrity of our financial reporting to ensure that our
[A] The SUSCO was previously the Safety, Environment and Sustainability Committee.
financial statements reflect the risks and opportunities associated with
our energy transition strategy and climate change. In 2023, the ARC
The SUSCO assists the Board in fulfilling its responsibilities by reviewing met six times with climate-related matters regularly addressed.
Shell's progress with respect to climate and sustainability elements of
Shell's Powering Progress strategy. See the "Audit and Risk Committee Report" on pages 179-190.

During 2023, the SUSCO refocused its agenda on the areas of

greatest strategic importance to Shell, in line with its updated terms
of reference. This allowed the SUSCO to more effectively oversee
Shell's progress with respect to sustainability.

The SUSCO reviewed the progress made against the non-financial

elements of Shell's Powering Progress strategy, including progress
against the ambitions and targets under the goals of achieving
net-zero emissions, respecting nature and powering lives.

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Management's role in assessing and managing climate-related risks and opportunities

Climate change governance organogram

Shell plc Board

Oversight of climate
change risk management

Sustainability Committee Remuneration Committee Audit and Risk Committee

Non-executive Directors appointed by Non-executive Directors Non-executive Directors appointed
the Board to review the progress of Shell appointed by the Board to set by the Board to oversee the
with respect to sustainability and review the remuneration policy in effectiveness of the system of risk
the non-financial elements of the strategy alignment with strategy management and internal control

Internal Audit
CEO
and Investigation

Integrated Gas and Downstream and Projects and Chief Financial

Upstream Director Renewables Director Technology Director Officer

On January 30, 2023, Shell announced it would reduce the size of its ￮ The Projects & Technology (P&T) Director is responsible for setting
EC with the changes taking effect from July 1, 2023. The new structure emissions, climate and reporting standards that are applicable to all
is designed to focus on performance, discipline and simplification our businesses. The P&T Director is also responsible for developing
across the organisation as we deliver our Powering Progress strategy. new technologies that will help our businesses to deliver on net-zero
emissions reduction targets through both energy efficiency measures
The Chief Executive Officer (CEO) has the delegated authority from the and solutions for decarbonisation.
Board to manage Shell's actions in relation to the Company's strategy. ￮ The Chief Financial Officer (CFO) is responsible for monitoring the
The CEO is assisted on climate-related matters by members of the EC effective application of the Shell Performance Framework, which
to review and implement Shell's energy transition strategy and ensure provides the basis for managing our material risks, including climate-
that such matters are appropriately monitored: related risks and opportunities, and the assurance over our financial
￮ The Integrated Gas and Upstream Director is responsible for information, carbon emissions and climate-related disclosures.
identifying and delivering low-carbon and emission-reduction In addition, the CFO is responsible for Corporate Strategy,
investment opportunities in our oil and gas business, as well as Sustainability and Carbon, including supporting the CEO in
managing and reducing carbon emissions from the business and developing Shell's energy transition strategy and our Carbon
using renewable energy to power our oil and gas extraction Management Framework (CMF).
activities.
￮ The Downstream and Renewables and Energy Solutions Director
is responsible for identifying and delivering climate-related
opportunities, as well as managing and mitigating the climate risks
of our Downstream and Renewables and Energy Solutions business.

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Additional supporting governance

There are two key supporting management committees, with Carbon management framework
representatives from across Shell, which play a critical role in Shell's CMF provides the structure and processes to drive
driving our energy transition strategy: delivery of Group carbon targets. The CMF seeks to manage
￮ The Capital Investment Committee (CIC) facilitates portfolio and reduce emissions in a manner that is similar to how we use
management and capital allocation decisions and reviews each our financial framework. Carbon budgets are used as input to
investment opportunity that is, due to its size or risk profile, subject and guidance for the annual business plan process. They act as
to approval by the CEO or the Board. These reviews ensure that an effective mechanism to maintain absolute emissions below
risk-reward trade-offs, together with other defined criteria including a capped level and help drive a change in product mix. The
climate risks and opportunities, are embedded in investment carbon budgets are allocated to the businesses and enable
decision-making. This committee is made up of senior executives, trade-offs between emitting carbon and generating shareholder
including the CEO, CFO and individual business directors. value to occur within those budgets. The CMF informs portfolio
￮ The Carbon Reporting Committee (CRC) includes senior decisions and supports delivery of our decarbonisation targets.
management representatives focusing on climate-related matters
from across the businesses, P&T climate-related disciplines and For the 2023 operating plan cycle, our net carbon intensity
functions including Finance, Legal and Strategy. The CRC is (NCI) targets were translated into net absolute emissions
responsible at the Group level for the Carbon Control Framework, budgets for each business (see definition on page 88).
the calculation methodologies and reporting of GHG emissions These budgets were used by each business to optimise their
metrics, and the review and approval of external GHG-related operating plans. Performance against the targets embedded
disclosures. It is tasked with ensuring that GHG emissions measures, in the operating plan and the relative mix of products driving
both absolute emissions and carbon intensities, and associated the Group's NCI are monitored and reviewed by the EC on
metrics comply with all regulatory and legal requirements. a quarterly basis, facilitating corrective action if required.

In addition to these committees, our network of country chairs supports Examples of how our decarbonisation targets are taken into
the overall governance, development and deployment of climate- account in fundamental decisions across the organisation are:
related initiatives. They facilitate the setting of each country's plans and ￮ Carbon metrics (profitability per unit of carbon emitted) is
their engagement with external stakeholders in support of our strategy. a key parameter considered in decision-making and when
comparing different growth opportunities against each
Processes by which management is informed about other within the various businesses.
climate-related issues ￮ We translate our carbon targets into carbon budgets for
Several processes are employed across the organisation to ensure each business as input and guidance to the annual business
that management teams can effectively monitor and manage climate- plan process. Businesses need to deliver a plan that
related matters. Our response to the evolving risk outlook requires maximises value within their carbon budgets.
transparency and clarity around our plans and actions to achieve our
climate targets. The management teams are supported by a
combination of carbon-management-related standards and
frameworks, forums at various levels of the organisation, and capability
development programmes. These include our carbon management
framework (CMF), carbon pricing, and the Greenhouse Gas (GHG)
and Energy Management process, policies and controls, which form
part of our Health, Safety, Security, Environment and Social
Performance (HSSE & SP) Control Framework.

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Definition - Scope 1, 2 and 3 emissions

We follow the GHG Protocol's Corporate Accounting
and Reporting Standard, which defines three scopes of
GHG emissions:
￮ Scope 1: direct GHG emissions from sources under Shell's
operational control.
￮ Scope 2: indirect GHG emissions from generation of
purchased energy consumed by Shell assets under
operational control.
￮ Scope 3: other indirect GHG emissions, including emissions
associated with the use of energy products sold by Shell.

Greenhouse gas and energy management

Each Shell entity and Shell-operated venture is responsible
for the development of its GHG emissions and energy
management plans. Plans are in place for all significant assets.

Our Greenhouse Gas and Energy Management process sets

out Shell's requirements for GHG reduction opportunities and
portfolio choices to meet our carbon budgets and achieve
our decarbonisation targets. These requirements allocate
accountabilities for GHG and energy management within
businesses, assets and projects, including responsibility for
analysing our emissions, benchmarking performance, identifying
improvement opportunities, and forecasting future performance.
These requirements are applied to capital project delivery and
Carbon pricing
through the asset-level annual business planning process,
ensuring it is reflected in both opportunity realisation and We consider the potential costs associated with operational
strategic asset management planning. GHG emissions when we assess the resilience of projects. For
each region, we have developed short-, medium- and long-term
A key aspect of the GHG and Energy Management process estimates of future costs of carbon. These are reviewed
is the development of an energy efficiency and greenhouse gas and updated annually. See Note 4 to the "Consolidated
reduction opportunity curve, economically assessed against the Financial Statements" for further details on our regional
current and future costs of carbon. This information provides the cost of carbon estimates.
basis for forecasts of absolute GHG emissions and associated
intensities at the asset and project level. These forecasts are then Up to 2030, costs for carbon emissions estimates are largely
aggregated to inform decisions on potential decarbonisation policy driven through emission trading schemes or taxation
opportunities across our businesses. which is levied by governments and which varies significantly
on a country-by-country basis. Beyond 2030, where policy
A Global Process Council for GHG and Energy Management, predictions are more challenging, the costs for carbon emissions
led by the Global Process Owner for GHG and including are estimated based on the expected costs of abatement
business and functional experts, meets regularly to evaluate technologies required for 2050. The estimated cost is trending
opportunities for the ongoing improvement of processes, tools, towards $125 or $170 per tonne (RT23), depending on the
communications, and capabilities needed within the businesses country, in 2050. Shell’s mid-price outlook of $125 - $170 per
to achieve our decarbonisation aspirations. tonne used for the operating plan sits within the middle tranche
of the abatement costs range of $100 - $200 which
The requirements of our GHG & Energy Management Process incorporates a broad range of technologies.
are integrated into our annual business planning cycle.
See "The resilience of Shell's strategy" on page 94 for more information
on how carbon costs impact our resilience to climate-related risks, including
sensitivity analysis.

See the "Shell Climate and Energy Transition Lobbying Report 2023" which will
be published in April 2024 for more information on Shell's advocacy across a range
of issues including carbon pricing.

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Energy transition strategy Our strategy aims to support the more ambitious
goal of the Paris Agreement
Powering Progress is our strategy to generate more value with less
Tackling climate change is an urgent challenge. It requires
emissions for the benefit of our shareholders, customers and wider
a fundamental transformation of the global economy and the
society as we work to become a net-zero emissions energy business
energy system so that society stops adding to the total amount
by 2050. Our purpose -- to provide more and cleaner energy solutions
of greenhouse gases in the atmosphere, achieving what is
– drives our strategy.
known as net-zero emissions. That is why Shell has set a target
to become a net-zero emissions energy business by 2050.
Our strategy supports a balanced energy transition by responsibly
delivering the oil and gas people need today, while helping to build
The Paris Agreement aims to strengthen the global response
the energy system of the future. As we implement our strategy, we are
to the threat of climate change by "holding the increase in
becoming a multi-energy business offering our customers more and
the global average temperature to well below 2°C above pre-
cleaner energy solutions. Our energy transition plans cover all our
industrial levels and pursuing efforts to limit the temperature
businesses. They aim to reduce emissions from our operations, and help
increase to 1.5°C above pre-industrial levels". Shell supports the
our customers transition to cost-competitive and cleaner energy.
more ambitious goal of the Paris Agreement, which is to limit the
rise in global average temperature this century to 1.5°C above
We are reducing emissions from our operations, and helping our
pre-industrial levels.
customers move to cost-competitive and cleaner energy. Our energy
transition plans cover all our businesses:
To help us get there, we have set short-, medium- and long-term
￮ Integrated Gas - Growing our world-leading LNG business with
targets to reduce the carbon intensity of the energy products
lower carbon intensity.
we sell, measured using our net carbon intensity metric. We
￮ Upstream - Cutting emissions from oil and gas production, while
believe these targets are aligned with a 1.5°C pathway derived
keeping oil production stable.
from scenarios developed for the IPCCs Sixth Assessment
￮ Downstream, Renewables and Energy Solutions – Transforming our
Report (AR6). For more information see "Setting targets for
businesses to offer more low-carbon solutions, while reducing sales
NCI" on page 107.
of oil products.
Becoming a net-zero emissions energy business means reducing
See the "Our strategy" section on pages 7-9. emissions from our operations, and from the fuels and other
energy products, such as electricity, that we sell to our
customers. It also means capturing and storing any remaining
emissions using technology, protecting natural carbon sinks,
and providing high-quality carbon credits to our customers
to compensate for hard-to-abate emissions.

An increasing number of countries and companies have

announced targets to achieve net-zero emissions by the
middle of the century, and we are starting to see some
changes in the demand and supply of energy. However,
achieving the 1.5°C goal will be challenging and requires
unprecedented global collaboration. The pace of change
will also vary around the world.

Climate-related risks and opportunities identified

by Shell over the short, medium and long term
Board holds Strategy Days in We are continually enhancing our approach to assessing and
managing risks and opportunities resulting from climate change.
Canada and visits LNG project This includes considering different time horizons and their relevance to
risk identification and business planning. We actively monitor societal
In June 2023, the Board held its Strategy Days in Canada, developments, such as regulation-driven carbon pricing mechanisms
where members discussed the key elements of Shell's energy and customer-driven preferences for products. We incorporate these
transition strategy with the Executive Committee. Board into potential scenarios which provide insights into how the energy
members also visited LNG Canada (Shell interest 40%, non- transition may unfold in the medium and long term. These insights and
operated), which is being built on the west coast of Canada. those from various other external scenarios (such as those prepared
They met with employees, customers, suppliers and other key for the IPCC AR6) guide how we set our strategic direction, capital
stakeholders, including leaders of the Haisla Nation in the allocation and carbon emission reduction targets.
nearby community of Kitimat, British Columbia.
The process for identifying and assessing climate-related risks and
LNG Canada is expected to start production in the middle of this opportunities is set out in the "Climate Risk Management" section. Shell
decade. It is designed to have the lowest carbon intensity of any has identified climate change and the associated energy transition as
large liquefaction facility currently operating anywhere in the a material risk based on societal concerns and developments related
world ― about 60% lower than the average facility today and to climate change and managing GHG emissions. The risks could
35% lower than the best-performing facility. potentially result in changes to the demand for our products, supply
chains and markets; further changes to the regulatory environment in
Photo: Viewing the LNG Canada plant construction progress from the south end of which we operate, and increased litigation (see Note 31 to the
liquefaction train 1.
Consolidated Financial Statements "Legal proceedings and other
contingencies" on page 313). The risks are composed of a combination

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of complex and interrelated elements that affect Shell's overall business In addition, we are working to effectively adapt our assets and
value chain, and our asset, product and business portfolio. The risk activities to enhance our resilience to the physical risks related
landscape is evolving rapidly. To achieve our emissions reduction to climate change where needed.
targets, active holistic management of all climate-related risk
components is important. The composite risk is broken down See page 92 for more details of Physical risks.
into the following sub-components:
￮ commercial risk;
￮ regulatory risk; We are also working with governments on their climate policies to help
￮ societal risk (including litigation risk); and establish regulatory frameworks that will enable society to reach the
￮ physical risk. goals of the Paris Agreement.

Overall, we mitigate climate-related risks through our Powering We signed up to the Oil and Gas Decarbonisation Charter announced
Progress strategy to deliver more value with less emissions. With our at COP28, within which organisations have pledged to achieve near-
focus on performance, discipline and simplification, we believe that zero methane emissions by 2030 and zero routine flaring by no later
we are in a better position to achieve both our financial targets and than 2030. We also intend to contribute to the World Bank's Global
climate-related targets and ambitions. This approach includes: Flaring and Methane Reduction Fund, which was launched at COP28.
￮ reducing the GHG emissions from our operations (Scope 1 and 2)
by improving our energy efficiency, deploying renewable electricity, As a leading global energy business, Shell seeks to identify
managing flaring and reducing methane emissions from our assets opportunities in the energy transition. These risks and opportunities
and projects; are described below. Climate-related risks are also summarised in
￮ growing our world-leading liquefied natural gas (LNG) business, the "Risk factors" section of the Strategic Report on page 15.
while decarbonising our LNG portfolio in two main ways: by
growing our portfolio with a lower carbon intensity, and by focusing Time horizons: short, medium and long
on reducing emissions of methane; Due to the inherent uncertainty and pervasive risks across our strategy
￮ managing our Upstream portfolio to support a balanced energy and business model, we monitor climate-related risks and opportunities
transition by cutting emissions from oil and gas production, while across multiple time horizons.
keeping oil production stable. Oil production is increasingly from ￮ Short term (up to three years): we develop detailed financial
our deep-water business which, through innovation, produces projections and use them to manage performance and expectations
higher-margin and lower-carbon barrels; and on a three-year cycle. These projections incorporate decarbonisation
￮ transforming our businesses in Downstream and Renewables and measures required to meet our short-term targets.
Energy Solutions to offer more low-carbon solutions while reducing ￮ Medium term (generally three to 10 years): these are embedded
sales of oil products. within our operating plan, with our continued focus on the customer,
the investments and portfolio shifts required in the medium term that
will reshape Shell's portfolio.
￮ Long term (generally beyond 10 years): it is expected that our
portfolio and product mix will look very different.

Transition risks

Climate-related commercial risk

￮ The transition to a low-carbon economy may lead to lower sales volumes and/or margins due to a Relevant time horizon:
general reduction or elimination of demand for oil and gas products, possibly resulting in underutilised medium and long
or stranded oil and gas assets, and a failure to secure new opportunities.
￮ Changing preferences of investors and financial institutions could reduce access to and increase the
cost of capital.
Potential material impacts on the organisation

Lower demand and margins for oil and Changing preferences of investors and Remaining in step with the pace and
gas products financial institutions extent of the energy transition
Changing customer sentiment towards renewable Financial institutions are increasingly aligning The energy transition provides us with significant
and sustainable energy products may reduce their portfolios to a low-carbon and net-zero world, opportunities, as described in "Transition
demand for our oil and gas products. An excess of driven by both regulatory and broader stakeholder opportunities" below. If we fail to stay in step with
supply over demand could reduce fossil fuel prices. pressures. A failure to decarbonise the business the pace and extent of change or customers' and
This could be a factor contributing to additional portfolios in line with investor and lender other stakeholders' demand for low-carbon products,
provisions for our assets and result in lower expectations could have a material adverse effect this could adversely affect our reputation and future
earnings, cancelled projects and potential on our ability to use financing for certain types earnings. If we move much faster than society, we
impairment of certain assets. of projects. This could also adversely affect our risk investing in technologies, markets or low-carbon
partners' ability to finance their portion of costs, products that are unsuccessful. Therefore we cannot
either through equity or debt. transition too quickly or we will be trying to sell
products that customers do not want. This could also
Sensitivity analysis of a 1% shift in Shell's weighted have a material adverse effect on financial results.
average cost of capital on asset carrying values is
presented in the section "Carbon pricing and Technology and innovation are essential to our efforts
discount rate sensitivities" on page 96. to help meet the world's energy demands competitively.
If we are unable to develop the right technology and
products in a timely and cost-effective manner, or if we
develop technologies, products and solutions that harm
the environment or people's health, there could be an
adverse effect on our future earnings.

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Transition risks continued

Climate-related regulatory risk

The transition to a low-carbon economy will likely increase the cost of compliance for our assets and/or Relevant time horizon:
products, and may include restrictions on the use of hydrocarbons. The lack of net-zero-aligned global short, medium and long
and national policies and frameworks increases the uncertainty around this risk.
Potential material impacts on the organisation

Increased compliance costs Restrictions on use of hydrocarbons Lack of net-zero-aligned global and
Some governments have introduced carbon pricing As of June 2023, more than 90% of the national policies and frameworks
mechanisms, which we believe can be an effective global economy was signed up to net-zero The lack of net-zero-aligned global and national
way to reduce GHG emissions across the economy commitments, according to the Net Zero Stocktake policies and frameworks increases the uncertainty
at the lowest overall cost to society. 2023 report from Net Zero Tracker. This brings an around how carbon pricing and other regulatory
increasing risk that governments may set future mechanisms will be implemented in the future. This
Shell's cost of compliance with the EU Emissions regulatory frameworks that further restrict makes it harder to determine the appropriate
Trading Scheme (ETS) and related schemes was exploration and production of hydrocarbons, and assumptions to be taken into account in our financial
around $493 million in 2023, as recognised in introduce controls to limit the use of such products. planning and investment decision processes.
Shell's Consolidated Statement of Income for 2023. Failure to replace proved reserves could result in an
A further $3,133 million of costs were incurred in accelerated decrease of future production, which
respect of biofuels ($2,581 million) and renewable could have a material adverse effect on our
power ($552 million) programmes (see Note 5 to earnings, cash flows and financial condition.
the "Consolidated Financial Statements" on
pages 270-271).
Shell's annual carbon cost exposure is expected to
increase over the next decade because of evolving
carbon regulations. The forecast annual cost exposure is
estimated to be around $1 billion in 2024 and around
$4 billion in 2033. This estimate is based on a forecast
of Shell's equity share of emissions from operated and
non-operated assets, and real-term carbon cost estimates
using the mid-price scenario (see Note 4 to the
"Consolidated Financial Statements" on pages 259-269
for more information). This exposure also takes into
account the estimated impact of free allowances as
relevant to assets based on their location.

Climate-related societal risk (including litigation risk)

As societal expectations develop around climate change, there is a potential impact on Shell's licence Relevant time horizon:
to operate, reputation, brand and competitive position. This is likely to include litigation. short, medium and long
Potential material impacts on the organisation

Decline in reputation and brand Deteriorating relationships with Litigation continued

Societal expectations of businesses are increasing, key stakeholders In some countries, governments, regulators,
with a focus on business ethics, quality of products, Failure to decarbonise Shell's value chain in organisations and individuals have filed lawsuits of
contribution to society, safety and minimising line with societal, governmental and investor a wide variety, including seeking to hold oil and gas
damage to the environment. There is an increasing expectations is a material risk to Shell's reputation companies liable for costs associated with climate
focus on the role of the oil and gas sector in the as a responsible and market-leading energy change, or seeking court-ordered reductions in
context of climate change and the energy company. The impact of this risk includes emissions, challenging the regulatory approvals and
transition. This could negatively affect our brand, shareholder divestment, greater regulatory operating licences, or challenging energy transition
reputation and licence to operate, which could limit scrutiny and potential asset closure resulting strategies and plans. While we believe these lawsuits
our ability to deliver our strategy, reduce consumer from public interest groups' protests. to be without merit, losing could have a material
demand for our branded and non-branded adverse effect on our earnings, cash flows and
products, harm our ability to secure new resources Litigation financial condition.
and contracts, and restrict our ability to access There is an increasing risk to oil and gas companies
capital markets or attract staff. from public, private and governmental lawsuits. For example, in May 2021, the District Court in The
Such action may have wide-ranging consequences, Hague, the Netherlands, ruled that by end 2030,
including forcing entities to hand over strategic Shell must reduce its aggregate net Scope 1, 2 and 3
autonomy in part to regulators, divest from emissions by 45%, compared with 2019 levels. The
hydrocarbon technologies, denial of regulatory Scope 1 component is a results-based obligation
approvals and/or paying fines/penalties or large and the Scope 2 and 3 components are a significant
compensation packages to the plaintiff. best-efforts obligation.
We have appealed the ruling but continue to
implement our Powering Progress strategy to become
a net-zero emissions energy business by 2050,
regardless of the outcome of the appeal.

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Physical risks

Climate-related physical risk

The potential physical effects of climate change may impact Shell's assets, operations, supply chains, Relevant time horizon:
employees and markets. short, medium and long
Potential material impacts on the organisation

Types of physical risk Shell's 2023 assessment Shell's 2023 assessment continued
Mitigation of physical risks, whether or not related In 2023 we carried out a detailed review to Additionally, the impact of physical climate change
to climate change, is considered and embedded assess the impact of a range of changing climatic on our operations is unlikely to be limited to the
in the design and construction of our projects, conditions including changes in temperature, boundaries of our assets. The overall impact,
and/or operation of our assets to minimise the precipitation, wind and sea levels across segments including how supply chains, resource availability
risk of adverse incidents to our employees and and geographies for our significant assets. We used and markets may be affected, also needs to be
contractors, the communities where we operate, IPCC climate modelling data covering three future considered for a holistic assessment of this risk.
and our equipment. climate scenarios (RCP2.6, RCP4.5 and RCP8.5 [A]) Our assets manage this risk as part of broad risk
across the time horizons 2025, 2030 and 2050. and threat management processes as required
The potential impact of physical changes comes by our HSSE & SP Control Framework, part of
from both acute and chronic physical risks. Acute In the short to medium term, the risks were found the wider Shell Performance Framework.
risks, such as flooding and droughts, wildfires and to be related to factors that Shell is already aware
more severe tropical storms, and chronic risks, such of (whether or not related to climate change) and
as rising temperatures and rising sea levels, could the assets are actively managing to mitigate, e.g.
potentially impact some of our facilities, operations hurricane impacts in the US Gulf Coast, rising air
and supply chains. The frequency of these hazards temperatures in the Middle East and water scarcity
and impacts is expected to increase in certain high- in Europe and Asia. As an example, in recent years
risk locations. Extreme weather events, whether the Rhine river in Europe has seen historic lows
or not related to climate change, could have during the summer months leading to challenges in
a negative impact on our earnings, cash flows the use of barges for transportation of our products.
and financial condition. Dredging of harbours and investment in shallower-
draft barges have helped to mitigate the risk.
In the long term, the results of the exercise indicated
that while we have evaluated against current known
risk factors and our current asset portfolio, the
frequency and severity of the identified risk factors
may increase by 2050. The level of predictability
is such that the need for investment in climate
adaptation measures at the assets is not immediate
and the results mean we are in a position to monitor
the assets and determine whether there is any need
for adaptation action, e.g. the impact of potential
water scarcity on various assets.
We tested over 70% of the carrying value of our
physical assets as at December 31, 2022, to assess
the potential impact of climate-related changes on
our significant assets. 13% (based on the carrying
value) of physical assets tested are considered to be
exposed to climate-related physical risks in the short
to medium term which the assets are already actively
managing to mitigate. In addition, we reviewed
significant acquisitions made in 2023 of which none
are considered to be exposed to climate-related
physical risks in the short to medium term.
Our plan reflects the impact of mitigating actions in
the short to medium term. We will continue to monitor
and assess the future exposure of our assets in the
longer term to changing climatic conditions to
establish the need for any further adaptation
actions and related metrics.

[A] Representative Concentration Pathway (RCP) refers to the greenhouse gas concentration (not emissions) trajectory adopted by the IPCC. The pathways describe different climate change
scenarios, all of which are considered possible depending on the amount of GHG emitted in the years to come.

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Transition opportunities

Climate-related opportunities

The transition to a low-carbon economy also brings significant opportunities for us to benefit from changing Relevant time horizon:
customer demands, given our position as a leading global energy provider. short, medium and long
Potential material impacts on the organisation

As the global energy mix changes, our current infrastructure, know-how and global footprint put us in an ideal position to service the changing energy demands
of the market. Our research and development (R&D) activities are key to achieving our net-zero emissions target.

As we work to deliver more value with less emissions we 3. Biofuels 4. Downstream, Renewables and
are focusing on: Developing biofuels production is a key theme Energy Solutions
of our energy transition strategy. We are This encompasses our biofuels, charging for
1. Natural gas developing biofuels such as sustainable aviation electric vehicles, renewable power, hydrogen
Demand for liquefied natural gas (LNG) is expected to fuel, biodiesel and renewable natural gas (RNG) and fuels of the future businesses as well
continue to grow. As one of the world's largest suppliers of to help our customers decarbonise without having as developing our carbon capture and
LNG, with around 40 million tonnes of equity capacity, we to change their cars, trucks, planes or ships. storage business.
can ship natural gas to where it is needed. LNG is critical to
the energy transition and plays an important role in enabling Shell and the non-operated joint venture Raízen In March 2023, we entered into a joint venture
countries to replace coal-fired power generation with a less (Shell interest 44%) are together one of the with Eku Energy (Shell interest 45%) to deliver
carbon-intensive alternative, and provides grid stability world's largest blenders and distributors of a utility-scale battery energy storage system
alongside wind and solar power in electricity generation. biofuels. Shell plans to continue to invest in and in Australia. We have access to 100% of the
Shell seeks to provide more affordable, reliable and cleaner increase the production of these low-carbon fuels. battery system's offtake over a 20-year period.
energy to our customers. Our low-carbon fuels projects and operations Completion of the project is expected in
around the world form part of a wider late 2024.
In October 2023, we and our partners in the Oman commitment to provide a range of energy choices
LNG LLC (Oman LNG) venture signed an amended for customers. For example, we believe that In June 2023, Hollandse Kust Noord, our
shareholders' agreement for Oman LNG, extending the sustainable aviation fuels (SAF) provide the most offshore wind park in the Netherlands (Shell
business beyond 2024. We will remain the largest private effective way of reducing emissions within the interest 79.9%), delivered its first megawatts
shareholder in Oman LNG, with a 30% interest. aviation sector, with wider adoption of SAF of renewable electricity.
2. Continuing the transformation of our enabling us to provide more low-carbon fuels In 2023, Shell's spending on CCS opportunities
remaining integrated refineries into energy to our customers. Biofuels may also present (operating expenses and cash capital
and chemicals parks opportunities in the shipping, road freight and expenditure) amounted to around $340 million,
other sectors. Together with our customers, we an increase of 55% from the $220 million in
An important aim of our Powering Progress strategy is are working on changing energy demand and 2022. Shell's equity share of captured and
to continue to transform selected integrated refineries developing ways to help increase the use of low- stored CO2 was around 0.5 million tonnes
into energy and chemicals parks, which includes carbon fuels and decrease carbon emissions in 2023 (0.4 million tonnes in 2022).
repurposing units to deliver more lower-carbon, from this sector.
high-value, sustainable products.
Shell completed the acquisition of Nature
We are continuing to transform our refining business as Energy in February 2023, one of the largest
part of our drive to create more value with less emissions. producers of RNG in Europe. This acquisition
In early 2024, we announced our investment decision to supports Shell's ambitions to build an integrated
convert the hydrocracker at our Energy and Chemicals Park RNG value chain at global scale and to
Rheinland in Germany into a unit that will produce premium profitably grow its low-carbon offerings
base oils, used to make high-quality lubricants, such as to customers across multiple sectors.
engine and transmission oils. The hydrocracker at the
Wesseling site near Cologne will stop processing crude oil In 2023, we announced a multi-year agreement
into petrol, diesel and jet fuel diesel by 2025. The planned to buy sustainable aviation fuel from Montana
changes are expected to reduce Shell's Scope 1 and 2 Renewables, the largest SAF producer in North
carbon emissions by around 620,000 tonnes a year. America, and to work together on building
blending and distribution capabilities to deliver
SAF to customers. We also signed an agreement
to supply SAF to Emirates airlines at Dubai
International Airport, the first time that SAF
has been used in the airport's fuelling system.

Impact of climate-related risks and opportunities on Scenarios are not intended to be predictions of likely future events or
Shell's businesses, strategy and financial planning outcomes and, therefore, are not the basis for Shell's operating plans
The transformation of the energy system to net-zero emissions will and financial statements.
require simultaneous action in three areas:
￮ an unprecedented improvement in the efficiency with which energy We have been developing scenarios within Shell for almost 50 years,
is used; helping Shell leaders to explore ways forward and make better
￮ a sharp reduction in the carbon intensity of the energy mix; and decisions. Shell Scenarios are designed to stretch management's
￮ the mitigation of residual emissions using technology and thinking when it comes to considering events that may be remotely
natural sinks. possible. Scenarios help management make choices in times
of uncertainty and transition as we grapple with tough energy and
While it is difficult to predict the exact combination of actions that will environmental issues. They are aligned to different energy transition
deliver the net-zero goal, scenarios help us to consider the variables pathways and help in decision-making by guiding the identification
and the potential direction and pace of the transition needed. of risks and opportunities.

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Different socio-economic and technological parameters are used of scenario parameters above). The low-, medium- and high-pricing
to construct these scenarios, such as: outlooks are prepared by a team of experts, reviewed by the EC and
￮ sectoral and regional energy demand; approved by the CEO and CFO. The mid-pricing outlook represents
￮ future trajectory of oil consumption and demand for natural gas; management's reasonable best estimate and is the basis for Shell's
￮ renewable electricity demand and the pace of the electrification financial statements, operating plans and impairment testing.
of the global energy system;
￮ supply of solar and wind energy; Shell's operating plan reflects Shell's energy transition strategy. We will
￮ pace of uptake of electric vehicles; continue to update our business plan, price outlooks and assumptions
￮ demand for biofuels; as we move towards net-zero emissions by 2050.
￮ growth of the hydrogen economy;
￮ level of carbon capture and storage (CCS); As described in "Climate-related risks and opportunities identified by
￮ deployment of lower-carbon energy technologies; and Shell over the short, medium and long term", the low-pricing outlooks
￮ global trade of oil and gas. could result in increased commercial, regulatory and societal risks,
as well as transition opportunities. How these risks are prioritised is
Management consideration of different climate change outcomes described in "Shell's processes for identifying and assessing climate-
informs a range of areas, including but not limited to the setting of the related risks". Given our target to become a net-zero emissions energy
long-term strategy, business planning, and investment and divestment business by 2050, the use of low-pricing outlooks is part of our
decisions. The outcomes considered by management vary in relation resilience testing and resulting actions.
to the extent and pace of the energy transition.

Impact on strategic planning Our strategy and national net-zero commitments

The application of scenario analysis informs our assessment of the In accordance with UK Listing Rule 9.8.6FG, we have
impact of a wide range of risks and opportunities, including climate- considered the extent to which country-level net-zero
change-related issues, on our strategy and business planning at the commitments have been considered in developing our
Group and business levels. At the Group level, the potential impacts of transition plan.
the energy transition on our business model are discussed and assessed
by the Board and the Executive Committee as part of the annual Our Powering Progress strategy aims to deliver a net-zero
strategic and business planning cycle. This assessment allows us to emissions energy business by 2050. The pace of the energy
challenge accepted ways of thinking, identify material risks and transition will be heavily influenced by government policy,
opportunities, and identify key tensions and trade-offs. creating a strong country and regional dimension in seeking
to deliver the aims of the Paris Agreement. Our commitment
is a global one and, as such, we look to deliver our strategy
Key financial and non-financial components through a global lens.
of business planning
The Board approves our annual business plan. The plan We seek to translate our energy transition strategy into specific
contains operational and financial metrics, and its objective targets and plans at a business segment level, ensuring we take
is to drive the delivery of our Powering Progress strategy. capital deployment and portfolio decisions in the context of the
globally integrated nature of our operations. However, we
Decarbonisation targets are key to our business planning continue to recognise the importance of engagement and
process. Each business owner offers viable Scope 1, 2 and 3 collaboration in delivering the fundamental changes to the
reduction opportunities as part of this process, in line with the energy system that are required. This includes supporting and
CMF (see page 87). advocating for policies that aim to reduce carbon emissions
and working with governments and other stakeholders in the
The business plan is underpinned by assumptions about internal development of policy that supports the transition to a low-
and external parameters and includes: carbon energy system. As national transition plans develop,
￮ commodity prices; consideration will be given to the impact on our operations and
￮ refining margins; the associated implications for our energy transition strategy.
￮ production levels and product demand;
￮ exchange rates;
￮ future carbon costs; Resilience of Shell's strategy to different
￮ the schedules of capital investment programmes; and climate-related scenarios
￮ risks and opportunities that may have material impacts Shell's financial strength and access to capital give us the
on free cash flow. ability to reshape our portfolio as the energy system transforms.
They also allow us to withstand volatility in oil and gas markets.
These assumptions are developed with input from our scenarios
and internal estimates and outlooks. The level of uncertainty As we work towards net-zero emissions, we continue to exercise focus
around these assumptions increases over longer time horizons. and discipline to optimise our capital allocation, balancing energy
security and demand, as well as internal and external transition
considerations and opportunities. We will make clear, disciplined
Impact on business and financial planning choices about where we can create the most value for our investors
There is no single scenario that underpins Shell's business and and customers through the energy transition.
financial planning. Scenarios are not intended to be predictions of
likely future events or outcomes and, therefore, are not the basis for See Note 7 to the Consolidated Financial Statements "Segment information" on pages
Shell's operating plans and financial statements. Our scenarios help 272-277 for more information.
in developing our future oil and gas pricing outlooks. The oil and
gas pricing outlooks take account of factors relating to the energy
transition, such as potential changes in supply and demand (see details

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Cash capital expenditure evolution by segment Cash capital expenditure by segment for 2024 is expected to be
approximately $8 billion for Upstream, $5 billion for Integrated Gas,
f 1% 1% 2% $3 billion for Marketing, $3-4 billion for Chemicals and Products,
e 12% 14% 11%
and $4-5 billion for Renewables and Energy Solutions.
15% 13%
d 26%
23%
Investing in the energy transition
20%
c 12%

b 17% 17% Total cash capital expenditure*of $24.4 billion in 2023

18%

33% 34%
Non-energy Low-carbon
a 31%
products [A] energy solutions [B]
2021 2022 2023 $2.3 billion $5.6 billion
a Upstream b Integrated Gas c Marketing
d Chemicals & e Renewables f Corporate
Products & Energy Solutions LNG, gas and power Oil, oil products
marketing and trading [C] and other [D]

Operational expenditure evolution by segment

$4.0 billion $12.5 billion

f 1% 1% 1% [A] Products for which usage does not cause Scope 3, Category 11 emissions: Lubricants,
e 8% 9% 10% Chemicals, Convenience Retailing, Agriculture & Forestry, Construction & Road.
[B] E-Mobility and Electric Vehicle Charging Services, Low-Carbon Fuels, Renewable Power
d 29% Generation, Environmental Solutions, Hydrogen, CCS. We define low-carbon energy
29% 29% products as those that have an average carbon intensity that is lower than conventional
hydrocarbon products, assessed on a life-cycle basis.
c [C] LNG Production & Trading, Gas & Power Trading, and Energy Marketing.
21% 21% [D] Upstream segment, GTL, Refining & Trading, Marketing fuel and hydrocarbon sales,
23%
b Shell Ventures, Corporate segment.
12% 13%
12%
Movements in cash capital expenditure in 2023 versus 2022 were
a 27% 25%
29% driven by:
￮ Non-energy products: 41% lower in 2023 than in 2022 due to the
2021 2022 2023
completion of Shell Polymers Monaca in 2022 and greater inorganic
a Upstream b Integrated Gas c Marketing expansion in Lubricants and Convenience Retailing in 2022.
d Chemicals & e Renewables f Corporate ￮ Low-carbon energy solutions: increased by 30% mainly due to the
Products & Energy Solutions
acquisition of Nature Energy (nearly $2 billion) and the roll-out of
electric vehicle charging.
￮ LNG, gas and power marketing and trading: comparable year
on year.
￮ Oil, oil products and other: remained at a similar level to 2022.

Energy transition: Total cash capital expenditure* by segment

$ billion
Classification Segment 2023 2022

Non-energy products [A] Marketing 0.9 1.5

2.3 3.9
Chemicals and Products 1.4 2.4

Low-carbon energy solutions [B] Marketing 3.3 1.4

5.6 4.3
Renewables & Energy Solutions 2.3 2.9

LNG, gas and power Integrated Gas 3.7 3.8

marketing and trading [C] 4.0 4.2
Renewables & Energy Solutions 0.3 0.4

Oil, oil products and other [D] Integrated Gas 0.5 0.5
Upstream 8.3 8.1
Marketing 1.4 2.0
12.5 12.5
Chemicals and Products 1.8 1.4
Renewables & Energy Solutions 0.1 0.2
Corporate 0.4 0.3
Total 24.4 24.4 24.8 24.8

[A] Products for which usage does not cause Scope 3, Category 11 emissions: Lubricants, Chemicals, Convenience Retailing, Agriculture & Forestry, Construction & Road.
[B] E-Mobility and Electric Vehicle Charging Services, Low-Carbon Fuels, Renewable Power Generation, Environmental Solutions, Hydrogen, CCS. We define low-carbon energy products as
those that have an average carbon intensity that is lower than conventional hydrocarbon products, assessed on a life-cycle basis.
[C] LNG Production & Trading, Gas & Power Trading, and Energy Marketing.
[D] Upstream segment, GTL, Refining & Trading, Marketing fuel and hydrocarbon sales, Shell Ventures, Corporate segment.
* Non-GAAP measure (see page 365).

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Key aspects of Shell's financial resilience in the context of climate- Applying this priceline to Integrated Gas assets of $72 billion and
related impacts are assessed and described in more detail in Note 4 Upstream assets of $84 billion as at December 31, 2023, shows
to the "Consolidated Financial Statements". This describes how Shell recoverable amounts that are $8-10 billion and $1-3 billion lower,
has considered climate-related impacts in key areas of the financial respectively, than the carrying amounts as at December 31, 2023.
statements and how this translates into the valuation of assets and
measurement of liabilities. Shell's financial statements are based on 3. A 1.5 degree scenario, derived from IEA NZE50: This priceline
reasonable and supportable assumptions that represent management's applies the IEA normative Net Zero Emissions scenario over the
best estimate of the range of economic conditions that may exist in whole period under review and reflects the sensitivity to a pure
the foreseeable future. net-zero emissions scenario from the IEA.

Sensitivity analysis using external, and often normative, climate Applying this priceline to Integrated Gas assets of $72 billion and
scenarios has been performed for the period covering asset life cycles. Upstream assets of $84 billion as at December 31, 2023, shows
If these different price outlooks were used, this would impact the recoverable amounts that are $15-20 billion and $3-5 billion lower,
recoverability of certain assets recognised in the "Consolidated respectively, than the carrying amounts as at December 31, 2023.
Balance Sheet" as at December 31, 2023.
In addition, further sensitivities are provided of -10% or +10% to Shell's
As there is no single scenario that underpins our plans, sensitivity mid-price outlook, as an average percentage over the full period.
analysis has been conducted using a range of key assumptions to A change of -10% or +10% to the mid-price outlook, as an average
test the resilience of our asset base. This includes sensitivity analysis percentage over the full period, would result in around $5-8 billion
on asset carrying values using commodity price outlooks from external, impairment or some $2-5 billion impairment reversal, respectively,
and often normative, climate change scenarios; shifting trends in our in Integrated Gas and Upstream as at December 31, 2023. Compared
portfolio, particularly exploration and evaluation, Upstream production with the prior year, the higher impact of a 10% decrease in commodity
and refineries; risks related to stranded assets; resilience of investments prices is mainly driven by lower headroom for certain assets between
for transformation of our refining sites into energy and chemicals parks; carrying value and recoverable value at December 31, 2023.
carbon price sensitivities; chemicals and refining margins price
sensitivities; discount rate sensitivities; demand sensitivities; onerous Carbon pricing and discount rate sensitivities
contracts; forecast taxable profits sufficient to recover deferred The risk of stranded assets may increase in a higher-carbon-price
tax assets; dividend resilience; and limited risk on timing of scenario. Sensitivities of our asset carrying values to carbon prices have
decommissioning and restoration activities for Integrated Gas been based on an IEA NZE 2050 scenario to illustrate the resilience
and Upstream. of asset carrying values to higher long-term carbon prices than those
included in the Shell mid-price outlook.
Commodity price sensitivities
Applying the IEA NZE 2050 carbon price scenario to Integrated Gas
Oil and gas prices are one of the key assumptions that underpin Shell's
assets of $72 billion and Upstream assets of $84 billion, up to the end
financial statements, with the mid-price outlook informed by Shell's
of life of these assets, shows recoverable amounts that are $2-4 billion
scenario planning representing management's best estimate. Price
and $1 billion lower, respectively, than the carrying amounts as at
outlooks reflect a broad range of factors, including but not limited
December 31, 2023.
to future supply and demand, and the pace of growth of low-carbon
solutions. The scenarios have been selected to illustrate the resilience of Applying the IEA NZE 2050 carbon price scenario to Chemicals and
the asset base under a range of possible outcomes, including the price Products assets of $44 billion shows recoverable amounts that are
implications arising from the IEA Net Zero Emissions scenario which $3-4 billion lower than the carrying amounts as at December 31, 2023.
provides a potential path for the global energy system to net-zero For Chemicals and Products, increased carbon cost could potentially
emissions by 2050. Sensitivities of asset carrying amounts to prices be recovered partially through increased product sale prices.
are under the assumption that all other factors in the models used
to calculate impacts remain unchanged.
See "Carbon pricing" on page 88 for more information on our carbon price assumptions.

Sensitivity analysis has been performed using price outlooks from:

The discount rate applied for impairment testing is based on a
1. Average prices from three 1.5-2 degrees Celsius external climate nominal post-tax weighted average cost of capital (WACC) and
change scenarios: In view of the broad range of price outlooks is determined at 7.5%, except for power generation in the Renewables
across the various scenarios, the average of three external price and Energy Solutions segment where 6% is applied. The discount rate
outlooks was taken from IHS Markit/ACCS 2023; Woodmac includes systematic risk for energy transition risk. In addition, cash flow
WM AET-1.5 degree; and IEA NZE50. projections applied in individual assets include specific asset risks,
including risk of transition. An increase in systematic climate risk could
Applying these prices to Integrated Gas assets of $72 billion and lead to a higher WACC and consequently to a higher discount rate to
Upstream assets of $84 billion as at December 31, 2023, shows be applied in impairment testing. We have used a 1% shift in discount
recoverable amounts that are $12-16 billion and $3-5 billion lower, rate for sensitivity analysis purposes as an indicator of the resilience of
respectively, than the carrying amounts as at December 31, 2023. our asset base to incremental increases in our cost of capital.

2. Hybrid Shell Plan and IEA NZE50: for this Shell's mid-price outlook is An increase of the WACC of 1% under the assumption that all other
applied for the next 10 years. Because of greater uncertainty, the IEA factors in the models used to calculate recoverability of carrying amounts
normative Net Zero Emissions scenario is applied for the period after remain unchanged would lead to a change in the carrying amount of
10 years. This gives less weight to the price-risk uncertainty in the first $2-4 billion for Integrated Gas and Upstream and up to $1 billion in
10 years reflected in the Operating Plan period and applies more risk Chemicals and Products, and no significant impairment in other segments.
to the more uncertain subsequent periods.
See Note 4 to the Consolidated Financial Statements on pages 259-269 for further
information on climate-related impacts in key areas of the financial statements.

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Delivering our energy transition strategy Our research and development (R&D) activities are also key to
To ensure the resilience of our Powering Progress strategy, our achieving our net-zero emissions target. They are an important way
responses to the risks and opportunities identified are: to address the technology risk as mentioned in the "Transition risk
￮ delivery through our integrated business model; and opportunities" section.
￮ decarbonisation of our energy value chains and operations; and
￮ a demand-driven decarbonisation approach – recognising that In 2023, our R&D expenditure on projects that contributed to
we need to work with our customers to identify low-carbon energy decarbonisation was around $628 million, representing about
solutions for their energy demands in the sectors where we have 49% of our total R&D spend, compared with around 41% in 2022.
competitive advantages. This includes expenditure on reducing GHG emissions:
￮ from our own operations, for example, by improving energy
Our net-zero target includes emissions from our operations, as well efficiency and electrification;
as from the end-use of all the energy products we sell. We will seek ￮ from the fuels and other products we sell to our customers - for
to reduce emissions from our own operations, including the production example, biofuels, synthetic fuels and products made from low-
of oil and gas. More than 90% of the total emissions we include within carbon electricity, and hydrogen produced using renewable sources;
our NCI boundary are indirect emissions associated with third-party ￮ by carbon capture, utilisation and storage applied to hydrogen
products and end-use emissions of energy products we sell, so we production from natural gas and other carbon emissions;
are also working with our customers to support them in transitioning ￮ by researching nature-based solutions to offset emissions; and
to low-carbon products and services. Our integrated approach ￮ for our customers through renewable power generation, storage,
allows us to withstand volatility in oil and gas markets. Our financial e-mobility and other electrification solutions.
framework is based on continued capital discipline, capital flexibility
and a strong balance sheet. Examples of R&D areas other than decarbonisation, include safety,
￮ In Integrated Gas, we are growing our world-leading liquefied performance products such as lubricants and polymers, automation
natural gas (LNG) business. We see continued strong demand for and artificial intelligence.
LNG, especially in Asia, and plan to grow our LNG business by
20-30% by 2030 compared with 2022. LNG provides energy Decarbonising our value chains and operations
security and flexibility because it can be easily transported to places We will seek to base the decarbonisation of our value chains and
where it is needed most. LNG is a critical fuel in the energy transition operations on a deep understanding of the decarbonisation strategies
and plays an important role as a lower-carbon alternative to coal for and plans of our customers and users of our energy products. We are
industry, and provides grid stability alongside wind and solar power focused on decarbonising our own operations by:
in electricity generation. ￮ making portfolio changes such as acquisitions and investments in
￮ In Upstream, we continue to focus on more value and less emissions new, low-carbon projects. We are also decommissioning plants,
and expect that our oil production will remain stable through to divesting assets, and reducing our production through the natural
2030. The oil we are producing will increasingly come from our decline of existing oil and gas fields;
world-class deep-water business. Through innovative designs, our ￮ improving the energy efficiency of our operations;
deep-water platforms are producing higher-margin and lower-carbon ￮ transforming our remaining integrated refineries into low-carbon
barrels. As we work towards net-zero emissions, we will continue to energy and chemicals parks, which involves decommissioning plants;
approach capital and carbon allocation with discipline and focus. ￮ using more renewable electricity to power our operations; and
￮ In Downstream and Renewables and Energy Solutions, we are ￮ developing carbon capture and storage (CCS) for our facilities.
making clear choices and changes to enable this business to thrive
through the energy transition. We are focusing on developing low- If required, we may choose to use high-quality carbon credits to offset
carbon energy and solutions where we have competitive advantages any remaining emissions from our operations, in line with the mitigation
and are starting to see increasing demand. We are focusing on hierarchy of avoid, reduce, and compensate.
value over volume across all our businesses in Downstream and
Renewables and Energy Solutions, while driving both our emissions In October 2021, we set an interim target to achieve a 50% reduction
and our customers' emissions lower. in absolute Scope 1 and 2 emissions under our operational control by
￮ We are repurposing our refining portfolio to focus on four regional 2030 on a net basis, when compared with 2016.
Energy and Chemicals parks, which we are transforming into the
low-carbon hubs of the future producing biofuels and hydrogen. We aim to eliminate routine flaring from our upstream-operated assets
Our energy transition plans for this decade across our Downstream, by 2025 [A] and maintain methane emissions intensity for operated oil
Renewables and Energy Solutions business are focused on: growing and gas assets below 0.2% and achieve near-zero methane emissions
our electric vehicle charging business; expanding our biofuels by 2030.
business; continuing to grow our integrated power positions, and [A] Subject to completion of the sale of SPDC.
developing technologies related to CCS and carbon removals.
See "Working to reduce our absolute Scope 1 and 2 emissions" for more information
See "Outlook" for more information on page 13. on page 108.

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Supporting our customers in achieving net-zero emissions The intended use of the NCI metric is to track progress in reducing
Changes to the supply of energy products and decarbonising the the overall carbon intensity of the energy products sold by Shell. NCI
energy system require structural changes in the end-use of energy. measures emissions associated with each unit of energy we sell,
This requires energy users to improve, update or replace equipment compared to a 2016 baseline. It reflects changes in sales of oil and gas
so that they can use carbon-based energy more efficiently, or switch products, and changes in sales of low- and zero-carbon products -- such
to low- and zero-carbon energy. as biofuels, hydrogen and renewable electricity.

We aim to lead in the energy transition where we have competitive Unlike Scope 1 and 2 emissions, reducing the NCI of the products we
strengths, see strong customer demand, and identify clear regulatory sell requires action by both Shell and our customers, with the support
support from governments. The transport sector is the largest market for of governments and policymakers to create the right conditions
our oil products. We are building on our customer relationships and for change.
expertise to help drive the decarbonisation of passenger cars, heavy-
duty trucks, planes and ships. We want to become a world leader Our focus on where we can add the most value has led to a strategic
in charging for electric vehicles, and remain a world leader in biofuels shift in our power business. We plan to build our integrated power
as they become sustainable aviation fuels or renewable diesel made business, including renewable power, in places such as Australia,
from waste. By transforming our refineries into four regional energy Europe, India and the USA. We have withdrawn from the supply of
and chemicals parks, we are creating the low-carbon production energy directly to homes in Europe because we do not believe that
hubs of the future. is where our strengths lie.

For example, in the transport sector, decarbonisation includes replacing In line with our shift to prioritising value over volume in power, we are
internal combustion engine vehicles with electric vehicles and converting concentrating on select markets and segments. One example is our
heavy-duty transport to biofuels such as sustainable aviation fuel, focus on commercial customers more than retail customers. Given this
renewable diesel, renewable gas and, in the future, hydrogen and its focus on value, we expect growth in total power sales to 2030 will be
derivatives. In the industrial sector, LNG plays an important role as a lower than previously planned. This has led to an update to our NCI
lower-carbon alternative to oil- and coal-fired furnaces, and provides grid target. We are now targeting a 15-20% reduction by 2030 in the NCI
stability alongside wind and solar power in electricity generation. Such of the energy products we sell, compared with 2016, against
structural changes will help to trigger transitions along the supply chain our previous target of a 20% reduction.
of individual sectors and across sectors, including the production of
energy and emissions over time. The IEA estimates that these changes in Acknowledging uncertainty in the pace of change in the energy
the end-use of energy will require substantial investment. Under the IEA transition, we have also chosen to retire our 2035 target of a 45%
Net Zero Emissions by 2050 scenario, for every one US dollar spent reduction in NCI.
on fossil fuels, a further $5.7 need to be spent on clean energy and
a further $5.6 spent on efficiency and end-uses. We have set a new ambition to reduce customer emissions from the use
of our oil products by 15-20% by 2030 compared with 2021 (Scope 3,
We will seek to change the mix of energy products we sell to our Category 11). That is more than 40% compared with 2016 reported
customers as their needs for energy change. Emissions resulting from emissions. [A] This level of ambition is in line with the European Union's
customer use of our energy products make up the largest percentage climate goals in the transport sector, among the most progressive in
of Shell's carbon emissions. We believe we can make the greatest the world.
contribution to the energy transition by helping to enable our customers
to switch to low-carbon energy products and services. This is reflected Achieving this ambition will mean reducing sales of oil products,
in Shell's strategy to develop a portfolio that seeks to: such as petrol and diesel, as we support customers as they move
￮ develop low- and zero-carbon alternatives to traditional fuel, to electric mobility and lower-carbon fuels, including natural gas,
including biofuels, hydrogen, and other low- and zero-carbon gases; LNG and biofuels.
￮ provide more electricity to customers, while also driving a shift to
renewable electricity; Our approach to climate change emphasises the need to work
￮ work with customers across different sectors to help them collaboratively. We aim to make strategic alliances with customers,
decarbonise their use of energy, for example by substituting the other companies and entire sectors so we and they can make
use of coal with LNG; and profitable progress towards net zero. As a founding member of the
￮ address any remaining emissions from conventional fuels with Oil and Gas Climate Initiative (OGCI), we are part of a group of 12
solutions such as CCS and carbon credits. national and international energy companies. The OGCI supports the
climate goals of the UN Paris Agreement and recognises that collective
We have set targets to reduce the net carbon intensity (NCI) of the actions can help drive the energy transition.
energy products we sell by 9-12% by 2024, 9-13% by 2025, 15-20%
[A] Customer emissions from the use of our oil products (Scope 3, Category 11) were
by 2030, and 100% by 2050. 517 million tonnes carbon dioxide equivalent (CO2e) in 2023, 569 million tonnes CO2e
in 2021 and 819 million tonnes CO2e in 2016. Of the 40% reduction by 2030, around
8 percentage points are related to volumes associated with additional contracts being
classified as held for trading purposes, impacting reported volumes from 2020 onwards.

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Energy transition in action - selection of portfolio changes and actions in 2023:

Growing sales of low-carbon products and solutions ￮ We moved forward with our construction of Holland Hydrogen 1
￮ Shell completed the acquisition of Volta Inc. in the USA. (HH1), which will be one of Europe's largest renewable
We now operate one of the largest electric vehicle charging hydrogen plant once operational in 2025. The renewable
networks in the country, with more than 3,000 charge points power for the electrolyser will come from HKN. The renewable
across 31 states. We also acquired evpass, which hydrogen produced will supply the Shell Energy and Chemicals
owns Switzerland's largest network of electric vehicle Park Rotterdam, helping to decarbonise products like petrol,
charging stations. diesel and jet fuel. In the future, renewable hydrogen could also
￮ In China, we opened our largest electric vehicle charging station help cut emissions from commercial road transport.
globally, which has 258 public fast-charging points partially
Reducing emissions from our own operations
powered by the station's solar photovoltaic panels.
￮ In the US Gulf of Mexico, we are the leading operator and
￮ In Germany, we launched Hydrogen Pay-Per-Use, through which
have one of the lowest greenhouse gas intensities in the world
truck operators can hire hydrogen-fuelled trucks to explore
for producing oil, compared with those of other oil and gas
transitioning their fleet from diesel to hydrogen and reduce
producing members of the International Association of Oil &
their carbon emissions.
Gas Producers. Our latest Shell-operated development, Vito
￮ The Hollandse Kust Noord (HKN) wind park, built by
(Shell interest 63.1%), started production in 2023. Vito is a third
CrossWind, a joint venture between Shell and Eneco, became
the size of its original design, which will reduce its emissions by
operational. It will add 759 MW of renewable energy to the
around 80% over its operating life. We are using the same
Dutch electricity grid after final commissioning.
design concept for our Shell-operated Whale (Shell interest
￮ Shell completed the acquisition of Nature Energy, one of the
60%) and Sparta (Shell interest 51%) projects in the US Gulf of
largest producers of RNG in Europe. This acquisition supports
Mexico, which are expected to start production in 2024 and
Shell's ambitions to build an integrated RNG value chain at
2028 respectively. Sparta will also feature all-electric topside
global scale and to profitably grow its low-carbon offerings
compression equipment, significantly reducing greenhouse
to customers across multiple sectors.
gas intensity and emissions from our own operations.
￮ Shell announced a multi-year offtake agreement for sustainable
￮ We delivered first gas from the Timi platform in Malaysia, which
aviation fuel with Montana Renewables, one of the largest
is powered by solar and wind. This unmanned platform is also
sustainable aviation fuel producers in North America.
more cost efficient, since it is around 60% lighter in weight than
￮ Our Northern Lights CCS project (Shell interest 33.3%) in
a conventional tender-assisted drilling wellhead platform that
Norway signed contracts in 2023 to transport and safely store
relies on oil and gas for power.
1.2 million tonnes of CO2 a year. The CO2 will be shipped from
￮ We started to build the Rosmari-Marjoram gas project, which
two of Orsted's biomass power plants in Denmark and a Yara
will be partially powered by 240 solar panels.
ammonia and fertiliser plant in the Netherlands.
￮ We are continuing to transform our refining business as part
￮ Shell and Esso were jointly awarded three carbon storage
of our drive to create more value with less emissions. In early
appraisal licences in the UK's first-ever carbon storage licensing
2024, we announced our investment decision to convert the
round. The joint venture (Shell interest 50%) will evaluate three
hydrocracker at our Energy and Chemicals Park Rheinland in
sites in the North Sea for the potential storage of CO2 captured
Germany into a unit that will produce premium base oils, used
and transported from industrial facilities in the UK.
to make high-quality lubricants, such as engine and transmission
￮ Shell continued to build a high-grade portfolio of carbon credits.
oils. The hydrocracker at the Wesseling site near Cologne will
In the USA, we launched Greenline Climate with the Spatial
stop processing crude oil into petrol, jet fuel and diesel by 2025.
Informatics Group to provide development services for projects
The planned changes are expected to reduce Shell's Scope 1
generating forest carbon credits. We also invested in and
and 2 carbon emissions by around 620,000 tonnes a year.
partnered with carbon project developer Kateri to accelerate
￮ The final investment decision was taken to build Porthos,
advanced grazing management practices to improve rangeland
Europe's largest CCS facility, at the port of Rotterdam, starting
productivity and carbon sequestration.
in 2024. Shell will be the biggest customer, supplying 1 million
tonnes of CO2 a year.

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Climate risk management To support our risk assessments, we seek to establish the level of
risk that we are willing to accept in pursuit of Shell's strategy and
objectives. We consider the amount of resources – such as financial
Shell's processes for identifying and assessing
resources, people, processes, systems and controls – that we are
climate-related risks
willing and able to allocate to manage each risk in pursuit of our
Identifying climate-related risks
objectives and the impact for Shell's overall risk profile.
Shell considers climate change and the energy transition a material risk
factor. We monitor the risks related to these across four components:
The impact and likelihood assessment, combined with risk appetite,
￮ commercial risks;
determines the type of risk responses, such as controls and assurance
￮ regulatory risks;
activities, that may be required to manage each risk.
￮ societal risks (including litigation risk); and
￮ physical risks.
Possible responses include:
￮ accepting the risk without any further action;
These components are monitored and assessed on an integrated
￮ mitigating or reducing the risk with appropriate controls, supported
basis, necessitated by the interdependence of the risks and the related
by assurance activities;
actions. The different components pose different kinds of exposures
￮ transferring the risk, for example to insurance providers where
spanning different time horizons. Similarly, the responses to the
appropriate; and
components of the risk are also planned by taking a holistic view. Our
￮ altogether stopping or forgoing the activity that gives rise to the risk.
integrated approach to risk management and the resulting changes
in our strategy ensure we manage our aggregate climate change risk
In determining our risk responses, we always seek to comply with
within our overall risk appetite over different time horizons.
our Code of Conduct and other boundaries, such as our financial
framework, which set the aggregate level of risk appetite that could
For example, the increasing cost of complying with emission limits
be sustained. The Financial Framework considers boundaries such
in some regions is a regulatory risk that may require operational
as our net debt levels and our credit rating.
responses in the near term. The reduction in demand for legacy
hydrocarbons is a commercial risk that may have a medium- to long-
term impact, demanding changes to our strategic portfolio and
Classifications of risks
business models. The risk of physical impacts of climate change may
We identify and define risks across the spectrum of strategic,
occur in the short, medium and long term and may require actions
operational, and conduct and culture risks. With strategic risks
to mitigate adverse impacts on our assets and supply chain. As an
we consider current and future portfolio issues, examining
example, the transformation of our refineries into energy and chemicals
parameters such as country concentration or exposure to
parks reduces the level of our operational emissions and medium-
higher-risk countries. We also consider long-range
to long-term commercial risks, allowing us to plan for future
developments to test key assumptions or beliefs in relation to
adaptation measures.
energy markets. When assessing operational risks, we consider
material operational exposures across Shell's entire value chain
Shell's processes for identifying and assessing risks are part of the
which provides a more granular assessment of key risks facing
Shell Performance Framework.
the organisation. For conduct and culture risks we consider how
our policies and practices align with our purpose, core values
Our risk management procedures that help us identify climate-related
and desired mindset and behaviours.
risks and opportunities include:
￮ monitoring external developments, including policy changes and
Against the above categories, we assess the four sub-
new regulations;
components of risk related to climate change and the energy
￮ evaluating the status of risk indicators, which illustrate how well
transition – commercial, regulatory, societal (including
we are managing each component of the risk related to climate
litigation) and physical risks. This helps us maintain strategic
change and the energy transition; and
resilience, robust operational risk responses and alignment
￮ learning from incidents and assurance findings.
of our responses with Shell's purpose and core values.
We use these procedures to identify risks and determine their
significance, both individually and relative to other risks.
Shell's processes for managing climate-related risks
On an ongoing basis, our assets leverage broad risk and threat
Assessing climate-related risks
management processes to identify and respond to emerging challenges
For each identified risk, we evaluate its impact, likelihood and the level
to their ongoing safe, compliant and efficient operation, including
of risk we are willing to accept.
climate-related risk, as required by our HSSE & SP Control Framework.
Our risk management processes are carried out at the Group, business,
When assessing the likelihood of a risk occurring, we consider factors
function and asset level, which includes projects.
such as our ability to prevent the risk happening and whether the risk
has materialised in the past.
We apply the Shell Performance Framework to ensure that we
effectively manage our climate-related risks at all these levels.
We consider the financial consequences and how it might affect our
The Framework includes:
reputation, our ability to comply with regulations, and possible damage
￮ mandatory standards and manuals;
to health, safety, our assets and the environment. The impact, and
￮ project-level risk management processes;
hence materiality, of a risk is based on how critical it could be to
￮ management and Board reviews;
our business model. For example, as we operate in multiple countries,
￮ internal audits; and
societal risks are material to our licence to operate.
￮ annual assurance letter process.
The impact and likelihood assessment helps us to prioritise risks and
determine their relative materiality, based on a comprehensive picture
of significant risks to any relevant business objectives.

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Mandatory standards and manuals Management and Board reviews

Our climate change risk management approach is supported by Climate change matters and risks resulting from GHG emissions are
standards and manuals as part of our HSSE & SP Control Framework. reviewed and managed in line with other significant risks through the
They provide guidance on how to monitor, communicate and report Board and EC. Management, the Board and Board committees review
changes in the risk environment. These documents aim to: the risk of climate change and the energy transition to understand and
￮ ensure consistent management and assessment of climate risk assess emerging issues that may impact our strategy or our responses
across Shell; to this risk at an operational level. For example, as part of the annual
￮ clarify expectations for risk management and reporting, planning cycle, the EC and the Board assess how climate change and
including roles and responsibilities of the risk owners; GHG emissions may affect the pace of the energy transition, business
￮ clarify types of assurance activities that may be applicable; emission reduction plans and the implications for Shell's current portfolio.
￮ strengthen decision-making by ensuring that businesses have better
awareness and understanding of climate risks (including their We have established several dedicated internal forums related
likelihood and potential impact) and mitigation plans; and to climate change and the energy transition. These are at different
￮ enable integration of Shell's reporting. levels of the organisation and seek to address, monitor and review
climate change issues.
We periodically review and, if necessary, update our standards and
manuals in light of developments in risks, including those associated In addition, each business and function regularly reviews its risk profile,
with climate change. We are in the process of transitioning to new risk responses and assurance activities throughout the year to ensure
Safety, Environment & Asset Management Standards as part of the climate-related risks are managed effectively. These insights are used
Shell Performance Framework. Our approach continues to evolve as to provide management with updates on the operational management
we increase our understanding of changing policies and the differing of climate change and the energy transition risks. During these updates,
pace of energy transition in different regions. business and functions management review whether our risk responses
are effective in addressing the four sub-components of the climate
Project-level risk management processes change and energy transition risk. These reviews help us to update
At a project level, assessing climate-related risks is an important part Shell's plans and guide our day-to-day operational decisions such
of making initial investment decisions. Projects of a certain size or as maintenance schedules and our risk response plans.
which carry unusual risks are required to follow Shell's Opportunity
Realisation Standard, which sets out the rules for managing and Internal audit process
delivering opportunities in the organisation. Each project is assisted Shell's Internal Audit and Investigations (SIAI) team provides independent
by experts from our global subject matter groups during its and objective assurance and advises management and the Board on the
development, implementation and operation. adequacy and effectiveness of our risk management and internal controls.

Projects under development that are expected to have a material For example, SIAI conducted five audits during 2023 that included the
GHG impact must meet our internal carbon performance standards testing of controls related to GHG emissions measurement, reporting,
or industry benchmarks. An exception process is in place to manage forecasting and abatement projects.
specific incidental cases. Performance standards are under
development for power and hydrogen projects. Our performance Annual assurance letter process
standards are used for measuring a project's average lifetime GHG Each member of the EC must submit an annual assurance letter to the
intensity or energy efficiency per asset type. Projects with a material CEO that their business's or function's activities have been conducted
GHG footprint that meet the performance standards or industry in accordance with the requirements set out in the HSSE & SP Control
benchmarks will often set more ambitious emissions targets for Framework. This assurance includes the assessment of the effectiveness
themselves. GHG abatement plans help determine the nature of these of the internal controls in managing climate- and energy-transition-
targets, and we assess the effects of a project's emissions alongside related risks.
economic and technical design factors. Applying these criteria ensures
that our projects can compete and prosper in the energy transition. Integration of the climate-related risk management
process into Shell's overall risk management
The performance standards are approved by the Executive Vice Our climate-related risk management process follows the approach set
President accountable for implementation in the relevant businesses, out by the Shell Performance Framework, ensuring that it is integrated
and by the Executive Vice President Safety, Environment and into the overall risk management processes of the Group.
Asset Management.
Climate-related risks are considered from a strategic and operational
We assess the future GHG emissions of projects against performance perspective to ensure we maintain a comprehensive view of the
standards and by considering the GHG emissions from the use of the different types of climate risks we face and the different time horizons
products that are to be manufactured. These assessments can lead in which they may affect us. The monitoring and review of risks is a
to projects being stopped or designs being changed. key risk management process in Shell.

We expect the performance standards to evolve as our portfolio The EC, the Board and Board committees review climate-related risks
changes in the energy transition. and their impact on the Group. This allows management to take a
holistic view and optimise risk mitigation responses, to ensure that
climate-related risk responses are properly integrated into the
relevant activities.

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Project-level risk management in action:

Energy and Chemicals Park Rheinland
We are continuing to transform our refining business as part of our The new base oil plant is expected to start operations in the second
drive to create more value with less emissions. Shell announced half of this decade. It will have a production capacity of around
plans in January 2024 to convert the hydrocracker at its Energy 300,000 tonnes a year, equivalent to about 9% of current EU
and Chemicals Park Rheinland in Germany into a unit that will demand and 40% of Germany's demand for base oils.
produce premium base oils, used to make high-quality lubricants,
such as engine and transmission oils. This investment, financed by Shell's Chemicals and Products
business, meets the minimum acceptable internal rate of return
The Wesseling site near Cologne will stop processing crude oil into set out at our Capital Markets Day in 2023. It is the latest key
petrol, diesel and jet fuel by 2025, and the plant will have a high development in the transformation of the Energy and Chemicals
degree of electrification. These changes are expected to reduce Park Rheinland. We are already investing in a 10-megawatt
Shell's Scope 1 and 2 carbon emissions by around 620,000 tonnes electrolyser to produce renewable hydrogen and a biomethane
a year. liquefaction plant.

Photo: Boats sitting at the Shell Energy and Chemicals Park Rheinland, Cologne-Godorf harbour leading to the Rhine.

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Climate-related metrics and targets compared to a 2016 baseline. It reflects changes in sales of oil and gas
products, and changes in sales of low- and zero-carbon products -- such
as biofuels, hydrogen and renewable electricity.
Metrics used by Shell to assess climate-related risks
and opportunities in line with its strategy and risk Unlike Scope 1 and 2 emissions, reducing the NCI of the products we sell
management process requires action by both Shell and our customers, with the support of
This section describes our performance and progress in respect of our governments and policymakers to create the right conditions for change.
climate-related targets, including those reflected in the remuneration
of senior management and employees. Our focus on where we can add the most value has led to a strategic shift
in our power business. We plan to build our integrated power business,
Shell's target is to become a net-zero emissions energy business including renewable power, in places such as Australia, Europe, India and
by 2050. We have set intensity targets and absolute targets the USA. We have withdrawn from the supply of energy directly to homes
and ambitions over the short, medium and long term to track in Europe because we do not believe that is where our strengths lie.
our performance over time (as summarised below). The targets are
forward-looking targets based on management's current expectations In line with our shift to prioritising value over volume in power, we are
and certain material assumptions and, accordingly, involve risks and concentrating on select markets and segments. One example is our
uncertainties that could cause actual results, performance or events to focus on commercial customers more than retail customers. Given this
differ materially from those expressed or implied herein. focus on value, we expect growth in total power sales to 2030 will be
lower than previously planned. This has led to an update to our NCI
We believe our total net absolute emissions peaked in 2018 at target. We are now targeting a 15-20% reduction by 2030 in the NCI
1.73 gigatonnes of carbon dioxide equivalent (GtCO2e). of the energy products we sell, compared with 2016, against
our previous target of a 20% reduction. Acknowledging uncertainty in
In October 2021, in support of our 2050 net-zero emissions target,
the pace of change in the energy transition, we have also chosen to
we set a target to reduce Scope 1 and 2 absolute emissions from assets
retire our 2035 target of a 45% reduction in NCI.
and activities under our operational control (including divestments) by
50% by 2030 compared with the 2016 baseline, on a net basis. We aim We have set a new ambition to reduce customer emissions from the use
to maintain methane emissions intensity for operated oil and gas assets of our oil products by 15-20% by 2030 compared with 2021 (Scope 3,
below 0.2% and achieve near-zero methane emissions by 2030. We aim Category 11) [B]. This level of ambition is in line with the European
to eliminate routine flaring from our upstream-operated assets by 2025 [A]. Union's climate goals in the transport sector, among the most
[A] Subject to completion of the sale of SPDC. progressive in the world.
We have set targets to reduce the net carbon intensity (NCI) of the Achieving this ambition will mean reducing sales of oil products, such
energy products we sell by 9-12% by 2024, 9-13% by 2025, 15-20% as petrol and diesel, as we support customers as they move to electric
by 2030, and 100% by 2050. mobility and lower-carbon fuels, including natural gas, LNG and biofuels.
[B] Customer emissions from the use of our oil products (Scope 3, Category 11) were 517 million
The intended use of the NCI metric is to track progress in reducing tonnes carbon dioxide equivalent (CO2e) in 2023 and 569 million tonnes CO2e in 2021.
the overall carbon intensity of the energy products sold by Shell. NCI
measures emissions associated with each unit of energy we sell, We monitor our progress against these targets and ambitions using
the key metrics described.

Climate-related targets and ambitions summary

Net-zero emissions by 2050 [A], [D]

(Scope 1, 2 and 3)

2023 Actual Performance Metrics, targets and ambitions to 2050

Emissions from our own operations (Scope 1 and 2)

Target Target Target Target Target Target

Scope 1 and 2 Routine Methane Halving Scope 1 Eliminating Maintain methane

emissions [B] flaring emissions [C] and 2 emissions by routine flaring emissions intensity
31% 0.1 million 0.05% 2030 [B] from upstream
operations
below 0.2% and
reduction tonnes hydrocarbons under operational control achieve near-zero
(2016 baseline) by 2025 [E]
vs 2016 flared methane emissions
by 2030 [C]
Emissions from the products we sell (Scope 3)

Target Ambition Target Ambition

Net carbon intensity (NCI) New ambition [F] Net carbon intensity (NCI) Oil products ambition [F]
6.3% First performance metric
to be reported in 2024
Introducing a range of 15-20%
for our target to reduce
Reduce customer emissions from the use
of our oil products by 15-20% by 2030,
reduction
NCI by 2030 (2016 baseline) Scope 3, Category 11 (2021 baseline)
(6-8% target)
New Updated New

[A] We believe our total net absolute emissions peaked in 2018 at around 1.73 gigatonnes of carbon dioxide equivalent (GtCO₂e) per annum.
[B] Operational control boundary. Our 2030 and 2050 targets are on a net basis (i.e. inclusive of any future use of carbon credits).
[C] Covers all oil and gas assets for which Shell is the operator. Measured separately for assets with marketed gas (gas, LNG and GTL available for sale) and assets without marketed gas
(oil and gas assets where gas is reinjected). 2023 actual performance relates to assets with marketed gas.
[D] Our targets for 2050 are based on mitigation activities undertaken by both Shell and our customers.
[E] Subject to completion of the sale of SPDC.
[F] In our energy transition update in March 2024, we have set an ambition to reduce customer emissions from the use of our oil products (Scope 3, Category 11) by 15-20% by 2030, compared with
2021. Customer emissions from the use of our oil products (Scope 3, Category 11) were 517 million tonnes carbon dioxide equivalent (CO2e) in 2023 and 569 million tonnes CO2e in 2021.

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Key metrics we use to track progress against our energy transition Drivers of Scope 1 and 2 emissions
strategy are the NCI of our portfolio and our absolute emissions. Our direct GHG emissions (Scope 1, operational control boundary)
Additional metrics associated with the resilience of Shell's strategy to decreased from 51 million tonnes of carbon dioxide equivalent (CO2e)
climate-related risks and opportunities are included in "Energy transition in 2022 to 50 million tonnes CO2e in 2023, driven by several factors
strategy" from page 89. This includes information on capital allocation including:
between our business segments and the sensitivity of our assets to ￮ divestments in 2022 (e.g. Deer Park and Mobile refinery, Tunisia
carbon pricing, discount rate and commodity price assumptions. Miskar concession, offshore Baram Delta Operations (BDO) PSC
and Block SK307 PSC in the Philippines) and handover of operations
Scope 1, Scope 2 and Scope 3 emissions and related risks in OML 11 in Nigeria in 2022;
In assessing progress against our target to be a net-zero emissions ￮ unplanned downtime (e.g. Deer Park Chemicals);
energy business by 2050, we report our performance against our ￮ reduced flaring from assets including Shell Nigeria Exploration
Scope 1 and 2, and Scope 3 emissions. and Production Company (SNEPCo);
￮ reduction activities (see examples in the list of energy efficiency
See "Climate-related risks and opportunities identified by Shell over the short, medium and
projects on page 115) and purchase of renewable electricity.
long term" on pages 90-93.
These decreases were partly offset by Shell Polymers Monaca having
more units online in 2023 and higher emissions from Pearl and Prelude
with increased production.
Shell's absolute emissions in 2023
In 2023, our total combined Scope 1 and 2 absolute GHG emissions Total routine flaring [A]
(from assets and activities under our operational control) were 57 million
tonnes on a carbon dioxide equivalent basis (CO2e), a 2% reduction
compared with 2022, and a 31% reduction compared with 2016, the Million tonnes
base year for our target. Scope 3 emissions associated with our energy 2023 2022 2021 2016
product sales were 1,147 million tonnes CO2e.
Total hydrocarbons flared in routine flaring 0.1 0.1 0.2 1.1

Absolute emissions [D, E, F, G] [A] Routine flaring of gas occurs during normal oil production if it is not possible to use the gas
or reinject it into the well.

million tonnes of CO2e

Total routine flaring from our upstream oil and gas assets remained
Scope Reporting boundary 2023 2022 2021 2016 relatively stable in 2023 compared with 2022 at 0.1 million tonnes,
Scope 1 [A] operational control 50 51 60 72 having reduced from 1.1 million tonnes in 2016.
Scope 2 [B] operational control 7 7 8 11
Around 50% of total routine and non-routine flaring in our Integrated
Scope 3 [C] equity 1,147 1,174 1,299 1,545
Gas and Upstream facilities in 2023 occurred in assets operated by
[A] Total direct (Scope 1) GHG emissions from assets and activities under our operational the Shell Petroleum Development Company of Nigeria Limited (SPDC)
control. It includes emissions from production of energy and non-energy products. and SNEPCo.
[B] Total indirect GHG emissions from imported energy (Scope 2) from assets and activities
under our operational control using the market-based method. It includes imported energy
used for production of energy and non-energy products. On January 16, 2024, Shell reached an agreement to sell SPDC to
[C] Indirect GHG emissions (Scope 3, Categories 1, 3, 9 and 11) based on the energy product
sales included in NCI using equity boundary. There was a decrease in reported volumes
Renaissance, a consortium of five companies, subject to approvals by
associated with additional contracts being classified as held for trading purposes with the Federal Government of Nigeria and other conditions. SPDC will
effect from January 2020. We estimate that netting of oil products sales volumes resulted continue to operate the SPDC joint venture (SPDC JV [A]) on behalf
in a reduction in GHG emissions of around 73 million tonnes CO2e in 2021 compared
with 2016. of all the joint-venture partners, who together will continue to make
[D] Emissions are reported gross without the inclusion of carbon credits. decisions relating to work programmes for the SPDC JV's assets
[E] Oil and gas industry guidelines from IPIECA indicate that several sources of uncertainty can
contribute to the overall uncertainty of a corporate emissions inventory. We have estimated
and infrastructure. This includes work programmes to eliminate
the overall uncertainty for our direct GHG emissions (Scope 1) to be around 4% and for our routine flaring.
energy indirect GHG emissions (Scope 2) to be around 8% for the market-based method [A] The SPDC JV comprises SPDC Ltd (30%), the government-owned NNPC (55%), Total
and 7% for the location-based method for 2023. IPIECA also notes that due to the diversity Exploration and Production Nigeria Ltd (10%) and Nigeria Agip Oil Company Ltd (5%).
of Scope 3 emissions, sources and the fact that these emissions occur outside the company's
boundaries, the emissions estimates may be less accurate or may have a high uncertainty.
[F] Figures disclosed are rounded. Rounding differences can occur between the total
combined Scope 1 and 2 absolute GHG emissions disclosed in this Report and the sum
of its components individually rounded to the nearest million tonnes.
[G] Acquisitions and divestments have been included in the actual performance tracking with
the target unchanged. Note that acquisitions and divestments could have a material
impact on meeting the targets.

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Methane emissions and methane emissions intensity We believe our methane emissions are quantified according to industry
best practice. Methane emissions include those from unintentional
2023 2022 2021 2016
leaks, venting and incomplete combustion, for example in flares
Methane emissions intensity - and turbines.
assets with marketed gas [A] % 0.05% 0.05% 0.06% 0.10%
Methane emissions intensity - Scope 1 & 2 – performance [A, B]
assets without marketed gas [B] % 0.001% 0.01% 0.01% 0.03% million tonnes carbon dioxide equivalent (CO₂e)
Methane emissions [C] thousand
tonnes 41 40 55 138 83
d 1
[A] Methane emissions intensity from all oil and gas assets for which Shell is the operator that c 16 68
market their gas (incl. LNG and GTL assets), defined as the total volume of methane 1
emissions in normal cubic metre (Nm3) per total volume of gas available for sale in Nm3. 58 57
[B] Methane emissions intensity from all oil and gas assets for which Shell is the operator that b 20 17 1 1
do not market their gas (e.g. where gas is reinjected) defined as the total mass of methane 16 17
emissions in tonnes per total mass of oil and condensate available for sale in tonnes. 12
[C] Total methane emissions for all assets under Shell operational control including Integrated 9 8
Gas and Upstream and Downstream and Renewables and Energy Solutions assets,
quantified according to industry best practice. a 46
38
32 32
Our target to keep methane emissions intensity below 0.2% was met in
2023 with Shell's overall methane emissions intensity at 0.05% for facilities
with marketed gas and 0.001% for facilities without marketed gas. 2016 2021 2022 2023

a Chemicals & Products c Integrated Gas

In 2023, Shell's total methane emissions were 41 thousand tonnes
b Upstream d Other [C]
compared with 40 thousand tonnes in 2022. The increase was due
to venting (e.g. the maintenance of our Floating LNG Prelude asset [A] Total direct (Scope 1) and energy indirect (Scope 2) GHG emissions from assets and
and operational issues in assets operated by Sarawak Shell Berhad) activities under the operational control boundary. It includes emissions from production
of energy and non-energy products. For Scope 2, we used the market-based method.
and an increase in reported emissions from integrated gas assets [B] Figures disclosed are rounded. The split between Scope 1 and 2 may not add up to
in Canada resulting from the adoption of enhanced source-level the total due to rounding.
measurements in line with The Oil and Gas Methane Partnership [C] Other covers Renewables and Energy Solutions, Marketing, P&T and Real Estate.

(OGMP) reporting requirements.

Our indirect GHG emissions associated with imported energy (Scope
2, operational control boundary) remained flat at 7 million tonnes
CO2e in 2023 (using the market-based method), compared with 2022.

Drivers of absolute Scope 1 and 2 emissions change

Scope 1 and Scope 2 GHG emissions changes from 2016 to 2022 and from 2022 to 2023
million tonnes carbon dioxide equivalent (CO₂e)
90 5.0
85 83 b

80
c
75

70

65 a
(22.9) 5.7
60 d f
58 0.1 1.4 57
e b c d f
e
55 (1.9) (0.9) (0.1)
a (1.1) a
(11.2)
50
2016 2022 2023

a Emissions [A] d Reduction activities and purchased renewable electricity [B] [C] [D] [E]
b Acquisitions e Change in output [F]
c Divestments f Other

[A] Total Scope 1 and Scope 2 emissions, rounded to the nearest million tonnes. Scope 2 emissions were calculated using the market-based method.
[B] In addition to reductions from GHG abatement and energy efficiency projects, this category also includes reductions from shutdowns and conversion of existing assets.
[C] Excludes 6.8 million tonnes of CO₂ captured and sequestered by the Shell-operated Quest CCS facility in Canada in 2016-2022.
[D] Excludes 1.0 million tonnes of CO₂ captured and sequestered by the Shell-operated Quest CCS facility in Canada in 2023.
[E] Of the 1,081 thousand tonnes of reduction activities and purchased renewable electricity in 2023, around 200 thousand tonnes related to purchased renewable electricity.
[F] Change in output relates to changes in production levels, including those resulting from shutdowns and turnarounds as well as production from new facilities.

Scope 3 and net carbon intensity

NCI performance
In 2023, Shell's NCI was 74 grams of carbon dioxide equivalent per megajoule of energy (gCO2e/MJ), a 2.6% decrease from the previous
year and a 6.3% reduction compared with the 2016 baseline. The decrease in Shell's NCI in 2023 was mainly achieved through a reduction
in the average intensity of power sold and the use of carbon credits. The power intensity reduction was driven mainly by progress in grid
decarbonisation in key markets such as the USA and Europe and partly by increased sales of renewable power including the retirement
of Renewable Energy Certificates.

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NCI performance

(equity boundary) 2023 2022 2021 2016

NCI [A] [B] gCO2e/MJ 74 76 77 79
Estimated total energy delivered by Shell [C] trillion (10^12) MJ 16.07 16.29 17.89 20.93
Estimated total GHG emissions included in NCI (net) [D] million tonnes CO2e 1,185 1,240 1,375 1,645
Carbon credits million tonnes CO2e 20.0 4.1 5.1 0.0
Estimated total GHG emissions (gross) [E] million tonnes CO2e 1,205 1,244 1,381 1,645

[A] All figures disclosed are rounded. In grams of carbon dioxide equivalent per megajoule.
[B] Acquisitions and divestments are included in the actual performance tracking with the target and baseline year unchanged. Acquisitions and divestments could have a material impact on
meeting the targets.
[C] Volume of energy products sold, aggregated on an energy basis, with power represented as fossil equivalent. Energy products consist of energy oil products (gasoline, diesel, kerosene, fuel
oil and LPG), GTL, biofuels, liquefied natural gas, pipeline gas and power. The NCI calculation uses energy product sales volumes data, disclosed in this Report where relevant. These sales
volumes exclude certain contracts held for trading purposes and reported net rather than gross. Business-specific methodologies have been applied to net volumes of oil products, pipeline gas
and power. Paper trades that do not result in physical product delivery are excluded. Retail sales volumes from markets where Shell operates under trademark licensing agreements are not
included in the sales volumes reported by Shell and are therefore excluded from the scope of Shell´s NCI metric.
[D] These numbers include well-to-wheel emissions associated with energy products sold, on an equity boundary basis; they also include the well-to-tank emissions associated with the
manufacturing of energy products by others that are sold by Shell. Emissions associated with the manufacturing and use of non-energy products are excluded.
[E] While the NCI is an intensity measure and not an inventory of absolute emissions, a notional estimate of the amount of GHG emissions covered by the scope of the NCI calculation can be derived
from the final NCI value for any year. Similarly, a fossil-equivalent estimate of the total amount of energy sold included in the calculation can also be determined.

As part of our Powering Progress strategy, we aim to increase the share Carbon intensity of energy products
of low-carbon products in our energy product sales, which is the
biggest driver for reducing our NCI. gCO2e/MJ
2023 2022 2021 2016
Share of estimated total energy delivered per energy
Oil products and gas-to-liquids 91 91 91 89
product type [A]-[B]
Gas 66 65 66 67
e 7%
1% 12% 12% 14% Liquefied natural gas (LNG) 70 70 70 71
d
c 1% 1% 1%
14% Biofuels 39 39 41 40
18% 20% 21%
Power [A] 49 58 66 59
b 24%
25% 22% [A] In 2021, we changed our approach to the estimation of the emissions intensity of the
20%
power we sell. This prospective change was the main driver for the intensity increase
compared with 2016.

a 54%
45% 44% 44% Carbon credits

Million carbon credits [A]

2016 2021 2022 2023 2023 2022 2021 2016

a Oil products and gas-to-liquids (GTL) d Biofuels Total carbon credits [B]
b Gas e Power Included in Shell's NCI metric [C] 20.0 4.1 5.1 0.0
c Liquefied natural gas (LNG)
Excluded from Shell's NCI metric [D] 1.8 1.7 1.3 0.0
[A] Percentage of delivered energy may not add up to 100% because of rounding.
[A] One carbon credit represents the avoidance or removal of one metric tonne of CO2
[B] Total volume of energy products sold, aggregated on an energy basis (lower heating
equivalent.
value) with power represented as fossil equivalents. Emissions included in the carbon
[B] Represents credits relating to transactions occurring in the financial year irrespective of
intensity of power have been calculated using the market-based method. The carbon
the actual retirement date. Retirements from registries may take place after the year-end.
intensity of biofuels reflects the global average for biofuels sold in 2023.
Excludes carbon credits transactions executed by Shell on behalf of/with third parties
without a link to Shell activities.
Our ability to change the emissions intensity of each energy product [C] Carbon credits associated with the sale of energy products and carbon credits used to
compensate for Shell Group emissions including operational emissions and emissions
varies depending on the product type: associated with the use of sold products.
￮ Hydrocarbon fuels - emissions from end-use by customers are by [D] Carbon credits retired in relation to sales of non-energy products and Shell's internal
far the biggest contributors to the carbon intensity of the product. activity like corporate travel.

As a result, the emissions intensity of hydrocarbon fuels is expected

to stay relatively unchanged over time. This is why we are focused In 2023, Shell's NCI accounted for 20.0 million carbon credits, of
on helping our customers decarbonise. which 4.0 million were linked to the sale of energy products. Of the
￮ Biofuels - can vary significantly in intensity depending on the carbon credit retirements included in Shell's NCI metric for 2023, 85%
feedstock and production process used. were certified by Verra, 9% by the American Carbon registry, 6% by
￮ Power - the emissions intensity of power can be highly variable Gold Standard, and less than 1% via Australian Carbon Credit Units.
depending on how it has been generated. The proportion of our
renewable power sales and the generation mix in countries where
we sell power to the market both affect Shell's overall power mix
and its resulting emissions intensity.

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Drivers of absolute Scope 3 emissions change in 2023 Setting targets for NCI
We sell more energy products than the energy products we produce Shell's target is to become a net-zero emissions energy business by
ourselves, therefore, when we calculate our emissions, we include 2050. We also have short-, medium- and long-term targets to reduce
emissions from energy products that we produce ourselves as well the carbon intensity of the energy products we sell, measured using our
as from the products that we purchase from others for resale. This NCI metric. We believe these targets are aligned with the more
is reflected in the scope for calculation of our emissions shown in ambitious goal of the Paris Agreement, which is to limit the rise in
the chart on page 111. Our strategy is based on working with our global average temperature this century to 1.5°C above pre-industrial
customers to address the emissions from the use of our products and levels.
to help them find ways to reduce their emissions to net zero by 2050.
There is no established standard for aligning an energy supplier's
Scope 3 emissions by category decarbonisation targets within the 1.5°C temperature goal of the Paris
Agreement. For this reason, we have defined our NCI target using
GHG emissions (equity boundary), 1.5°C scenarios developed for the IPCC's AR6.
million tonnes CO2e [A] 2023 2022 2021 2016
We start with the complete set of 1.5°C scenarios and then exclude
Scope 3, Category 1: purchased goods
and services 154 144 147 172
scenarios which are too reliant on carbon removals or use of bioenergy
before removing outliers. We then calculate an emissions intensity for
Scope 3, Category 3: fuel and energy-
each scenario which is comparable to our own NCI. Finally, we
related activities 112 115 136 89
produce a 1.5°C pathway based on the reductions in emissions
Scope 3, Category 9: downstream
intensity over time. We have chosen to use a range instead of any
transport and distribution [B] 3 5 6 —
individual scenario to better reflect the uncertainty of the
Scope 3, Category 11: use of sold energy transition.
products [C] 878 910 1,010 1,284
1,147 1,174 1,299 1,545 We believe that using this pathway to set our targets demonstrates
[A] Categorised using the definitions from the GHG Protocol's Corporate Value Chain that they are aligned with the more ambitious 1.5°C goal of the Paris
(Scope 3) Standard. Agreement. This is illustrated in the chart below.
[B] An estimate of Scope 3, Category 9 was not performed in 2016.
[C] Customer emissions from the use of our oil products (Scope 3, Category 11) were 517
million tonnes CO2e in 2023, 569 million tonnes CO2e in 2021 and 819 million tonnes We also believe that the pace of change will vary around the world
CO2e in 2016. by region and by sector, taking into consideration the time needed
for energy users to invest in large-scale equipment and the energy
The reported Scope 3 emissions within the NCI boundary have infrastructure changes needed for Shell to deliver more low- and
reduced from 2022. The decrease is largely due to a reduction in sales zero-carbon energy.
of gas and refined oil products. Furthermore, Scope 3 emissions for our
sales of power were comparable year on year as we sold more power Shell's Paris-aligned targets
but at a lower average intensity in 2023 compared with 2022.
120%
Scope 3 emissions from categories 1, 3 and 11 make up the majority
of Shell's Scope 3 emissions under the equity boundary. Shell reports
b
100%
Scope 3 emissions across all 15 categories annually. e
80%
c
For further details see shell.com/ghg
60%

We undertake external verification of our GHG emissions annually.

40%
Our Scope 1 and 2 GHG emissions from assets and activities under
our operational control and emissions associated with the use of our d a
20%
energy products (Scope 3) included in our NCI have been verified
to a level of limited assurance by LRQA Group Limited.
0%
2010 2015 2020 2025 2030 2035 2040 2045 2050 2055
Targets used by Shell to manage climate-related risks
and opportunities and performance against targets
Shell's material climate-related risks and opportunities are set out in a IPCC AR6 b Shell c IEA APS
the "Climate-related risks and opportunities identified by Shell over 1.5oC range historical
the short, medium and long term" section. Our response to the energy
transition risk focuses on decarbonising our value chain. Our climate d IEA NZE e Shell targets
targets are focused on reducing our NCI and our absolute emissions,
as presented on pages 103-104.

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Scope 1 and 2 progress towards target ￮ making portfolio changes such as acquisitions and investments
The chart below shows our progress since 2016 in reducing our Scope in new, low-carbon projects. We are also decommissioning plants,
1 and 2 emissions and gives an indication of how we expect to achieve divesting assets, and reducing our production through the natural
our target in 2030. The actions we will take to achieve our target will decline of existing oil and gas fields;
depend on the evolution of our asset portfolio and the continued ￮ improving the energy efficiency of our operations;
development of technologies which reduce carbon emissions. We ￮ transforming our remaining integrated refineries into low-carbon
expect that on a net portfolio basis, new investments across our energy and chemicals parks, which involves decommissioning plants;
portfolio will increase our Scope 1 and 2 emissions between 2024 and ￮ using more renewable electricity to power our operations; and
2030, but this increase will be outweighed by reductions associated ￮ developing carbon capture and storage (CCS) for our facilities.
with planned divestments and natural decline. Our investments in
producing low-carbon energy such as biofuels will increase our Scope 1 If required, we may choose to use high-quality carbon credits to offset
and 2 emissions, while reducing the NCI of the products we sell. any remaining emissions from our operations, in line with the mitigation
Subsequent reductions in our emissions are reflected in the mechanisms hierarchy of avoid, reduce, and compensate.
outlined below and reflect an expected path to meeting our target in
2030. To decarbonise our operations, we are focusing on:

Working to reduce our absolute Scope 1 and 2 emissions

Scope 1 and 2 emissions in million tonnes of CO2e [A],[B]

83

b 11 -31%
71
68
-50%
8
8 58 57
7 7
41
a 72
63 60
51 50
c

2016 2020 2021 2022 2023 Portfolio Efficiency Energy and Use of Carbon Carbon 2030
changes improvements chemicals renewable capture credits [C]
park power and storage
a Scope 1 b Scope 2 c Target
transformation

[A] The 2016 baseline was not recalculated in 2023. The 2016 baseline may be recalculated in future years if an acquisition or a divestment has an impact of more than 10% on the total Scope 1
and 2 emissions.
[B] Operational control boundary.
[C] Including nature-based solutions.

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NCI progress towards target

The biggest driver for reducing our NCI is increasing the sales of and demand for low-carbon energy. The chart below illustrates how changes
in the volume of products and services we sell could result in NCI reductions to 2030. The change in our sales of these products and services
will also reflect the development and adoption of new technologies and infrastructure, and the adoption of public policies designed to encourage
the energy transition.

Working to reduce our NCI

NCI in gCO2e/MJ [A]

-6.3%
79 -15-20%
77 76 74

■ Grow ■ Grow ■ Develop ■ High-quality

a power sales biofuels, Carbon carbon
develop capture credits
hydrogen and storage

2016 2021 2022 2023 Hydrocarbon Power Low-carbon Carbon Carbon 2030
sales sales fuels sales capture credits
a Actual b Target [B] [C] [D] and storage [F]
[E]

[A] Grams of carbon dioxide equivalent per megajoule.

[B] Hydrocarbon sales reflect the effect of lower sales of oil products, and higher sales of natural gas. Emissions associated with gas are lower than those of oil products.
[C] Power sales show the expected growth of our integrated power business and increasing sales of renewable power.
[D] Sales of low-carbon fuels reflect higher sales of biofuels and hydrogen, which are low- and zero-carbon products.
[E] CCS reduces carbon emissions by capturing them at source.
[F] Carbon credits such as nature-based solutions can be used to offset remaining carbon emissions, particularly in hard-to-abate sectors such as aviation and industries including cement
and steel.

Linking Shell's emissions targets to remuneration Energy transition performance condition and the vesting
We have established remuneration structures to support us in reducing of the 2021 LTIP and PSP awards
our operational emissions and to support customers in reducing their The following performance outcomes for the energy transition
emissions. Our annual bonus scorecard, Long-term Incentive Plan (LTIP) performance condition were considered in the assessment of the
and Performance Share Plan (PSP) contain "Shell's journey in the 2021 LTIP and PSP vest, covering the performance cycle 2021-2023:
energy transition" performance metrics designed to ensure that
remuneration is clearly aligned with Shell's operating plan and Outcome
longer-term strategic ambitions. Net carbon intensity (NCI) Performance indicator met
Growing the power business Substantively met
See "Directors' Remuneration Report" on pages 191-193.
Growing new lower-carbon product offerings Partially met
Develop emissions sinks Not met
Almost all employees participate in the annual bonus scheme which
is linked to the Group scorecard. Executive Directors and around 130
In addition to the above, a number of broader indicators of Shell's
senior executives participate in the LTIP and around 17,800 employees
progress in the energy transition were considered. Overall, it was
participate in the PSP, which is designed to retain key employees and
determined that the energy transition measure (accounting for 20%
ensure they have a greater investment in Shell's future.
of the LTIP award and 10% of the PSP award) should vest at 120%.
The LTIP and the PSP measure performance over a three-year
performance period. Executive Directors' awards are also subject to See "Annual Report on Remuneration" on pages 199-202.
a further three-year holding period after vesting. Executive Directors
and senior executives are also subject to ongoing shareholding
requirements.

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Energy transition performance condition in the 2023 LTIP The 2023 full-year outcome for selling lower-carbon products was
and PSP awards below target (but above threshold level) for a range of reasons
For LTIP and PSP awards granted in 2023, the energy transition including lower lubricants demand and higher costs for lower-carbon
performance condition had a weighting of 12.5% for the PSP and 25% Mobility products.
for the LTIP. The performance condition for these awards is based on
NCI reduction and the supporting strategic themes of reducing Scope 1 In 2023, the outcome for operational emissions reductions was
and 2 emissions; building a renewable power business; growing new outstanding, reflecting the cumulative effects of actions across the
low-carbon energy offerings; and developing emission sinks and offsets. portfolio, which support our target to halve Scope 1 and 2 operational
The vesting outcome is at the discretion of the REMCO who will make emissions by 2030 (when compared to the 2016 baseline). This
a holistic assessment of progress when making the vesting decisions. includes abatement projects, use of renewable energy, and permanent
shutdowns or conversions ("right-sizing") of assets.
Energy transition performance condition for 2024 LTIP awards
For the 2024 LTIP and PSP awards, the "Shell's journey in the energy We are building an electric vehicle charging business to help
transition" performance condition retains the same weightings as for decarbonise road transport. In 2023 we opened 60 new electric
2023. The REMCO's determination of the extent to which awards vehicle charging hubs in Belgium, China, Germany and the
will vest will be based on its holistic assessment of progress towards Netherlands, including our biggest electric vehicle charging site in
reducing emissions from our operations and supporting our customers the world in China, together with our joint-venture partner BYD.
to reduce their emissions. This will be based on our journey to net-zero In 2024, the REMCO has adjusted the energy transition measure in
climate targets for our own operations of: our annual scorecard in light of the energy transition strategy update,
￮ Halving Scope 1 and 2 emissions by 2030 under operational control continuing to align to Shell's strategic objective of becoming a net-zero
on a net basis (2016 baseline); emissions energy business by 2050, supporting a balanced energy
￮ Eliminating routine flaring from upstream operations by 2025 [A]; transition by responsibly delivering the oil and gas people need today,
and while helping to build the clean energy system of the future. The metric
￮ Maintaining methane emissions intensity below 0.2% and achieving "Shell's journey in the energy transition" in the annual bonus scorecard
near-zero methane emissions by 2030. represents:
￮ LNG volumes – equity liquefaction;
The REMCO will also take into account progress in developments ￮ Reducing operational emissions – operational actions to reduce
that support the energy transition to 2030 and beyond, such as the emissions in support of our target to achieve a 50% reduction in
development of our Power business (including renewables), lower- Scope 1 and 2 emission by 2030, on a net basis; and
carbon LNG, biofuels, electric vehicle charging, hydrogen and ￮ Support customer decarbonisation – electric vehicle charge
carbon capture and storage (CCS). point roll-out.
[A] Subject to completion of the sale of SPDC.

The REMCO will take into account progress towards achieving a See "Annual Report on Remuneration" on page 198.

15-20% reduction in NCI by 2030 (2016 baseline) and a 15-20%

reduction in customer emissions from the use of our oil products by
Metrics and targets in respect of climate-related
2030 (2021 baseline) [A] as well as Shell's wider performance in
environmental risks
accelerating the energy transition, e.g. demonstrating leadership and
We have set a target to reduce the amount of fresh water consumed
advocacy in standard-setting, alongside any other factors that the
in our facilities, starting by reducing our consumption of fresh water by
REMCO considers material.
15% by 2025, compared with 2018 levels, in areas where there is high
[A] Customer emissions from the use of our oil products (Scope 3, Category 11) were
517 million tonnes CO2e in 2023 and 569 million tonnes CO2e in 2021. pressure on fresh-water resources. We also monitor the level of waste
disposed of from our operations and businesses are now setting local
waste management targets and developing implementation plans
See "Annual Report on Remuneration" on page 209 for more information on the
based on waste and circularity assessments that we have conducted.
proposed performance framework.
In 2023, we continued to implement our biodiversity commitments in
our projects and assets, with critical and forest habitats as priorities.
Energy transition targets in the annual bonus scorecard
Delivering on our net-zero emissions target is a part of the annual See "Respecting nature" on pages 118-119.
scorecard, which helps determine annual performance bonus outcomes
for senior management and almost all of Shell's employees.

The energy transition progress measures are shown in the table below.

2023 Scorecard: Shell's journey in the energy transition

2023 2023 2023

Target Performance Status
Reducing operational thousand
emissions tonnes of CO2 800 1,081 Outstanding

Selling lower-carbon Below the

products % [A] 60 54 target
Electric vehicle charge Above the
points Number 180,000 195,500 target

[A] Based on the percentage of Adjusted Earnings in the Marketing segment from lower-
carbon energy products (on a life-cycle basis), defined as biofuels and EV charging, as well
as non-energy products, defined as lubricants, bitumen, sulphur (agriculture and forestry),
and earnings from convenience retail.

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Basis of preparation – net carbon intensity (NCI) We have received third-party limited assurance on our NCI for the
Shell's NCI is the average intensity, weighted by sales volumes, period 2016 to 2023.
of the energy products sold by Shell. It is tracked, measured and
reported using the Net Carbon Footprint (NCF) methodology.

Scope of NCI

Production Processing Distribution and sales Use of our energy products

Third-party crude oil Third-party products

c Oil
products

Refining Sales
a
Natural
gas

Own oil and Liquefied

gas production natural gas
(LNG)

b Processing, liquefaction, Sales

gas-to-liquids (GTL) GTL

Third-party gas Third-party products

Third-party power

Renewable energy Power

Sales

Gas production Power plant

Biofuels

Renewable raw materials Processing Sales

Third-party biofuels

Scope includes Shell's CO₂ sinks such as carbon capture and storage (CCS) and nature-based solutions (NBS)

a Emissions from b Emissions from c Emissions from d Power

bringing own bringing third-party use of sold products distribution
products to market products to market

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Shell's NCI provides an annual measure of the life-cycle emissions The NCI is not a mathematical derivation of total emissions divided
intensity of the portfolio of energy products sold. The intended use by total energy, nor is it an inventory of absolute emissions. It is a
of the NCI metric is to track progress in reducing the overall carbon weighted average of the life-cycle CO2 intensities of different energy
intensity of the energy products sold by Shell. The NCI is calculated products, normalising them to the same point relative to their final end-
on a life-cycle basis and as such includes GHG emissions – on an use. The use of a consistent functional unit, grams of carbon dioxide
equity basis – from several sources, including: equivalent per megajoule (gCO2e/MJ), allows like-for-like comparisons
￮ direct GHG emissions from Shell operations; and the aggregation of individual life-cycle intensities for a range of
￮ indirect GHG emissions from generation of energy consumed energy products including renewables.
by Shell; and
￮ indirect GHG emissions from the use of the products we sell. See our NCF methodology documentation (shell.com/ghg) for further information.

Emissions from other parts of the product life cycle are also included,
such as those from the extraction, transport and processing of crude Basis of preparation – absolute Scope 1, 2 and 3
oil, gas or other feedstocks and the distribution of products to our emissions
customers. Also included are emissions from parts of this life cycle not We follow the GHG Protocol's Corporate Accounting and
owned by Shell, such as the extraction of oil and gas processed by Reporting Standard, which defines three scopes of GHG emissions:
Shell but not produced by Shell; or from the production of oil products ￮ Scope 1: direct GHG emissions from sources under Shell's
and electricity marketed by Shell that have not been processed or operational control.
generated at a Shell facility. ￮ Scope 2: indirect GHG emissions from generation of purchased
energy consumed by Shell assets under operational control.
We also take into account emissions mitigated through various ￮ Scope 3: other indirect GHG emissions, including emissions
measures, such as by creating carbon sinks by working with nature – associated with the use of energy products sold by Shell.
including through protecting forests and wetlands – and by using
CCS technology. GHG emissions comprise CO2, methane (CH4), nitrous oxide,
hydrofluorocarbons, perfluorocarbons, sulphur hexafluoride and
See "Scope of NCI" on page 111 for details of the supply chains and steps in the product nitrogen trifluoride, with CO2 and methane being the most significant
life cycles that are included in the Net Carbon Footprint methodology. contributors. Our GHG inventory was prepared in line with the
requirements outlined in the ISO 14064-1:2018 Specification with
Guidance at the Organisational Level for Quantification and Reporting
The following GHG emissions are not included in the NCI: of Greenhouse Gas Emissions and Removals and the GHG Protocol's
￮ emissions from production, processing, use and end-of-life treatment Corporate Accounting and Reporting Standard.
of non-energy products, such as chemicals and lubricants;
￮ emissions from third-party processing of sold intermediate products, In line with external standards, Shell aggregates its GHG emissions
such as the manufacture of plastics from feedstocks sold by Shell; into tonnes of CO2 equivalent by applying global warming potential
￮ emissions associated with the construction and decommissioning of (GWP) factors to non-CO2 GHGs. These factors are taken from the
production and manufacturing facilities; IPCC's Fifth Assessment Report (AR5) over a 100-year time period, in
￮ emissions associated with the production of fuels purchased to line with the UK Government GHG Conversion Factors for Company
generate energy on site at a Shell facility; Reporting. GHG emissions for 2023 were calculated using AR5 GWPs,
￮ other indirect emissions from waste generated in operations, business which were applied prospectively. For comparison our Scope 1
travel, employee commuting, transmission and distribution losses emissions would have been 49 million tonnes in 2023 if we were to
associated with imported electricity, franchises and investments; and have used GWPs from the IPCC's Fourth Assessment Report (AR4).
￮ emissions from capital goods, defined by the GHG Protocol as
including fixed assets or property, plant and equipment, and other GHG emissions are aggregated using a bottom-up approach: emission
goods and services not related to purchased energy feedstocks source → asset → operating unit → business → Group. GHG emissions
sourced from third parties or energy products manufactured by in this Report include emissions from Integrated Gas and Upstream,
third parties and sold by Shell. Renewables and Energy Solutions and Downstream (Chemicals and
Products and Marketing) and Projects & Technology, plus Shell's
The NCI calculation uses Shell's energy product sales volumes data, functions. All operated assets are included in the GHG inventory
as disclosed in this Report. This excludes certain sales volumes such as: in the reporting period.
￮ certain contracts held for trading purposes reported net rather than
gross. Business-specific methodologies to net volumes have been Basis of preparation – Scope 1 emissions
applied in oil products and pipeline gas and power. Paper trades Sources included in Scope 1 emissions comprised:
that do not result in physical product delivery are excluded; and ￮ combustion of carbon-containing fuels in stationary equipment
￮ retail sales volumes from markets where Shell operates under (e.g. boilers, gas turbines) for energy generation;
trademark licensing agreements. ￮ combustion of carbon-containing fuels in mobile equipment
(e.g. trucks, vessels, mobile rigs);
The energy products included in the NCI calculation are oil products, ￮ flares;
(gasoline, diesel, kerosene, fuel oil and LPG), GTL, biofuels, liquefied ￮ venting and emissions from industrial processes (e.g. hydrogen
natural gas, pipeline gas and power. plants, catalytic cracking units); and
￮ fugitive emissions, including piping and equipment leaks and
The impact of acquisitions and divestments on emissions and sales non-routine events.
volumes is included in actual NCI performance tracking with the target
and baseline unchanged. Acquisitions and divestments could have
a material impact on meeting the NCI targets.

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Our Scope 1 emissions follow the GHG Protocol guidance. As a result, Scope 3, Category 3: fuel and energy-related activities
the following were not included in our reported Scope 1 emissions: (not included in Scope 1 and 2)
￮ CO2 emissions from biogenic sources (for example, biofuels, This category includes well-to-wire emissions from purchased third-party
biomass), whereas methane and nitrous oxide emissions from electricity sold by Shell, calculated using the market-based method.
biogenic sources were included in our Scope 1 emissions. Emissions were not adjusted for any potential double-counting of sold
￮ Captured CO2 that was subsequently sold or otherwise transferred natural gas that may have been used for generating this electricity.
to third parties.
￮ CO2 captured and sequestered using CCS technologies. However, This category does not include:
the emissions from operating CCS were included in our Scope 1 ￮ indirect emissions from generation of imported energy (steam,
and 2 emissions. heat or electricity consumed by our assets). These emissions
￮ Carbon credits. were reported separately as Scope 2 emissions; and
￮ well-to-tank emissions from purchased electricity, steam and heat
All significant sources were included in the Scope 1 inventory. consumed by our assets (i.e. Scope 3 emissions from extraction,
refining and transport of primary fuels before their use in the
Basis of preparation – Scope 2 emissions generation of electricity or steam).
Sources included in Scope 2 emissions comprised indirect emissions
from purchased and consumed electricity, steam and heat. We did not Scope 3, Category 9: downstream transport and distribution
identify any assets with imported cooling or compressed air used for This category includes estimated emissions from transport and
energy purposes. distribution of energy products produced or refined by Shell. It does not
include the emissions associated with transporting third-party products,
Scope 2 emissions were calculated using the market- and location- which are included in Scope 3, Category 1. In order to avoid double-
based methods separately as defined by the GHG Protocol Scope 2 counting the emissions from transport, Scope 1 and 2 emissions from
Guidance. transport included in our equity emissions were subtracted from the
total in this category.
All significant sources were included in our Scope 2 inventory.
Scope 3, Category 11: use of sold products
Basis of preparation - Scope 3 emissions This category includes estimated emissions from the use of sold
This Report provides Scope 3 emissions associated with our energy energy products, such as LNG, GTL, pipeline gas, refined oil products
product sales. They were consolidated using the equity boundary and biofuels. The emissions consist of two sub-categories: products
approach. Under this approach, we reported the Shell share of manufactured and sold by Shell and third-party products sold by Shell.
emissions from energy products sold, including those sourced from
third parties. The calculation of Scope 3 emissions uses energy product This category does not include non-energy products that may have
sales volumes data, disclosed in this Report where relevant. These sales been combusted during use (for example, lubricants).
volumes exclude certain contracts held for trading purposes and
reported net rather than gross. Business-specific methodologies have Biogenic CO2 emissions from combustion of sold biofuels
been applied to net volumes of oil products, pipeline gas and power. Biogenic CO2 emissions from the combustion of sold biofuels were
Paper trades that do not result in physical product delivery are estimated and reported separately outside of scopes. Methane
excluded. Retail sales volumes from markets where Shell operates and nitrous oxide were included in Scope 3, Category 11 in line
under trademark licensing agreements are not included in the sales with the ISO 14064-1:2018 and GHG Protocol requirements.
volumes reported by Shell and are therefore excluded from the
Scope 3 categories described below. We did not estimate biogenic CO2 emissions in other Scope 3
categories. It is assumed that the presence of biogenic emissions
Scope 3 categories included in this Report consist of the following: in other categories is negligible at present.

Scope 3, Category 1: purchased goods and services Other Scope 3 categories

This category includes well-to-tank emissions from purchased third-party As noted above, this Report only covers Scope 3 GHG emissions
unfinished and finished energy products excluding electricity (which associated with our energy product sales.
was reported separately under Category 3: fuel and energy-related
activities (not included in Scope 1 or Scope 2)). See our website: shell.com/ghg for other Scope 3 GHG emissions.

Emissions in this category were estimated using well-to-tank emission

factors for crude oil, natural gas, refined oil products (such as gasoline,
and diesel), LNG and biofuels. Because the emission factors include
transport, we did not estimate emissions from transport of purchased
third-party products separately.

Emissions from purchased non-energy products were not included in

this Report.

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Other regulatory disclosures The activity data used to calculate GHG intensity ratios at a portfolio
level shown in the table above are reported on an operational control
basis. As a result, they are not directly comparable with the production
GHG emissions and energy consumption data -
data reported elsewhere in this Report, which are reported
information provided in accordance with UK regulations
on a financial control basis. The table below shows the numbers
Data in this section are consolidated using the operational control
used in the calculation of the intensity:
approach. Under this approach, we account for 100% of the GHG
emissions and energy consumption in respect of activities where
we are the operator, irrespective of our ownership percentage. Inputs used for calculating the GHG emissions intensity
ratio
Reporting on this operational control basis differs from that applied
2023 2022 2021
for financial reporting purposes in the "Consolidated Financial
Statements". We acknowledge the strong preference of the UK's A 8.1 Scope 1 - direct GHG emissions
Financial Reporting Council (FRC) for companies to report the [A] 50 51 60
GHG emissions and energy consumption data using the financial B 8.2 Scope 2 - energy indirect GHG
consolidation boundary and are working on including the data emissions [A] 7 7 8
and information on this boundary in our Annual Report in the future. C=A+B Total Scope 1 and 2 GHG
emissions [A] 57 58 68
See "Basis of preparation – absolute scope 1, 2 and 3 emissions" on page 112. D 6.5 Total oil and gas production
available for sale [B] 111 111 128

E 6.6 Refinery crude and feedstock

GHG emissions in million tonnes of CO2 equivalent processed [B] 62 63 84
F 6.3 Chemicals total production [B] 21 23 25
2023 2022 2021
G 6.4 LNG production [B] 10 9 10
Total global direct (Scope 1) [A] 50 51 60
H 6.6 GTL production [B] 6 6 6
UK including offshore area [B] 1.7 1.7 1.7
I=D+E+F+G+H Total Upstream, Integrated
Market-based
Gas and Downstream activity
Total global energy indirect (Scope 2) [C] 7 7 8 [B] 210 212 253
UK including offshore area 0 0 0 J=C/I GHG intensity ratio [C] 0.27 0.27 0.27
Location-based [A] In million tonnes CO2 equivalent.
[B] In million metric tonnes of production.
Total global energy indirect (Scope 2) [D] 8 8 9
[C] In tonnes of CO2 equivalent per tonne of production.
UK including offshore area 0.04 0.04 0.05
Intensity ratio in tonnes per tonne Energy use in our operations
The energy consumption data provided below comprise own energy,
Intensity ratio of all facilities [E] 0.27 0.27 0.27
generated and consumed by our facilities, and supplied energy
[A] Emissions from the combustion of fuels and the operation of our facilities globally, (electricity, steam and heat) purchased by our facilities for our use.
calculated using global warming potentials from the IPCC's Fifth Assessment Report.
[B] Emissions from the combustion of fuels and the operation of our facilities in the UK and
its offshore area, calculated using global warming potentials from the IPCC´s Fifth Energy consumption data reflect primary (thermal) energy (e.g. the
Assessment Report. energy content of fuels used to generate electricity, steam, heat,
[C] Emissions from the purchase of electricity, heat, steam and cooling for our own use
globally, calculated using a market-based method as defined by the GHG Protocol mechanical energy, etc.). This includes energy from renewable and
Corporate Accounting and Reporting Standard. non-renewable sources. Own energy generated was calculated by
[D] Emissions from the purchase of electricity, heat, steam and cooling for our own use multiplying the volumes of fuels consumed for energy purposes by
globally, calculated using a location-based method as defined by the GHG Protocol
Corporate Accounting and Reporting Standard. their respective lower heating values. Own energy generated that was
[E] In tonnes of total direct and energy indirect GHG emissions per tonne of crude oil and exported to third-party assets or to the power grid is excluded. Thermal
feedstocks processed and petrochemicals produced in downstream manufacturing, oil
and gas available for sale, LNG and GTL production in Integrated Gas and Upstream.
energy for purchased and consumed electricity was calculated using
For an additional breakdown by segment, see the Scope 1 and 2 GHG intensity by actual electricity purchased multiplied by country-specific electricity
segment section. generation efficiency factors (from IEA statistics). Thermal energy for
purchased and consumed steam and heat was calculated from actual
steam/heat purchased multiplied by a supplier-specific conversion
efficiency, or a generic efficiency factor where supplier-specific
data were not available.

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Our energy consumption decreased from 209 billion kilowatt-hours Examples of some of the principal measures that were taken in 2022
(kWh) in 2022 to 205 billion kWh in 2023, in line with the decrease are listed below (with estimated total savings of around 1,155 million
in our Scope 1 and 2 GHG emissions. Around 1% of the energy kWh in 2022):
we used in 2023 for our operations came from low-carbon and ￮ At our GTL asset in Qatar, we completed several projects to
renewable sources. reduce energy use and improve efficiency, for example by making
improvements to catalyst performance which resulted in reduced
Energy consumption in billion kilowatt-hours generation of off-gas leading to lower energy consumption.
￮ At our Gulf of Mexico operations in the USA, we implemented a
2023 2022 2021 project to reduce energy use and improve efficiency by using waste
heat to generate steam.
Own energy generated and consumed
￮ At our Upstream operations in the UK, we completed several
Total energy generated and consumed [A] 174 177 205 projects to reduce energy use and improve efficiency, for example
UK including offshore area 6.1 6.1 6.2 by implementing an online model to optimise fuel gas usage at
Purchased and consumed energy Shearwater (our North Sea oil and gas operated asset).
￮ At our Scotford hydrocarbon processing site in Canada, we
Total purchased and consumed energy [A] 31 32 33
implemented several projects to reduce energy use and improve
UK including offshore area 0.2 0.2 0.2 efficiency, for example by using analysers to optimise fuel usage.
Energy consumption ￮ At our Geismar chemical plant in the USA, we implemented several
projects to reduce energy use and improve efficiency, for example
Total energy consumed [A] 205 209 238
by improving how some equipment operates.
UK including offshore area 6.3 6.3 6.4 ￮ At our QGC operations in Australia, we implemented several
[A] We have updated 2022 and 2021 figures following the review of data. projects to reduce energy use and improve efficiency, for example
by introducing a CO2/energy performance dashboard for control
In 2023, we implemented a variety of measures to reduce the energy room operators, which allowed operators to identify potential
use and increase the energy efficiency of our operations. efficiency savings based on real-time operating data.

Examples of some of the principal measures taken in 2023 to reduce EU Taxonomy Regulation
energy use and improve efficiency (with estimated total savings of The EU Taxonomy Regulation is a classification system for determining
around 999 million kWh in 2023) are: when an economic activity can be considered environmentally
￮ At our Geismar site in the USA: idling the furnace when not required. sustainable according to European Union (EU) standards. It aims to
￮ At our Rheinland site in Germany: optimising the amount of steam encourage investment in a low-carbon economy by creating common
required depending on use and load. definitions of sustainability and mandatory disclosures to help investors
￮ At our Sarnia site in Canada: replacing an existing reaction furnace make informed decisions. As a UK company with its registered office
with a new high-intensity burner. and headquarters in London, Shell plc is not currently subject to the
￮ At our Scotford complex in Canada: optimisation which enables Taxonomy Regulation. Nevertheless, we elect to report against the
a reduction in electricity and excess H2 vented to flare. taxonomy voluntarily because we recognise the importance of
￮ At our Prelude site in Australia: optimisation of the process and increasing transparency about how companies are progressing in the
operating conditions to reduce flaring. energy transition, even if the regulation is evolving. We expect to come
￮ At our Pearl site in Qatar: reducing steam generation requirements into scope in 2024 via the EU's Corporate Sustainability Reporting
via steam balance optimisation. Directive (CSRD), which extends the reporting obligations under the
￮ At our GTL asset in Malaysia: optimising fuel flows to the boiler unit. EU Taxonomy Regulation to third-country issuers that are listed on
￮ At our UK Upstream operations: reducing compression power European exchanges.
requirements between our Shearwater platform and St Fergus
gas terminal.
See "Supplementary information - EU Taxonomy disclosure" on pages 336-349.
￮ At our Gulf of Mexico operations in the USA: optimising power
generation between platform and rig and upgrading existing
equipment.
￮ At our Sarawak Shell Berhad assets in Malaysia: optimising the
usage of Gas Turbine Generators from four to three units.

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Respecting nature

Respecting
nature
We seek to protect the
environment, reducing
waste and making a
positive contribution
to biodiversity.

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Respecting nature continued

Introduction Environmental standards

Shell's global environmental standards are set out in our HSSE & SP
Control Framework and we seek to apply them wherever we operate.
Respecting nature is part of our Powering Progress strategy. We
Our approach draws on external standards and guidelines, such as
recognise there is a growing global urgency to protect and enhance
those developed by the World Bank and the International Finance
biodiversity, conserve fresh water and use resources more efficiently. As
Corporation. Our environmental standards include details of how
a business, we use natural resources such as land, water and materials
to manage emissions of greenhouse gases (GHG); consume energy
for our operations. Our activities can have an impact on nature through
more efficiently; reduce gas flaring, and monitor and improve air
discharges and emissions to the environment, and through changes
quality; prevent spills and leaks of hazardous materials; use less
to the use of land and water, including oceans.
fresh water; and conserve biodiversity.
In 2003, we decided not to explore for, or develop, oil and gas
When planning new major projects, we conduct detailed
resources in natural and mixed World Heritage Sites.
environmental, social and health impact assessments. The Shell HSSE &
SP Standards require that we certify our major installations against an
Since launching our Powering Progress strategy in 2021, we have:
internationally recognised independent environmental management
￮ worked to embed respecting nature into our activities and business
system standard if they have significant environmental risks. Major
processes;
installations are crude oil and natural gas terminals; gas plants;
￮ enhanced our internal performance management systems to track
manned offshore and onshore production platforms or flow stations;
and report on progress; and
floating production and storage vessels; refineries; chemicals
￮ continued to build employees' awareness, knowledge and skills
manufacturing facilities; mines; or upgraders. For the purpose of this
to deepen their understanding of respecting nature.
Report, we did not count each major installation in Upstream and
Integrated Gas separately. They were aggregated into their respective
We are also updating our environmental standards and guidance
operating unit or operating company, such as Shell Upstream UK or
used by our projects and facilities around the world.
Nederlandse Aardolie Maatschappij (NAM), in line with the scope
of their certifications. At the end of 2023, 89% of major installations
In 2023, we reviewed our progress and performance on respecting
within that scope and operated by Shell were certified against the
nature. We consolidated our respecting nature ambitions announced
ISO 14001:2015 Environmental Management System or were in
as part of our Powering Progress strategy in 2021 into the following
compliance with equivalent environmental frameworks required by
themes: having a positive impact on biodiversity, aiming for zero
local regulations. We are pursuing certification for the remainder.
waste and using water, other resources and materials efficiently.
In addition, many installations that are not classified as major, such
as lubricant plants or supply terminals, are also certified against
We have already achieved some of the respecting nature commitments
ISO 14001:2015 Environmental Management System but are not
we set when we launched Powering Progress. Our commitment to
included in the data above.
reduce fresh-water consumption in highly water-stressed areas by
15% was achieved ahead of the target date of 2025. We have also
conducted detailed assessments to inform our approach to fresh See SP Control Framework on page 139 and "Our journey to net zero" on page 88.
water and waste, which will be tailored to local conditions. We are
working to help develop a viable circular economy for plastics but
Environmental costs
have concluded that the scale of our ambition to use 1 million tonnes
We are subject to a variety of environmental laws, regulations and
of plastic waste a year in our global chemical plants by 2025 is
reporting requirements in the countries where we operate. Infringing
unfeasible due to lack of available plastic waste feedstock, slow
any of these laws, regulations and requirements could harm our
technology development and regulatory uncertainty.
reputation and ability to do business, and result in significant costs,
including clean-up costs, fines, sanctions and third-party claims.
The remaining commitments announced in 2021 have either been
Ongoing operating expenses include the costs of preventing
incorporated into our new Safety, Environment and Asset Management
unauthorised discharges into the air and water, and the safe
(SEAM) Standards, which take effect from mid-2024, or are included
disposal and handling of waste.
in the relevant business objectives and processes.

See Note 24 to the "Consolidated Financial Statements" on pages 301-302.

See "Living by our values" on page 139 and our 2023 Sustainability Report.

We place a premium on developing effective technologies that are

Governance also safe for the environment. But when operating at the forefront
of technology, there is always the possibility that a new technology
Respecting the environment and local communities has been integral to has environmental impacts that were not assessed or foreseen to be
the way we do business for many years, as set out in the Shell General harmful when originally implemented. We develop new technology
Business Principles and the Shell Commitment and Policy on Health, using a robust technology maturation process. This enables us to
Security, Safety, the Environment and Social Performance (HSSE & SP). systematically de-risk technical and commercial risks, while ensuring
portfolio alignment with Shell's strategic ambitions and deployment
Our Executive Committee is accountable for the delivery of respecting commitments. While we believe we take reasonable precautions
nature, progress towards which is reviewed by our Board's to limit these risks, we could be subject to additional remedial,
Sustainability Committee (SUSCO). environmental and litigation costs as a result of unknown and
unforeseen impacts of operations on the environment.
See "Sustainability Committee" on pages 177-178 and "Living by our values" on page 137.
See "Risk management and controls" on page 223.

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Positive impact on biodiversity Resource use and circular economy

and ecosystems As part of our overall respecting nature ambition, we aim to use
water, other resources and materials efficiently, and to increase reuse
Our priorities for biodiversity are critical and forest habitats.
and recycling. We have conducted detailed assessments across our
￮ Forest habitats: We will replant forests, achieving net-zero
businesses to better understand our waste streams and define our
deforestation from new activities, while maintaining biodiversity
approach. Our businesses are developing local waste management
and conservation value, commenced in 2022.
implementation plans. We are exploring ways to improve the
￮ Critical habitats: Our new projects in areas rich in biodiversity –
application of circular economy principles by developing
critical habitats – will have a net positive impact on biodiversity,
circularity strategies.
commenced in 2021. We apply the same definition for measuring
our net positive impact (NPI) for projects as the International Finance
Water
Corporation (IFC, 2019). The IFC states: NPI on biodiversity is a
We are implementing water stewardship principles across our
target for project outcomes in which the impacts on biodiversity (for
businesses and developing local improvement plans. This includes
example, the variety of ecosystems and living things) caused by the
focusing on the sustainable management of fresh water, including
project are outweighed by the actions taken to avoid and reduce
in water-stressed areas.
such impacts, rehabilitate affected species and / or landscapes
and offset any residual impacts.
Our Powering Progress strategy launched in 2021 contained the
following water-related statements:
When planning a new project on land or offshore in the marine
￮ Our ambition is to conserve fresh water by reducing consumption
environment, we apply the mitigation hierarchy, a decision-making
and increasing reuse and recycling.
framework that involves a sequence of four key actions: avoid,
￮ We will reduce the amount of fresh water consumed in our facilities,
minimise, restore and offset. We assess the potential impact of
starting by reducing our consumption of fresh water by 15% by
projects on biodiversity and local communities as part of our
2025, compared with 2018 levels, in areas where there is high
impact assessment process.
pressure on fresh-water resources.
In 2023, we embedded our biodiversity commitments into our new
In 2023, we continued to make progress in reducing our consumption
Safety, Environment and Asset Management (SEAM) Standards, which
of fresh water in highly water-stressed areas.
take effect in mid-2024. We are developing guidance and sharing
good practice across the organisation to support implementation.
At the end of 2023, four of our major facilities were located in areas
where there is a high level of water stress based on analysis using
See "Living by our values" on page 139 for more information on the SEAM Standards. water stress tools. These tools include the World Resources Institute's
Aqueduct Water Risk Atlas and local assessments. The facilities are:
￮ Pearl GTL (gas-to-liquids) plant in Qatar;
Forest habitats ￮ Shell Energy and Chemicals Park Singapore;
Deforestation occurs when forests are converted to non-forest uses. ￮ Shell Jurong Island chemical plant in Singapore; and
We use the definition of forest used by the Food and Agriculture ￮ Tabangao Import Terminal in the Philippines.
Organization of the United Nations.
In 2023, these facilities consumed 17 million cubic metres of fresh
Our aim is to avoid deforestation, in line with the mitigation hierarchy. water, compared with 18 million cubic metres in 2022. With this
Where avoidance cannot be achieved, we require our projects and reduction we achieved our commitment to reduce fresh-water
assets to develop and implement reforestation plans that include consumption by our facilities in areas of high water stress by 15%
measures to achieve net-zero deforestation, while maintaining compared with our 2018 levels with a baseline of 25 million cubic
biodiversity and conservation value. We work with partners and metres. The reduction was mainly the result of decreased water use
stakeholders to develop robust and credible plans unique to each at the Pearl GTL gas-to-liquids facility in Qatar, and at the Shell Energy
reforestation project. and Chemicals Park Singapore following the decommissioning of some
processing units.
Between January 2022 and the end of 2023, around 292 hectares
had been deforested as a result of our activities. This occurred largely In 2023, for all sites, our overall intake of fresh water increased
in Australia, Canada and Nigeria where reforestation plans have to 162 million cubic metres, compared with 148 million cubic metres
been finalised. in 2022 (restated from 156 million cubic metres, following a review of
the performance data). This increase was mainly the result of increased
Critical habitats production at Shell's Monaca Polymers facility in the USA and
Potential new projects are screened to determine if they are located consequences of a fire incident at our Deer Park Chemicals site, USA.
in a critical habitat. If we decide to proceed with a project that is in
a critical habitat, we develop a biodiversity action plan. This sets out
actions needed to follow the mitigation hierarchy and, where there
is impact, the actions designed to achieve a net positive impact.

At the end of 2023, 43 of our new projects, which started after we

launched Powering Progress in February 2021, were wholly or partly
located in critical habitats. Of these, 20 already have a biodiversity
action plan in place to work towards a net positive impact, compared
with four in 2022.

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Around 33% of our fresh-water intake in 2023 was from public Waste water and produced water
utilities, such as municipal water supplies. The rest was taken from We track low-level concentrations of oil, grease and other
surface water, such as rivers and lakes (around 51%) and groundwater hydrocarbons in water returned to the environment from the day-to-day
(around 16%). Around 94% of our fresh-water intake in 2023 running of our facilities (referred to as "discharges to surface water").
was used for manufacturing oil products and chemicals, with We work to minimise these discharges according to local regulatory
the rest mainly used for oil and gas production. requirements and our own standards.

In 2023, the combined total of hydrocarbons discharged (oil in

effluents) to surface water across all our facilities increased to
1.0 thousand tonnes compared with 0.9 thousand tonnes in 2022.
The increase was partially due to discharges from the Shell Energy
and Chemicals Park Singapore.

In 2023, we disposed of 58 million cubic metres of produced water,

unchanged compared with 2022.

Waste
In 2023, we started to embed the findings from the 24 waste and
circularity assessments we conducted in 2021 and 2022 into local
performance management systems. Our businesses are developing
local waste management implementation plans. We are investigating
options to reduce some of the more significant of our waste streams,
such as biosludge, potentially contaminated soils and drilling fluids.
Assessing further water use reduction goals
In addition to our Powering Progress commitment to reduce We are exploring ways to improve the application of circular economy
water consumption in water-scarce areas, we also aimed to principles and to identify and integrate the risks and opportunities
assess options for further reduction goals. In 2021 and 2022, associated with a "rethink, refuse, reduce, reuse, repair, recycle"
we conducted detailed water use assessments at six major hierarchy. We also work with our supply chain to help our businesses
Shell facilities: progress towards our aim of zero waste.
￮ QGC upstream and QGC midstream, Australia;
￮ Shell MDS, Malaysia;
￮ Shell Hazira LNG Terminal, India;
￮ Shell Energy and Chemicals Park Rheinland, Germany; and
￮ Shell Chemicals Park Moerdijk, the Netherlands.

The results of these assessments, along with discussions with

stakeholders, have moved us towards a more sustainable and
holistic stewardship approach. This goes beyond focusing on
water use and includes aspects of governance and water
quality, involvement of stakeholders and consideration of
catchments. We are now implementing water stewardship
principles across our businesses and developing local
improvement plans. By the end of 2023, we had completed
detailed assessments against these principles at eight of our
downstream and upstream facilities to identify opportunities
for improvement. We plan to roll out this programme across
other facilities and projects in 2024.

Photo: Water testing being carried out at QGC, Australia.

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Mitigation hierarchy

lar economy
Circu
Resource inflow
Materials
Goods and
Recycle
equipment

Repair
Barriers
Our Business 1 Technological
e.g. limited separation of waste Facility and Reuse
Integrated Gas product lifecycle
and Upstream 2 Regulatory
e.g. inconsistencies of policies between countries Circular design
Downstream, Reduce
Renewables and 3 Cultural Retain value
Energy Solutions e.g. high up-front investment costs and Maximise use
low virgin material prices Refuse
Projects & Resource efficiency
Technology 4 Economical
e.g. lack of consumer awareness and weak
cooperation throughout the supply-chain Rethink

Resource outflow
Products
Byproducts and waste
Decommissioning
and restoration

In 2023, we disposed of 631 thousand tonnes of hazardous waste,

compared with 878 thousand tonnes in 2022 (restated from 868
Air quality
thousand tonnes, following a review of the performance data). The
Air quality continues to be embedded in our environmental standards.
decrease was partially because of lower volumes of sour water for
We follow our own standards and those of local regulators to manage
disposal from processing activities at the Shell Scotford Refinery in
airborne pollutants in our oil and gas production and processing,
Canada. In 2023, we disposed of 1,619 thousand tonnes of non-
including emissions of nitrogen oxides, sulphur oxides and volatile
hazardous waste, compared with 1,135 thousand tonnes in 2022.
organic compounds.
The increase was primarily caused by higher volumes of water from
￮ Our sulphur oxide (SOx) emissions in 2023 decreased to 31
production and maintenance activities that required disposal at the
thousand tonnes, compared with 37 thousand tonnes in 2022
Shell-operated Scotford Upgrader (Shell interest 10%), Canada,
(restated from 36 thousand tonnes, following a review of the
and the ramp up of low-carbon solutions and other project work.
performance data). The decrease was mainly because of less
flaring at the Shell-operated Scotford Upgrader in Canada and
In total, we disposed of 2,251 thousand tonnes of waste, compared
the divestment of Shell-operated Upstream assets in Tunisia.
with 2,012 thousand tonnes in 2022 (restated from 1,982 thousand
￮ Our nitrogen oxide (NOx) emissions in 2023 decreased to 88
tonnes, following a review of the performance data). We also sent
thousand tonnes from 93 thousand tonnes in 2022. The decrease
654 thousand tonnes of residual materials for reuse, recycling or use
was partially because of divestments of Shell-operated Upstream
as a raw material in another process. For example, waste that might
assets in Tunisia and the Philippines, and downtime of generators
otherwise go to landfill can be incinerated to generate energy.
at Shell-operated assets in Trinidad and Tobago.
￮ Our emissions of volatile organic compounds (VOCs) in 2023
decreased to 36 thousand tonnes from 37 thousand tonnes in 2022
(restated from 38 thousand tonnes, following a review of the
performance data). The decrease was partially because of planned
and unplanned downtime of operations at Shell MDS, our GTL (gas-
to-liquids) plant in Bintulu, Malaysia.

See shell.com for more information about our approach to biodiversity, circular economy
and plastic waste and water.

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Spills Spills in Nigeria

In the Niger Delta, over the last 13 years, the total number of
operational hydrocarbon spills and the volume of oil spilled from
Large spills of crude oil, oil products and chemicals associated with
them into the environment have been significantly reduced.
our operations can harm the environment, and result in major clean-up
costs, fines and other damages. They can also affect our licence to
Most oil spills in the Niger Delta region continue to be caused by crude
operate and harm our reputation.
oil theft, the sabotage of oil and gas production facilities, and illegal
oil refining, including the distribution of illegally refined products.

In 2023, the Shell Petroleum Development Company of Nigeria Limited

(SPDC) [A], as operator of the SPDC joint venture (Shell interest 30%),
reported nine operational spill incidents of more than 100 kilograms of
crude oil, compared with 10 reported in 2022. The volume of around
0.005 thousand tonnes was less than the 0.01 thousand tonnes
reported in 2022.
[A] Unless otherwise stated, all activities reported for or as relating to The Shell Petroleum
Development Company of Nigeria Limited (SPDC) in this section should be understood as
SPDC acting as the operator of the SPDC joint venture (SPDC JV). SPDC, as the corporate
entity, owns 30% of the JV.

SPDC has an ongoing work programme to appraise, maintain

and replace key sections of pipelines and flow lines to reduce
the number of operational spills. In 2023, around 54 kilometres
of pipelines and flow lines were replaced. This work is organised
Working to prevent spills through a proactive pipeline and flow line integrity management
system. The system installs barriers where necessary, and
We have requirements and procedures designed to prevent recommends when and where pipeline sections should
spills. We design, operate and maintain our facilities with the be replaced to prevent failures.
intention of avoiding spills. To minimise the risk of spills, Shell
has routine programmes to reduce failures and maintain the In January 2024, Shell announced the sale of its Nigerian onshore
reliability of facilities and pipelines. subsidiary, SPDC. Completion of the transaction is subject to regulatory
approvals and other conditions.
Our business units are responsible for organising and executing
spill responses in line with Shell guidelines and relevant legal See the "Upstream" section on page 48.
and regulatory requirements. Our offshore installations have spill
response plans for when an incident occurs. These plans set out
response strategies and techniques, available equipment, and Spills caused by sabotage in 2023
trained personnel and contracts. We can engage specialist In 2023, about 94% of the oil spills of more than 100 kilograms each
contracted services for oil spill response, including vessels, from the SPDC-operated facilities were caused by the illegal activities
aircraft or other equipment and resources, if required, for large of third parties. In 2023, the volume of crude oil spills of more than
spills. We conduct regular exercises that seek to ensure these 100 kilograms caused by sabotage was around 1.4 thousand
plans remain effective and fit for purpose. tonnes (139 incidents), compared with around 0.6 thousand tonnes
(75 incidents) in 2022. The increased number of incidents in 2023 can
We have further developed our ability to respond to spills to be directly attributed to an increase in third-party illegal connections
surface water. We have a worldwide network of trained staff on pipelines, with 119 incidents reported in 2023 compared with 56 in
to help with this. We also have a global oil spill expertise centre 2022. SPDC continues to work with the government security agencies
which tests local capability and maintains our ability to respond to maintain surveillance and address illegal activities of third parties,
to a significant spill into a marine environment. primarily along the SPDC JV pipeline and its operational areas.

Prevention
Photo: Spill response deployment exercise using the AFEDO™ Nozzles,
at offshore Malaysia. In 2023, SPDC continued on-ground surveillance of its areas of
operation, including its pipeline network, to mitigate third-party
interference and ensure that spills are detected and responded
to as quickly as possible.
Spills still occur for reasons such as operational failure, accidents,
unusual corrosion or sabotage and theft. In 2023, there were 70 There are daily surveillance flights covering the most vulnerable
operational spills of more than 100 kilograms each compared with segments of the pipeline network to identify any new spills or illegal
55 in 2022 (restated from 54 operational spills, following a review activity. SPDC has introduced anti-theft protection mechanisms for
of the performance data). The weight of operational spills of oil and key infrastructure such as wellheads and manifolds. The programme
oil products in 2023 was 0.37 thousand tonnes, compared with to protect wellheads with steel cages continues to help deter theft,
0.06 thousand tonnes in 2022. In 2023, 140 spills were caused by and drones have been introduced to inspect pipelines and monitor
sabotage. Of those, 139 were in Nigeria and one in Australia. The security of operations.
number of these spills increased to 140 in 2023 from 75 in 2022, with
the volume also increasing to 1.4 thousand tonnes from 0.6 thousand In 2023, 60 steel cages were installed, bringing the total number
tonnes in 2022. to 374. This includes 52 cages that have been upgraded with CCTV
and 28 with satellite communications. In 2023, out of 508 registered
See "Safety" section on page 134 for more information on emergency response. attempts to compromise these cages, 38 were successful.

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Response and remediation

Regardless of the cause of a spill, SPDC cleans up and remediates Ogoniland: Commitment to the United Nations
areas affected by spills originating from its facilities. In 2023, the time Environment Programme
that SPDC needed to complete the recovery of free-phase oil – oil that SPDC remains committed to the implementation of the 2011
forms a separate layer and is not mixed with water or soil – remained United Nations Environment Programme (UNEP) Report on
at around one week. This is the average time it takes to safely access Ogoniland which assessed contamination from oil operations
a damaged site, initiate containment to prevent further spread of the in the region and recommended actions to clean it up. Over the
spill, and start joint investigation visits with regulators, affected last 12 years, SPDC has acted on all and completed most of the
communities and, in some cases, with NGOs. UNEP recommendations that were specifically addressed to it
as the operator of the joint venture.
Clean-up activities include bio-remediation which stimulates micro-
organisms that naturally break down and use carbon-rich oil as a The clean-up efforts are led by the Hydrocarbon Pollution and
source of food and energy, effectively removing it. Once clean-up Remediation Project (HYPREP), which was established by the
and remediation operations are completed, the work is inspected Nigerian government. The UNEP report had recorded 67 sites,
and, if satisfactory, approved and certified by the Nigerian regulators. of which two were classified as waste sites without hydrocarbon
With operational spills, SPDC also pays compensation to affected pollution. Also, for 13 sites, the National Oil Spill Detection and
people and communities. Response Agency (NOSDRA) certified that - in contrast to the
original report - remediation was not needed.
SPDC has been working with the International Union for Conservation
of Nature (IUCN) since 2012 to enhance remediation techniques and This left 52 sites to be remediated, with all completed sites to
protect biodiversity at sites affected by oil spills in its areas of operation be certified by NOSDRA. In 2021 and 2022, remediation was
in the Niger Delta. Based on this collaboration, SPDC has launched completed for 18 sites, and certification issued for 13 of those.
further initiatives to help strengthen its remediation and restoration In 2023, remediation of one site and certification of three sites
efforts. In 2021, SPDC, IUCN, the Nigerian Conservation Foundation, was completed, and work on the remaining sites continues.
and Wetlands International began working together as the Niger Field work commenced on 17 sites and remediation plans
Delta Biodiversity Technical Advisory Group (BTAG), which continues are being developed for the remaining 15 sites.
to monitor biodiversity recovery at remediated sites.
The UNEP report recommended creating an Ogoni Trust Fund
SPDC also works with a range of stakeholders in the Niger Delta (OTF) with $1 billion capital, to be co-funded by the Nigerian
to build greater trust in spill response and clean-up processes. For government, SPDC JV, SPDC (30% interest in SPDC JV) and
example, local communities participate in remediation work for other operators in the area. The SPDC JV is responsible for
operational spills. Various NGOs have sometimes gone on joint contributing $900 million to the OTF, the Nigerian government
investigation visits with SPDC, government regulators and members and other operators for contributing $100 million. By the
of affected communities to establish the cause and volume of oil spills. end of 2023, SPDC had fully paid its share of the SPDC JV's
commitments to the clean-up process which brought the
SPDC has continued to raise awareness of and counter the negative total contribution to the OTF to $751 million.
effects of crude oil theft and illegal oil refining, both causing oil spills.
Examples include awareness and education programmes, community- Although remediation works continue to make progress,
based pipeline surveillance and promoting alternative livelihoods challenges remain. These include re-pollution, land disputes,
through Shell's flagship youth entrepreneurship programme, environmental issues such as flooding caused by excessive
Shell LiveWIRE. rainfall, and security issues in Ogoniland.

UNEP continues to monitor the progress of the clean-up through

its observer status at HYPREP´s Governing Council and the
Ogoni Trust Fund. UN agencies, such as the United Nations
Development Programme and the United Nations Institute for
Training and Research, provide services to HYPREP in the areas
of livelihood programmes, training and project services.

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Bodo clean-up
In 2015, SPDC and the Bodo community in Ogoniland signed
a memorandum of understanding (MOU), granting SPDC access
to begin cleaning up areas affected by two operational spills that

process
occurred in 2008. The MOU also provided for the selection of
two international contractors to conduct the clean-up under the
oversight of an independent project director. Engagement with the
Bodo community and other stakeholders began in 2015, and was
managed by the Bodo Mediation Initiative. The clean-up project
was delayed in 2016 and for most of 2017 because access to
the sites was challenged by the local community.

In September 2017, a three-phase clean-up and remediation

programme started:
￮ Phase 1: Removal of oil from shoreline surfaces and mud
flat beds was completed in 2018.
￮ Phase 2: Remediation activities related to soil and sediments
started in late 2019 on the around 1,000 hectares designated
for clean-up. By the end of 2023, work on around 88% of that
area had been completed. In late 2022, the work had to be
suspended because of safety concerns and community unrest.
Work resumed at the end of 2023, following a dispute
resolution process and continues into 2024.
￮ Phase 3: The replanting of mangrove seedlings started in 2021.
Around two million seedlings need to be planted and survive to
2025 to fulfil the project's goal. By the end of 2023, the number
of seedlings planted remained at 340,000, the level reached
at the end of 2022, because of community unrest.

Photo: A shoreline clean-up and assessment technique (SCAT) team at work.

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Powering lives

Powering
lives
We power lives
through our products
and activities, and
by supporting an
inclusive society.

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Powering lives continued

Introduction We aim to become one of the world's most diverse and inclusive
organisations, a place where everyone feels valued and respected.
Shell is dedicated to making a positive impact on people around the
Our core values of honesty, integrity and respect for people underpin
world — by providing the vital energy people need, championing
our approach to diversity, equity and inclusion. Shell is committed to
inclusion, respecting human rights and contributing to local
respecting human rights as set out in the UN Universal Declaration of
communities and economies.
Human Rights and the International Labour Organization Declaration
on Fundamental Principles and Rights at Work.

The importance of respecting people also extends to our suppliers.

Shell's Supplier Principles outline our expectations for business integrity,
including safety, security, labour and human rights, and environmental
and social performance. We expect all suppliers to understand and
implement the principles in their supply chains when working with Shell.

Governance
Respecting people has been integral to the way we do business for
many years. Shell's HSSE & SP Control Framework sets out how we
identify, assess and manage our impacts on communities where we
operate, including any impact on human rights. The Framework also
defines how we should share the benefits arising from our presence,
such as by providing local employment and contractual opportunities.

We are transitioning from the HSSE & SP Control Framework to our

new Safety, Environment and Asset Management Standards (SEAM)
as part of the Shell Performance Framework. The SEAM Standards
will come into effect from mid-2024.

See "Living by our values" on page 139.

Around 760 million people [A] in the world have no electricity and
over half the world population has insufficient energy to lead a good As part of our aim to become one of the most diverse and inclusive
life [B]. We deliver energy commercially, by investing in businesses that organisations in the world, our CEO and Executive Committee are
supply energy access in emerging markets; and socially, by investing accountable for our progress against our diversity, equity and
funds, expertise and resources in access to energy programmes. inclusion goals.
[A] International Energy Agency, SDG7: Data and Projections, 2023.
[B] UN Human Development Index. Approximately 75 GJ final energy per capita is the
threshold where populations reach 0.8 on UN Human Development Index which can
be considered a good life.

We also want to help communities benefit from having us as their

neighbour. We generate jobs, pay billions in tax each year and
support start-ups, local businesses and education programmes. And we
promote human rights in the communities, companies and organisations
we work with. This includes activities such as advancing worker welfare
and shaping an inclusive world so that everyone can be themselves.

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Contribution to society Social investment

Our activities contribute to economies through taxes, jobs and business
opportunities. We also make social investments in areas determined by
Shell's businesses are part of society and contribute to it by buying and
local community needs and priorities. These investments are sometimes
selling goods and services in many countries. Our employees, suppliers
voluntary, sometimes required by governments, or part of a
and contractors are part of the local communities where we operate.
contractual agreement. Through voluntary initiatives, we work with
Our activities generate revenues for governments through the taxes
partner organisations to help individuals and communities access
and royalties we pay and the taxes we collect on their behalf. This
reliable electricity. In 2023, we continued to develop programmes to
helps governments fund health care, education, transport and other
improve access to energy in Nigeria, Pakistan, India and South Africa.
essential services.
In 2023, we spent almost $198 million on social investment, of
Payments to governments
which 35% was required by government regulations or contractual
In 2023, Shell paid and collected $67 billion in taxes* to
agreements. We spent the remaining $128.3 million (65%) on
governments. We paid $14 billion in corporate income taxes and
voluntary social programmes.
$6 billion in government royalties, and collected $47 billion in excise
duties, sales taxes and similar levies on our fuel and other products
on behalf of governments. 2023 Social investment spend by theme
h i j
Supply chain engagement 2% 1% 1%
a Required social investment
We continue to explore how we can source responsibly in our supply g
b Community development
chain. In 2023, our operated and non-operated ventures spent around f 6%
c Education
$48.6 billion on goods and services from suppliers around the world*. 6%
a d Energy access
35% e Community skills and
Shell aims to work with suppliers, including individual contractors, that e
enterprise development [A]
behave in an economically, environmentally and socially responsible 10%
f Other
manner, as set out in our Shell General Business Principles and Shell
g Disaster relief
Supplier Principles. In 2023, we worked with around 25,000 d h Biodiversity
suppliers globally. 11% i Health
j Road safety
Our standard contract terms require adherence to these or equivalent c b
13% 15%
principles, and require contractors and suppliers to:
￮ protect the environment in compliance with all applicable
environmental laws and regulations; [A] CSED – Community Skills & Enterprise Development.

￮ use energy and natural resources efficiently; and

￮ continually look for ways to minimise waste, emissions and Around $84.8 million of our total social investment spend in 2023
discharge from their operations, products and services. was in countries that, according to the UN Development Programme's
Human Development Index 2021, have a gross national income
Helping our suppliers decarbonise of less than $15,000 a year per person.
We continually work with our suppliers to find ways to reduce
greenhouse gas emissions across our supply chains. We seek 2023 Social investment spend by region
to understand their energy needs and jointly identify potential
g
low-carbon solutions that are economically sustainable. This f
2%
involves using digital technology to establish transparency in 9%
energy consumption and emissions throughout our supply chain. e a Sub-Saharan Africa
a
12%
38% b USA and Canada
See our website shell.com for more information about how we engage with c Europe and CIS
contractors and suppliers. d Global
d e Middle East and North Africa
12% f Asia Pacific
* Non-GAAP measure (see page 365).
g Latin America
c
13% b
14%

See our website shell.com for more information about our social investment.

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Engaging with communities In 2023, we increased the number of sites with a community feedback
We engage with communities as part of our approach to managing mechanism aligned with the effectiveness criteria of the UN Guiding
human rights and providing access to remedy. Shell's HSSE & SP Principles on Business and Human Rights from 16 to 20. Several more
Control Framework helps us to operate responsibly and avoid or sites have other procedures in place for gathering feedback. In 2023,
minimise potentially negative social impacts of our operations. When we received feedback at 80 sites in 26 countries.
we divest assets or exit areas, we apply well-established processes to
guide our risk assessment with the aim of leaving a positive legacy. See our website shell.com for more information about our work with communities.

The requirements are supplemented by guidance that helps

practitioners on the ground to engage with communities around our Human rights
operations. Major projects and facilities operated by Shell have a Human rights are fundamental to Shell's core values of honesty,
social performance plan for managing potentially negative impacts, integrity and respect for people. Respect for human rights is embedded
such as noise pollution, and maximising benefits, such as using in the Shell General Business Principles and our Code of Conduct. Our
local suppliers. These plans typically begin with defining the social approach is informed by the UN Guiding Principles on Business and
environment, focusing in particular on people who may be especially Human Rights. We work closely with various organisations to improve
vulnerable to the potential impacts of our operations. In the larger how we apply these UN guiding principles.
of these major projects and facilities, we implement a community
feedback mechanism for listening and responding to questions Salient human rights
and resolving complaints in a timely manner. In 2023, we continued to work on salient human rights issues (salient
human rights are those that are most at risk from our operations).
We have specific requirements to avoid, minimise or mitigate potential We prioritise four focus areas where respect for human rights is
impacts on the traditional lifestyles and cultural heritage of Indigenous critical to how we operate: the workplace including labour rights,
Peoples. We also have specific requirements to avoid, minimise or supply chain, communities and security.
mitigate their involuntary resettlement.
Shell employees working in these focus areas need to complete
Since 2020, we have used our online community feedback tool mandatory human rights training. About 1,750 employees had
to track and respond to questions, complaints and feedback that completed the training between its launch in 2021 and the end
we receive. It allows our network of 148 community engagement of 2023, 94% of those assigned the training. We encourage
practitioners to document feedback and outcomes. They are the all employees to complete the course, regardless of their role,
face of Shell in the communities and act as a bridge between to build greater understanding of human rights across Shell.
communities and our activities.
See the table below for examples of our salient human rights
issues in each focus area.

Human rights focus areas

At the In supply In In
workplace chains communities security

Salient Health and safety Labour rights in our Social impact Human rights impact on
issues Discrimination supply chains, e.g. management communities by private
prevention of forced Vulnerable persons/ security and/or
Decent living government security
labour, access to remedy communities
conditions in worker forces we rely on
accommodation Safe and healthy Land access, livelihoods
working conditions and cultural heritage Security of employees
Access to adequate and contract staff in
and readily available Decent living conditions Engagement and access
high-risk environments
channels to voice in worker to remedy
where we work
concerns accommodation

For each of these areas, we have systems to identify potential impacts We also continue to track emerging human rights and environmental
and to avoid and mitigate them. due diligence legislation, and advance our efforts to strengthen human-
rights-related controls in our supply chain.
For example, Shell's HSSE & SP Control Framework contains
requirements that set out how we identify, assess and manage our Critical habitats and people
impacts on communities where we operate, including any impact We assess the potential impacts of our activities to manage and
on human rights. reduce any adverse effects they may have on the environment and
on communities. We apply stringent standards across all our projects
Our Shell Supplier Principles state that we expect our contractors and facilities, particularly when we operate in critical habitats that
and suppliers to respect the human rights of their workforce and are rich in biodiversity and in areas of cultural significance or close
to manage the social impacts of their activities on Shell's to local communities, including Indigenous Peoples.
neighbouring communities.
See our website shell.com for more information about our approach to human rights.

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Our people Changes in headcount

In Shell companies, excluding portfolio companies, headcount rose
to 84,000 at the end of 2023 from 79,000 at the end of 2022 due
Our people are essential to the development of energy solutions
to growth in Information and Digital Technology, and Downstream,
for today and tomorrow. They are key to delivering Shell's Powering
Renewables and Energy Solutions.
Progress strategy and we believe in helping them to develop their
skills. We aim to become one of the world's most diverse and inclusive
As we continue to implement our Powering Progress strategy, in Shell's
organisations, a place where everyone feels valued and respected.
portfolio companies which maintain their own HR systems, headcount
rose to 19,000 at the end of 2023 from 14,000 at the end of 2022.
All metrics throughout this section exclude the employees in portfolio
This was partly driven by acquisitions and growth in Downstream,
companies, except for the metrics reflecting total employee number
Renewables and Energy Solutions.
by gender and region, percentage of women employees, and
certain mandatory training courses.
See Note 32 to the "Consolidated Financial Statements" on page 315 for the average
number of employees by business segment.
Employee overview
We employed 103,000 people on a full- or part-time basis at the end of
2023. This compares with 93,000 at the end of 2022 and 83,000 at the The table below presents the total employee number by gender
end of 2021. The data include people working in Shell subsidiaries, Shell- and region.
operated joint ventures and those seconded to non-Shell-operated joint
operations, or ventures and associates. The employee numbers for 2021 Number of employees by gender and region
reflect headcount in the Shell HR system and full-time equivalent numbers
for portfolio companies, which maintain their own HR systems. Thousand
Additionally, Shell businesses utilise contractors on certain projects during 2023 2022 2021
the year. For example, in 2023 contractors worked alongside Shell Men Women Total Total Total
employees in divisions such as Information and Digital Technology.
Number of employees 67 36 103 93 83

In 2023 Breakdown by region

Africa 2.6 1.0 4 4 4

Employees Asia 22.9 15.1 38 32 30

103,000 Europe 20.0 11.1 31 30 27
employees at December 31, 2023 North America 17.8 6.4 24 23 18
Oceania 2.5 1.2 4 3 2
Countries and territories
South America 1.4 0.8 2 1 2
>70
countries in which we operate
The table below presents the number of employees by age group.
Directors
42% Number of employees by age group [A]
women on the Board of Directors
Thousand
2023 2022 2021
Executive Committee
43% Under 30 years old 12 11 10
women on the Executive Committee Between 30 and 50 years old 54 51 50
Above 50 years old 18 17 17
Senior leaders
[A] Excludes employees in portfolio companies.
32%
women in senior leadership positions
The table below presents the distribution of employee contract type,
by gender and region.
Women employees
35% Employee contract type by gender and region [A]
women employees
Permanent Contract/
Employment at-will [B] Fixed-Term Contract
Training
295,000 Men Women Men Women
Training days for employees and joint-venture partners Number of employees 54,074 28,502 941 432
Breakdown by region
Experienced hires Africa 4% 3% 9% 18%
9,209 Asia 37% 43% 33% 37%
people joined Shell (38% women, 62% men)
Europe 32% 35% 51% 41%
North America 22% 15% 2% 1%
Graduate hires
Oceania 3% 2% 5% 3%
460
people joined Shell (40% women, 60% men) South America 2% 2% — —

[A] Excludes employees in portfolio companies.

[B] Employment at-will is used in the USA to describe employment contracts.

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Shell aims to be an attractive employer to its existing and prospective

employees. We offer employees the opportunity to develop their
careers within Shell, including rotations across different parts of
the business to grow their skills and progress.

In 2023, 11.2% of Shell employees were promoted compared with

14.3% in 2022.

Shell's turnover in 2023 was 5.7%; 4,685 employees left Shell of which
2,669 resigned voluntarily. This compares with 8.5% in 2022, during
which 6,630 employees left Shell of which 3,942 voluntarily.

Employee engagement
Insight into employee needs and perspectives enables Shell to
continually learn and improve our policies, processes, and practices.

Management regularly engages with employees through elected

The Shell People Survey
employee representatives and a range of local formal and informal The Shell People Survey is one of the key tools we use to
channels. These channels include webcasts and all-employee messages measure employee engagement, motivation, affiliation and
from our CEO and other senior leaders, as well as town halls, team commitment to Shell. We believe that increased employee
meetings and site visits by the Board and EC. engagement can result in better business performance and
improve safety. In 2023, the response rate to the survey was
In 2023, members of the Board and EC visited certain Shell sites in 88% (from 87% in 2022). The average employee engagement
Canada where they engaged with employees on our strategy and the score remain unchanged at 79% from the 2022 level, which is
energy transition. Shell plc's Chair, Sir Andrew Mackenzie, also met with top quartile in comparison with external benchmarks. This score
Shell employees on his site visits to the Netherlands, China and Germany. suggests that, overall, our people are engaged, enjoy their work
and are loyal to Shell. This number excludes scores from our
See "Workforce engagement" on pages 170-171.
joint-venture partners who participated voluntarily in the Shell
People Survey.

We seek to comply with applicable local laws and regulations,

including on working hours. We aim to eliminate discrimination in Employee well-being
employment, forced labour and child labour. We respect the right to Shell provides competitive remuneration with a range of benefits,
collective bargaining and freedom of association. Where appropriate, such as global minimum maternity leave of 16 weeks and at least
engagements take place with union representatives at asset and eight weeks' paid parental leave for non-birthing parents.
country level, as well as with the Shell European Works Council.
Financial well-being
Employees have access to senior leaders, local employee forums Shell's remuneration is designed to be market competitive and free
and employee resource groups. These engagements enable Shell to from bias. We aim to ensure equal pay for equal work. Through
maintain a constructive employee and industrial relations environment. regular benchmarking, Shell's compensation is typically higher than
the minimum wage level observed locally, including in countries without
Team leadership plays a key role in driving employee engagement. legislation on minimum wage. Pay adjustment at Shell is directly linked
We seek to develop leaders through learning programmes, domestic to performance management. The system is shared transparently with
and international assignments, and project opportunities. In 2023, 22% all employees to help them understand how their pay adjustments are
of team leaders in Shell received access to Shell's leadership learning made annually. We continue to engage employees transparently and
programme, LEAD. Our mindset and behaviours, which emphasise openly about our pay policies to help build understanding, trust, and
psychological safety, are at the heart of our leadership programmes. confidence in our approach.

We aspire to equip our employees with skills and experience through Flexible work
the digital and energy transition. People development is a priority at We seek to build a sense of community and collaboration within
Shell. Learning and development is part of our organisational culture Shell's sites where we want employees to feel welcome and valued.
and budget planning. Training courses are accessible to all employees, By enabling people to balance their work and personal lives, we can
either online or in person. In 2023, 295,000 formal training days were help them perform at their best. Our Future of Work guide advises
delivered to employees and joint-venture partners. This compares with employees and team leaders on hybrid working options. Shell offers
266,000 training days in 2022. to meet both business and personal needs.

We aim to equip our employees with the skills they will need for Physical, social, and mental well-being
digitalisation and the energy transition, and we have increased the Our goal is to empower our employees to feel their best and perform
learning offerings available for new skills. In 2023, around 6,900 Shell at their best. We do this by promoting mindsets and behaviours
employees completed courses on topics such as hydrogen production, that support good health, by protecting our people from illness by
carbon capture and storage, and energy management. This is an mitigating known risk factors. We do this by using evidence-based
increase from 4,000 in 2022. Where appropriate, we recruit talent tools, and by providing access to timely support and care for those
externally to add to the skills and experiences of our workforce. who are injured, ill or struggling.

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Interventions to promote mental, physical, and social well-being are Gender

delivered via a mix of measures. For example, through the design of our We strive for gender equality and we have signed the World Economic
workspaces, through benefits offerings such as gyms and health checks, Forum declaration on closing the gender gap in the oil and gas sector.
and through our country-based employee networks, group activities We have also endorsed the Catalyst CEO Champions for Change
and events. Our global campaigns, such as Care for Self and I'm Not initiative for the advancement of women, especially those from ethnic
OK, develop individual and team well-being skill sets, to create healthy minorities, into senior leadership and board positions.
and psychologically safe working environments, and to nurture a
culture of care. In line with the UK Listing Rules, the Board of Shell plc aims for gender
balance on the Board, with at least one senior board position [A] held
Mental well-being by a woman. To provide flexibility for periods of change, we aim to
At Shell we strive to reduce the stigma related to mental ill health maintain the representation of both men and of women at, or above,
through open conversations, global and country-level campaigns, a minimum of 40%. As of December 31, 2023, women made up 42%
senior leader communications, engagements with elected employee of the Board with one senior board position, the CFO role, held by
representatives and through our experience-sharing portal for a woman.
employees. This commitment is underscored by the CEO's signing [A] Senior board position means Chair, CEO, Senior Independent Director, or CFO.
of the Global Business Collaboration for Better Workplace Mental
Health Pledge in January 2023. Over the years, Shell has progressively improved the representation
of women on the Executive Committee and in senior leadership roles.
The table below shows the representation of women at December 31,
Global Mental Well-being Programme 2023. As of January 1, 2024, we have more women than men on our
In November 2023, Shell launched its Global Mental Well- Executive Committee, at 57%.
being Programme following a successful pilot in 2022. The
programme's interventions have a strong focus on developing Level 2023 2022
a workplace culture that supports good mental health, and the
Women on Board 42% 55%
voluntary survey enables employees to voice their experience
of well-being in Shell. The data are anonymous and provide KPIs Women on Executive Committee 43% 22%
to report on progress and to identify opportunities to continually Women in Senior Leadership roles [A] 32% 30%
improve employee well-being.
[A] Senior Leadership is a Shell measure based on compensation grade levels. Shell is working
towards achieving 35% representation of women in our senior leadership positions by
2025, and 40% by 2030. This measure is distinct from "senior manager" as per statutory
disclosure requirements set out in the table below.
Diversity, equity and inclusion
We have set clear goals for diversity, equity and inclusion (DE&I) and
Gender diversity data (at December 31, 2023)
monitor these on a regular basis. Our CEO and EC are accountable for
progress. We also continually assess our culture and staff engagement Gender diversity data Men Women
through tools such as the annual Shell People Survey. Detailed
Directors of the Company 7 58% 5 42%
information on progress against our DE&I aspirations can be found
on shell.com/DEI. Senior managers [A] 806 66% 410 34%
Employees (thousand) 67 65% 36 35%
Shell employees and contractors are required to complete two
[A] Senior manager is defined in section 414C(9) of the Companies Act 2006 and,
mandatory training courses on DE&I: Conscious Inclusion and Respect accordingly, the number disclosed comprises the Executive Committee members
in the Workplace. These reinforce expected behaviours for a respectful, who were not Directors of the Company, and other directors of Shell subsidiaries.
inclusive workplace, and build our stance against discrimination and
harassment, including bullying and sexual harassment. Employees and Shell seeks to increase the overall representation of women in the
contractors are required to take these two courses every two years. organisation. As of December 31, 2023, 35% of Shell employees were
women. Of the experienced hires who joined Shell in 2023, 38% were
In 2023, our Shell People Survey showed a result of 83 points out of women compared with 40% in 2022. Of the graduate hires who joined
100 for all questions relating to DE&I. This was unchanged from 2022 Shell in 2023, 40% were women compared with 49% in 2022.
and suggests that overall our people feel that Shell is a workplace in
which they belong and have equal opportunities to progress and grow. A crucial element of improving gender balance is addressing any
The result indicates that our people believe they are provided with a gender pay gap and we continue to work towards improvements in this
safe and inclusive work environment. We will continue to focus on area. We conduct an annual global gender pay equity review using a
improving our DE&I efforts as we strive to improve our result further. robust statistical approach. In 2023, countries in this review included
Australia, Brazil, Canada, China, France, Germany, India, Malaysia,
As of December 31, 2023, 89% of Shell employees now have the the Netherlands, Nigeria, the Philippines, Poland, Qatar, Singapore,
option to voluntarily declare their gender identity, sexual orientation, South Africa, Thailand, Turkey and the UK.
race and ethnicity, and disability where relevant and legal, via Shell's
HR system. Data from this self-identification initiative (self-ID) allow us For example, in the UK, we continue to make progress to close the gap.
to monitor progress against our DE&I aspirations. In 2023, the mean gender pay gap of all men and women across all
in-scope [A] Shell companies in the UK is -3.7% to 18.7%, compared
with 11.7% to 20.7% in 2022.
[A] Shell companies in the UK with 250 or more employees in line with UK government
requirements on gender pay gap reporting.

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Powering lives continued

In parallel, the mean gender bonus gap ranged from -11.3% to 57% Employee ethnic diversity – UK
in 2023. This gap exists for several reasons, including fewer women in
senior leadership positions and fewer women in higher-paid specialist e
roles. More information about the UK gender pay gap at Shell can 3.1% a
15.4%
be found on our website.
b a Asian
Race and ethnicity 3.9%
b Black
We are working to address racial inequity and create an inclusive c 2.4% c Mixed
work environment where everyone feels valued. In 2020, we d White
created the Shell Global Council for Race supported by a 20-member e Other ethnic
Employee Advisory Board composed of members from a diverse mix minority background
of racial and ethnic backgrounds. The council, which is sponsored by d
the CEO, aims to advance diversity in our workforce so that it better 75.2%
reflects communities where we work and from which we draw talent.
The council focuses on the USA, the UK and the Netherlands.
The graphic chart above shows the ethnic diversity of Shell employees
Shell aims to maintain or exceed having at least one Board member
in the UK based on self-identification data provided by employees.
from an ethnic minority background, acknowledging that in periods of
As ethnicity declaration is voluntary, our ethnicity declaration rate is
Board change this balance may not be achieved. As of December 31,
not 100% and all calculations are based on a declaration rate of 83.1%
2023, the Board had three members from an ethnic minority group. In
in the UK. The 16.9% of our workforce who have not provided data
addition, one of Shell's EC members identifies as being from an ethnic
or have chosen not to declare their ethnicity were not included in
minority group. In support of the 2023 Parker Review
our calculations
recommendations, Shell aims to achieve 15% ethnic minority group
representation in its Senior Management by 2027 [A].
In addition, Shell in the UK voluntarily publishes its ethnicity pay gap
[A] As per the 2023 Parker Review, "Senior Management" refers to EC and senior managers
data and the steps it is taking to close the gap annually. This includes
who report directly to them and "ethnic minority" refers to an individual who self-identifies a recruitment ambition of 8% Black representation in graduate and
as Asian, Black, Mixed/multiple, or other ethnic minority group, in line with the UK ONS experienced hires by 2025, in line with UK society.
classifications.

Due to local restrictions with ethnicity data collection and reporting, See the Shell UK Diversity Pay Gap Report 2023 on shell.co.uk.
Shell offers employees the option to voluntarily declare their ethnicity
via the Self-Identification (Self-ID) initiative [A].
In the Netherlands, we are implementing our Ethnic Inclusion Plan
[A] Ethnicity declaration is voluntary and collection of relevant data that is aligned to the UK
ONS classifications is not available in all countries. which includes initiatives to raise awareness and to promote voluntary
disclosure of Self-ID data. In 2023, we also recruited 34 new hires
Improving the employee declaration rate via Self-ID continues to be via Shell's Learning Programme for refugee talent in the Netherlands.
a priority as it contributes to building and developing a diverse talent
pipeline at Shell. Shell also works with key suppliers to ensure they understand our
DE&I expectations.
See "Nomination and Succession Committee" on pages 172-176 for our current talent
management and succession process. See our website shell.com for more information on our DE&I progress in the UK, the
USA and the Netherlands.

Shell has reported on its race and ethnicity ambitions in the USA,
the UK and the Netherlands. The graphic below shows the ethnic LGBT+
distribution of Shell employees in the USA as reported to the We are working to advance lesbian, gay, bisexual and transgender
US Department of Labor. plus (LGBT+) inclusion within Shell and the communities where we
work. We promote equal opportunity and aim to create an
Employee ethnic diversity – USA environment where people feel included, regardless of sexual
orientation or gender identity. Our approach reinforces respect for
people and provides psychological safety for our LGBT+ employees.
e Most of our work around LGBT+ inclusion happens at a country level
a
2.2%
14.2%
in line with local policies, laws and regulations. Our Global LGBT+
Inclusion Guidelines, published in 2022, are designed to help country
a Asian teams develop their own plans. Of the 15 countries with an LGBT+
b
9% b Black or employee resource group, 13 are adopting these guidelines in their
African American multi-year plans.
c Hispanic
or Latino
c
d 12.3% d White
62.4% e Other racial
and ethnic groups

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three-year performance period, is used to make long-term share

incentive awards to Executive Directors, Executive Committee members
and Senior Executives.

Under the PSP, 50% of the award is linked to certain indicators

described in "Performance indicators" on pages 29-30, averaged over
the performance period. For 2020, 11.25% of the award is linked to the
free cash flow (FCF) measure and 5% is linked to an energy transition
measure. The remaining 33.75% is linked to the comparative
performance condition. For 2021 and 2022, 10% of the award is linked
to the FCF measure and 10% is linked to an energy transition measure.
The remaining 30% is linked to the comparative performance condition.
From 2023, 12.5% of the award is linked to an organic FCF measure
and 12.5% is linked to an energy transition measure. The remaining
25% is linked to the comparative performance condition, which is
based on two performance measures.
Benchmarking our LGBT+ initiatives
We benchmark our initiatives externally. In 2023, Shell was Under the LTIP award made in 2020, 22.5% of the award is linked
recognised as an "Advocate" in the 2023 Workplace Pride to the FCF measure and 10% is linked to an energy transition measure.
Global benchmark, which is the highest level awarded to The remaining 67.5% is linked to the comparative performance
companies that stand out as clear leaders in LGBTIQ+ workplace condition mentioned above. For 2021 and 2022, 20% of the award
inclusion. In the USA, we have received a 100% score from the is linked to the FCF measure and 20% is linked to an energy transition
Human Rights Campaign Foundation's Corporate Equality 2023 measure. The remaining 60% is linked to the comparative performance
Index and have achieved a top score every year since 2016. condition. From 2023, 25% of the award is linked to an organic FCF
measure and 25% is linked to an energy transition measure. The
remaining 50% is linked to the comparative performance condition,
Disability inclusion and accessibility which is based on two performance measures.
We aim to create an inclusive, psychologically safe and accessible
environment where people with disabilities can excel. We provide Separately, following the BG acquisition, certain employee share
support and adjustments for people with disabilities during the awards made in 2015 under BG's Long-term Incentive Plan were
recruitment process and throughout their careers with Shell, including automatically exchanged for equivalent awards over shares in the
access to educational resources, training programmes, and personal Company. The outstanding awards take the form of nil-cost options.
and professional development. In May 2023, we launched a Disability,
Accessibility and Inclusion Portal providing comprehensive guidance Under all plans, all shares that vest are increased by an amount equal
and tools for line managers, leaders, people with disabilities and to the notional dividends accrued on those shares during the period
employees to be active allies. Shell's enABLE employee resource from the award date to the vesting date. In certain circumstances,
groups provide expertise and advice to Shell leaders and our awards may be adjusted before delivery or be subject to clawback
businesses on accessibility and disability inclusion. We also offer after delivery. None of the awards results in beneficial ownership
a workplace accessibility service which covers 79 locations in until the shares vest.
37 countries. The team is supported by functions such as Shell
Health, Human Resources, Real Estate and IT. See Note 27 to the "Consolidated Financial Statements" on page 309.

Shell is part of the Valuable500, which connects 500 of the world's

most influential global businesses to help progress large-scale disability Restricted share awards
inclusion. We are also an active members of the Business Disability Restricted Share Awards (awarded under the Shell Share Plan 2014
Forum and Purple Space. and Shell Share Plan 2023) are free share awards made on a highly
selective basis to senior staff. All shares that vest are increased by
Employee share plans an amount equal to the notional dividends accrued on those shares
We have several share plans designed to align employees' interests during the period from the award date to the vesting date. In certain
with our performance through share ownership. circumstances, awards may be adjusted before delivery or be subject
to clawback after delivery.

See the "Directors' Remuneration Report", pages 191-193 for information about the
Global Employee Share Purchase Plan
share-based compensation plans for Executive Directors.
Eligible employees in participating countries may participate in the
Global Employee Share Purchase Plan. This plan enables them to make
Performance Share Plan, Long-term Incentive Plan contributions from net pay towards the purchase of the Company's
and exchanged awards under the BG Long-term shares at a 15% discount to the market price, either at the start or at the
Incentive Plan end of an annual cycle, whichever date offers the lower market price.
The Performance Share Plan (PSP) and Long-term Incentive Plan (LTIP)
are designed to ensure that remuneration is clearly aligned with Shell's UK Shell All Employee Share Ownership Plan
operating plan and longer-term strategic ambitions. The same measures Eligible employees of participating Shell companies in the UK may
apply to Executive Directors and Senior Management and to a participate in the Shell All Employee Share Ownership Plan, under
significantly broader employee base. which monthly contributions from gross pay are made towards the
purchase of the Company's shares. For every six shares purchased
PSPs are long-term incentives, measured over a three-year performance by the employee, one matching share is provided at no cost to
period, designed to retain key employees and ensure they have a the employee.
greater investment in Shell's future. The LTIP, also measured over a

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Safety

Safety Technology and safety

Safety, along with our core values, underpins our Powering Progress We are establishing connected ecosystems for data gathering, analysis
strategy. We aim to do no harm to people and to have no leaks across and reporting through the digital transformation of our equipment.
our operations. We call this our Goal Zero ambition. Digitalisation helps to automate processes so that they can be
supported remotely, for example, by quickly taking action in the
We seek to improve safety by focusing on the three areas where the event of unsafe situations.
safety risks associated with our activities are highest: personal, process
and transport. We strive to reduce risks and to minimise the potential For example, T-Pulse, an AI-automated safety monitoring solution
impact of any incident, with a particular emphasis on the risks with developed by the Indian company Detect Technologies, uses CCTV
the most serious consequences if something goes wrong. feeds to detect unsafe situations, such as fall and fire hazards. It
identifies and reports real-time safety issues and unsafe behaviours to
Our multi-year process of refreshing our approach to safety for all enable urgent conversations, followed by coaching for improvement.
employees and contractors started in 2020. This approach is rooted
in a consistent focus on human performance. We ask people at Shell Shell started to deploy T-Pulse in 2020, and had installed it at 13 sites
to apply a learner mindset, by which we mean the belief that we can by the end of 2023. By then, it had created alerts for more than
always improve, enhance individual capabilities, learn from mistakes 10,000 situations with potential safety issues. Analysis showed that
and successes, and speak up freely without repercussions. in more than 500 of those situations, an intervention helped to avoid
potential significant harm to people or leaks to the environment.
In practice, our refreshed approach to safety is about enhancing
how we prepare for and conduct high-risk activities by, for example: Personal safety
￮ executing frontline work: build an environment of trust and learning, We continue to strengthen the safety culture and leadership among
strengthen team leaders' coaching and engagement skills, and our employees and contract staff. This aligns with our focus on caring
embed pre-start work preparations such as those developed by for people.
the International Association of Oil & Gas Producers (IOGP);
￮ applying acknowledged industry safety tools: in 2022, we moved When our employees and contractors perform tasks, we expect them
from the Shell Life-Saving Rules to industry-wide Life-Saving Rules so to consider the hazards that could potentially cause serious harm and
that Shell employees and contractors are working on the same basis the effectiveness of the barriers in place to avoid serious harm. We run
to manage risks; and safety awareness programmes, and hold an annual global Safety
￮ using technology and digital tools to reduce exposure, identify Day to give employees and contractors time to discuss safety culture
conditions that may lead to serious incidents and fatalities, and on the frontline, reflect on how to prevent incidents, and how to
enhance learning. improve performance.

It is also about capturing more insights from performance analysis by, In 2023, the focus was on "failing safely", which means we recognise
for example: that people make mistakes and that our barriers need to be capable
￮ using metrics focused on serious injuries and fatalities (SIF) and the of managing the impact of those mistakes to prevent harm.
lessons that we can derive from high-potential incidents and events
that could have led to SIF incidents;
￮ seeking to capture underlying causes and systemic patterns through
incident investigations; and
￮ aiming to embed lessons learned from the above points in training
and instructions for work preparation and execution.

In 2023, we integrated this safety approach into the plans of our

facilities, projects and functions. Many of our non-operated ventures
and companies that are operated by Shell, but not integrated into
our systems, have also chosen to implement elements of our
refreshed approach.

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In 2023, we achieved safe construction, commissioning and start-up of Transport safety

a floating production unit (FPU) for the Shell-operated Vito field (Shell Transporting large numbers of people, products and equipment by
interest 63.1%) in the US Gulf of Mexico. The fabrication of another road, rail, sea and air poses safety risks. We seek to reduce these risks
FPU, Seatrium, for the Shell-operated Whale field (Shell interest 60%) by developing best-practice standards within Shell. We also work with
in the Gulf of Mexico, was completed in 2023 after 12 million hours specialist contractors, industry bodies, non-governmental organisations
without fatality or serious injury. and governments to find ways of reducing transport safety risks.

Process safety Road safety

Process safety management is about keeping hazardous substances In 2023, Shell employees and contractors drove around 464 million
inside pipes, tanks and vessels, and ensuring that well fluids are kilometres on company business. Commercial road transport accounts
contained during construction, interventions (such as maintenance) for most of this but only two of this year's 18 severe motor vehicle
and incidents. Our Asset Integrity and Process Safety Management incidents (SMVIs) occurred during commercial road transport. An SMVI
Principles guide our actions from project design and construction is defined as a motor vehicle incident resulting in a fatality, serious
throughout the life cycle of facilities to keep sites, employees and injury or a rollover of a vehicle. Nine SMVIs occurred during business
contractors safe. travel, two during commercial transport activities and the remaining
seven during on-site operations. There were no road transport-related
Our global standards define our requirements for the identification fatalities in 2023.
of process safety hazards and the design of controls to prevent the
release of the identified hazards. For example, offshore wells must be In 2023, about 30,600 Shell employees and individual contractor
designed with at least two independent barriers in the direction of flow colleagues were identified as driving on work-related business,
to reduce the risk of an uncontrolled release of hydrocarbons. In the and therefore required defensive driver training (DDT). In 2023,
event of a spill or a leak, our standards require the use of independent we launched an internal virtual DDT course to align better with
recovery measures to reduce the likelihood of a release becoming industry partners' approaches.
catastrophic. We regularly inspect, test and maintain these barriers
so that they meet our standards.

Collaboration with industry stakeholders, customers and suppliers is

critically important to achieve our process safety ambitions. We focus
on disciplined delivery of our work processes. At the same time, we
seek to make these work processes more effective through active
learning, a continuous improvement mindset and striving to create
a working environment where everyone feels safe to speak up.

The three core pillars to help improve our process safety

performance are:
￮ to simplify our risk management by standardising our risk
assessment tools and make more use of digitalisation;
￮ to embed human performance factors in frontline work
execution; and
￮ to shift the process safety indicators from lagging to leading
indicators with a greater focus on the risk potential.
Addressing driver fatigue
Falling asleep behind the wheel or being distracted while driving
Preparing for emergencies are amongst the leading causes of road accidents worldwide.
We prepare and practise our emergency response to incidents, such We worked with four universities to identify suitable devices and
as a spill or a fire. This involves working closely with local emergency started deployment in 2020, at the Shell-operated QGC facility
services and regulatory agencies to jointly test our plans and in Australia.
procedures. Shell requires key operating facilities to test their
emergency response preparedness every three years. In 2023, we By the end of 2023, we had installed active fatigue and
held four large-scale emergency response exercises at certain assets distraction detection (AFDD) devices in around 3,380 vehicles
we operate in Trinidad and Tobago, Singapore, the UK and the USA. operated by Shell or our contractors in countries where road
We also supported one large-scale emergency response exercise transport risks are highest. In 2024, we will continue to install
at an asset in Argentina, owned and operated by Raízen, one of AFDD devices in vehicles operated by Shell, including both
our joint ventures (Shell interest 44%). contractor and Shell-owned vehicles. The AFDD devices have
recorded and intervened in at least 130 high-risk fatigue events,
We have set up three regional Emergency Response Leadership preventing what could have resulted in motor vehicle incidents
Councils for the Americas; Asia-Pacific; and Europe, the Middle if the devices had not alerted the drivers.
East, and Africa. The councils bring together experts from different
Photo: Transportation is intrinsic to our business activities.
teams that need to be able to work together seamlessly in case of
emergencies. In 2023, the councils' annual conferences covered
a variety of topics such as business continuity, cyber security,
performance under stress, battery storage emergencies, use Safety at sea
of drones and competence development. At the end of 2023, we managed and operated a global fleet of
25 tankers, liquefied natural gas carriers and the world's first liquefied
hydrogen carrier, the Suiso Frontier.

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Air safety In 2023, senior executives from Shell's 23 major global contractors
In 2023, for Shell-operated ventures, our owned and contracted joined Shell executives in Norway for our annual Contractor Safety
aircraft flew more than 38,000 hours and safely carried more than Leadership workshop. Focus areas of discussion were worker welfare
281,000 Shell employees and contractors to destinations across the and human rights, mental health and technology solutions for safer
world. In addition, remotely piloted aircraft safely completed almost work at the frontline.
3,400 flight hours on surveys, inspections, emissions surveillance, and
security and incident response. Also in 2023, leadership teams from 25 Shell joint ventures and
companies newly acquired by Shell met in the Netherlands to discuss
See our website shell.com for more information on transport safety.
topics such as worker welfare and related industry standards, and
the importance of alignment on safety.

Working with others Contractor safety

We work with contractors and suppliers to help them understand Executives from Shell and our major contractor companies have
our safety requirements. We strive to improve the energy industry's collaborated on Shell's contractor safety leadership (CSL) programme
safety performance by sharing safety standards and experience since 2014. The programme seeks to identify strategies and practical
with other operators, joint-venture partners, contractors and ways to improve a shared safety culture and achieve our Goal Zero
professional organisations. ambition of no harm and no leaks.

Importance of contractor safety for Shell

Goal Zero
No harm. No leaks.

Shell-contractor 23 550,000+ 80m+

safety leadership contractor direct employees exposure
(CSL) companies in (total for all CSL hours
CSL programme members) annually

Contractor 58% Majority of the We want every

safety share of contractor high-risk work contractor that works
management exposure hours in is performed by for us to go home
in Shell Shell-operated ventures our contractors safely every day

Shell ~25,000 $48.6 billion In partnership

supply chain global supplier/ spent on goods with our key
management contractor and services in contractors
companies in 2023 2023 globally

Shell’s Powering Progress

strategy Underpinned by our core values
of honesty, integrity and respect
for people, and our focus on safety.

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Safety performance Security

We are deeply saddened to report that four of our contractor Our operations expose us to criminality, civil unrest, activism, terrorism,
colleagues in Shell-operated ventures lost their lives in 2023 during the cyber disruption and acts of war that could have a material adverse
course of their work for Shell. An additional contractor colleague who effect on our business (see "Risk factors" on page 20). We seek to
was injured in 2023, succumbed to their injuries in February 2024. obtain the best possible information to enable us to assess threats
One contractor colleague in Malaysia died during scaffolding work, and risks.
and one in the Philippines died after a fall from height. Two contractor
colleagues in Nigeria died in a security incident, along with four We conduct detailed threat and risk assessments for our Shell-operated
government security agents. In Nigeria, another contractor venture assets, facilities, business, projects and activities so that security
colleague injured in a tugboat fire incident later passed away. risk mitigations achieve the principles of deter, detect, delay and
respond. Further mitigations include strengthening the security of
These losses have a deep and far-reaching impact on families, friends assets, reducing our exposure as appropriate and using journey
and colleagues. We are determined to learn from these incidents management plans. We also invest in information risk management
and take steps to prevent something similar from happening again. capabilities and crisis management and business continuity measures.
We continue to work closely with our contractors to help build a We learn from incidents, in order to continually improve our security
strong safety culture at the frontline. risk management in Shell.

Several industry safety leadership groups confirm that serious and high- To help us understand the threats, we build strong and open
potential incidents often have different root causes than most lower- relationships with government, law enforcement, military forces,
consequence events. The serious injury, illness and fatality frequency industry peers and specialist security information providers. On
(SIF-F) enables us to focus our investigations on the most serious the basis of these threat assessments, we identify security risks to
incidents. The aim is to collect and analyse relevant, high-quality employees, assets, including information technology equipment, and
data that can help us improve our efforts to prevent serious injuries operations. We then seek to manage the risks so they are as low as
and fatalities. reasonably practicable. Risk mitigation includes strengthening the
security of sites, reducing our exposure to threats as appropriate,
In 2023, the SIF-F was 2.6 injuries and illnesses per 100 million journey management, information risk management and cyber defence
working hours compared with 2.0 in 2022. The SIF-F for 2022 was operations, crisis management and business continuity measures.
adjusted from 1.7 to 2.0 due to a classification change for one injury
after publication in March 2023. The number of serious injuries and We conduct training and awareness campaigns for employees, and
fatalities increased to 12 in 2023 (five fatalities and seven serious injury provide them with travel advice and access to 24/7 assistance while
cases) from nine in 2022. Fatalities in 2023 include one contractor travelling. We consistently verify the identity of our employees and
colleague who was injured in a 2023 incident and unfortunately contract staff, we control physical access to our sites and activities,
died from their injuries in February 2024. and we document access with digital tools. We take steps to have
clear and planned responses to security incidents, so that we are
The number of Tier 1 and 2 operational process safety events in 2023 able to react quickly and effectively if they occur.
decreased compared with 2022. There were 63 incidents reported
during the year compared with 66 in 2022. Shell is a member of the Voluntary Principles on Security and Human
Rights initiative. This is a multi-stakeholder initiative of governments,
For reporting on process safety, in this Report, we combine Tier 1 and 2 extractive sector industries and NGOs that gives guidance on how to
events. A Tier 1 process safety event is an unplanned or uncontrolled respect human rights, while providing security for business operations.
release of any material from a process, including non-toxic and non- Shell implements this guidance across its companies, concentrating
flammable materials, with the greatest actual consequence resulting on countries where the risks of working with state and private security
in harm to employees, contract staff or a neighbouring community, forces are greatest.
damage to equipment, or exceeding a defined threshold quantity.
A Tier 2 process safety event is a release of lesser consequence. In the EC, accountability for security matters sits with the Chief Human
Resources and Corporate Officer.
In 2023, there were zero Level 1 or Level 2 well control incidents in
Shell-operated ventures. A well control incident is defined as a well
set up with less than two barriers in place to protect it against a
release through any potential path.

As part of Shell's learner mindset approach, we investigate serious

incidents so we can understand the underlying causes, including
technical, behavioural, organisational and human factors. We share
what we learn, including with contractors. We implement mitigations
at the site and in the country and business where the incident occurred.
We seek to turn incident findings into improved standards or better
ways of working that can be applied widely across similar facilities.

See our 2023 Shell Sustainability Report for more information about our
safety performance.

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Living by
our values

Our core values of honesty, integrity, and a positive mechanism by data privacy regulators for enabling lawful
data sharing and demonstrating accountability within large corporate
respect for people, as well as our focus groups. The BCRs allow intra-group transfers of personal data without
on safety and sustainability are critical to needing to enter into additional complex intra-group agreements. The
overall objective of the programme is to enable the Shell Group of
our strategy. We are committed to doing companies to collect, handle and manage personal data in a
business in an ethical and transparent way. professional, ethical and lawful manner.

Shell's Chief Privacy Officer serves as the Data Protection Officer (DPO)
Ethics and transparency
under the EU's General Data Protection Regulation (GDPR) and other
Our core values underpin our work with employees, customers,
applicable data privacy laws, except where there is a requirement to
investors, contractors, suppliers, NGOs, the communities where we
have a locally based DPO, such as in China and the Philippines.
operate and others. The Shell General Business Principles, Code of
Conduct and Ethics and Compliance Manual help everyone at Shell
Our staff receive guidance on the requirements in Shell's Ethics and
act in line with our values.
Compliance Manual, on an internal website focusing on data privacy,
training modules where completion is monitored and regular messages
Shell General Business Principles
from Shell leaders on the importance of managing data privacy risks.
The Shell General Business Principles (SGBP) set out our responsibilities
to shareholders, customers, employees, business partners and society.
We monitor new and imminent data privacy legislation and seek to
They set the standards for how we conduct business with integrity,
ensure we have a robust impact assessment process in place for the
care and respect for people. As part of these principles, we commit to
relevant businesses. We design our operations and processes based
contribute to sustainable development, balancing short- and long-term
on relevant data privacy requirements and we build controls into our
interests and integrating economic, environmental and social
processes and practices which cover the handling of personal data.
considerations into our decision-making. All Shell employees and
contractors, and those at joint ventures we operate, are expected to
We maintain a Group-wide incident management process designed to
behave in line with these business principles. The company undertakes
immediately identify and remediate data privacy breaches. The process
a range of activities to help embed the SGBP within the organisation.
also helps us to comply with country-level requirements for reporting
These include training and encouraging people to discuss the dilemmas
breaches. Some of our acquired companies are not yet in full compliance
they face in their work.
with our BCRs. Following assessments for each of those companies,
specific actions are planned and put in place to achieve compliance,
Code of Conduct
with regular updates made on their progress to management.
The Shell Code of Conduct explains how employees, contractors and
anyone else acting on behalf of Shell must behave to live up to our
Anti-bribery and corruption
business principles. It covers safety, anti-bribery and corruption, fair
Shell has rules on anti-bribery and corruption in its Code of Conduct
competition, human rights and other important areas. Shell employees,
and Ethics and Compliance Manual.
contractors and third parties can report any potential breaches of the
Code of Conduct confidentially through several channels, including
We maintain an anti-bribery, anti-tax evasion and anti-money
anonymously through a global helpline operated by an independent
laundering (ABC/AML) programme, with adequate resources, a
provider. We maintain a stringent no retaliation policy to protect any
comprehensive governance structure and established reporting lines.
person making an allegation in good faith.
Staff receive guidance on the requirements listed in Shell's Ethics and
Compliance Manual, an ABC/AML-specific website, training modules
In 2023, there were 2,134 reports to the Shell Global Helpline. Of
where completion is monitored and regular messages from Shell
those, 254 cases were confirmed breaches of the Code of Conduct,
leaders on the importance of managing ABC/AML risks.
278 employees or contractor staff were subject to disciplinary action,
and 66 people were dismissed.
Shell has around 25,000 suppliers worldwide. We offer free training
in anti-bribery and anti-corruption practices to selected suppliers and
Data protection
contractors. This training is available in 14 languages. In 2023, we
Over the last decade, the Shell Group has continued to invest in and
offered training to 131 third-party organisations in 16 countries.
develop a mature and robust privacy compliance programme based
on our Binding Corporate Rules (BCRs). These rules are perceived as

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Antitrust and competition laws Our approach to sustainability

We maintain an antitrust compliance programme with adequate Our commitment to contribute to sustainable development has
resources, a comprehensive governance structure and established been part of the Shell General Business Principles since 1997. These
reporting lines. Staff receive guidance on the requirements listed in principles, together with our Code of Conduct, apply to the way we do
Shell's Ethics and Compliance Manual, an internal antitrust-specific business and to our conduct with the communities where we operate.
website, training modules where completion is monitored and We have embedded this sustainability commitment in our Powering
messages from Shell leaders on the importance of managing antitrust Progress strategy, and our business and decision-making processes.
risks. Staff must understand and comply with the Protect Shell Policy,
which explains Shell's position on managing antitrust risks in Sustainability reporting boundary and guidelines
engagements with parties external to Shell. In response to fast- Data in the Respecting nature, Powering lives, Safety and Living by our
moving external antitrust developments and trends, internal guidance values sections are reported on a 100% basis in respect of activities
is continually being monitored to ensure that it remains relevant. where a Shell company is the operator (unless noted otherwise).
Reporting on an operational control basis differs from that applied for
Compliance in our Trading and Supply business financial reporting purposes in the "Consolidated Financial Statements"
We maintain a Trading Compliance function managed by a Chief on pages 244-316. Find additional information on our environmental
Compliance Officer, as regulated by the UK Financial Conduct and social performance in our 2023 Shell Sustainability Report
Authority (FCA), the US Commodities Futures Trading Commission expected to be published in March 2024.
(CFTC) and the Securities Commission of the Bahamas (SCB)
with adequate resources, including employees and budget; a Our reporting on sustainability follows certain guidelines. For example:
comprehensive governance structure, including mitigating control ￮ As a member of the World Business Council for Sustainable
measures; and established reporting lines. Employees in Shell's Development, we support its updated criteria for membership from
Trading organisation receive clear guidance through the Shell 2022, which include requirements for corporate transparency.
Code of Conduct; the organisation's Trading Compliance Manual ￮ Our reporting is informed by guidelines developed by Ipieca, the
supplemented with specific policies; a specific internal compliance global oil and gas association for advancing environmental and
website; mandatory training modules where completion is monitored social performance across the energy transition.
and additional training sessions. Shell leaders reinforce the importance
of managing compliance and conduct risk in the trading organisation. United Nations Sustainable Development Goals
Shell's Trading Compliance function has a dedicated monitoring and Governments are responsible for prioritising and implementing
surveillance team, which has systems for trade surveillance and approaches that meet the UN's 17 Sustainable Development Goals
monitoring communications. (SDGs). We strive to play our part in helping governments and
societies achieve the SDGs and these were one of the considerations
Trade compliance and sanctions in the development of our Powering Progress strategy. We believe the
We continue to develop and maintain a trade compliance programme actions we take as part of our strategy can help directly contribute
with adequate resources, robust screening protocols, a comprehensive to 13 of the SDGs, while indirectly contributing to others.
governance structure and established reporting lines. Staff receive
guidance on the requirements listed in Shell's Ethics and Compliance Board oversight for sustainability
Manual, a specific website for trade compliance, training modules We describe Shell's overall governance framework on pages 160-161
where completion is monitored and messages from Shell leaders on and provide information on the roles of the Board, its committees, and
the importance of managing trade compliance risks. The effectiveness the Executive Committee. The Sustainability Committee (SUSCO) is one
of the programme is assessed annually (more frequently if necessary) of the four standing committees of the Board of Directors of Shell plc.
and we are continually seeking ways to improve it. The SUSCO's responsibilities are to review the progress of Shell with
respect to sustainability and the non-financial elements of our Powering
Reputation and brand Progress strategy.
We continually assess and monitor the external environment for
potential risks to our reputation. We engage in dialogue with our key
See pages 177-178 for information about SUSCO and its activities.
stakeholders, such as investors, industry and trade groups, academics,
governments and non-governmental organisations to gain greater
insights into societal expectations of the Shell Group of companies. The Annual Report on Remuneration (see pages 194-210) provides
We also take proactive steps when warranted, through legal means details of how the Shell scorecard captures key performance indicators
to protect our reputation from unwarranted accusations. We have for safety, environment and climate.
mitigation plans for identified individual risks at the Group, country
and line of business level. Our country chairs are responsible for
implementing country plans which are updated annually. We
continually develop and defend our brand in line with Shell's
purpose and target our efforts to drive brand differentiation,
relevance and preference.

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HSSE & SP Control Framework When planning new major projects, we conduct detailed
In Shell, health, safety, security, environment, and social performance environmental, social and health impact assessments. We routinely
(HSSE & SP) are vitally important to generating value. They are practice implementing our emergency response plans to potential
indispensable elements of our organisation. We have internal events such as spills or fire, which pose a significant risk. The Shell
standards and a clear governance structure to help manage HSSE & Internal Audit & Investigation team provides assurance on the
SP risks and avoid potential adverse effects. These also help us to HSSE & SP controls to the Audit and Risk Committee.
develop mitigation strategies aimed at ensuring that if an HSSE & SP
risk materialises, we avoid the worst possible consequences and have
ways to remediate any environmental damage. The Shell HSSE & SP Safety, Environment & Asset Management
Control Framework (CF) consists of mandatory manuals, which align (SEAM) Standards
with the Shell Commitment and Policy on HSSE & SP. Guidance Our health, safety, security, environment, and social
documents, assurance protocols, and training materials support the performance standards and governance structure are currently
implementation of the manuals. Our standards describe how key defined in our Health, Safety, Security, Environment and Social
control processes need to be implemented, for example, to help make Performance (HSSE & SP) Control Framework and supporting
production safer and manage the care of equipment. The HSSE & SP guidance documents.
CF applies to every Shell entity and Shell-operated venture. It defines
requirements and accountabilities at each organisational level, setting We will begin transitioning to our new Safety, Environment &
expectations for the management of HSSE & SP risks. We aim to Asset Management (SEAM) Standards, which come into effect
ensure that significant HSSE & SP risks associated with our business from July 1, 2024. This is part of the Shell Performance
activities are assessed and managed to minimise them as far as Framework, which is the overarching framework adopted by
reasonably practicable. Our subject matter experts provide advice Shell to deliver on its strategy. Implementation of migration to
and support businesses to improve HSSE & SP performance. The the SEAM Standards, pursuant to guidance on expectations
applicability of specific HSSE & SP CF requirements to contractors and process, will continue throughout 2024 into 2025.
depends on the defined HSSE & SP risks of the material or services
procured as determined by the contracting Shell entity in the context
of the HSSE & SP CF. Contractors are required, through appropriate
contract provisions, to adhere to either Shell requirements and
standards, or applicable industry standards.

Health, Safety, Security, Environment & Social Performance Control Framework

The HSSE & SP Control Framework defines mandatory standards, requirements and accountabilities.
The framework applies to Shell entities and Shell-operated ventures, including employees and contractors.

Purpose of the manual Scope

Mandatory manuals describe:
Accountabilities and responsibilities Requirements to be met

HSSE & SP
Health Personal Safety
Management System

Process Safety Environment Social Performance

Security Product Stewardship Transport

Contractor HSSE
Projects Resources
Management

Shell Commitment and Policy on Health, Security,

Safety, the Environment and Social Performance

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Assurance Decommissioning and restoration

The Shell Internal Audit & Investigations (SIAI) team is the single Decommissioning is part of the normal life cycle of every oil and gas
independent assurance organisation within Shell. Within SIAI, structure. We work hard to close and dispose of installations in a safe,
the HSSE & SP and Asset Management Assurance team provides efficient, cost-effective and environmentally responsible manner. This
assurance to the Board's Audit and Risk Committee on the includes restoring the surroundings of platforms and facilities in line with
effectiveness of the HSSE & SP CF through an audit programme. relevant legislation, while taking our own standards into account. We
have decommissioning and restoration activities under way in Brazil,
We take care to invest responsibly in the energy transition and screen Brunei, India, the Netherlands, the UK and the USA. We seek to reuse,
investments against multiple criteria. We expect joint ventures not repurpose and recycle materials in decommissioning. At the end of
operated by Shell to apply standards and principles substantially 2023, we reported $19 billion on our balance sheet for current and
equivalent to our own and support them in doing so. We offer to help non-current decommissioning and other provisions.
them review the effectiveness of their implementation. Even if a review
is not conducted, we periodically evaluate HSSE & SP risks faced by See Note 24 to the "Consolidated Financial Statements" on pages 301-302.
the ventures that we do not operate. If a venture does not meet our
HSSE & SP expectations, we seek to improve performance by working
with our partners to develop and implement remedial action plans. Shell invests in innovative decommissioning and restoration
technologies both in-house and by funding third parties. For example,
Divestments in the Netherlands, we have developed technology to deep-clean
When considering divestments, we collaborate with in-house and hazardous contaminants from unused pipelines. This allows us to sell
external experts, where appropriate, to conduct checks and examine the pipelines for reuse, such as piping hydrogen, or recycle them as
key attributes of potential buyers. These attributes may include their part of our ambitions on circularity.
financial strength, operating culture, HSSE policies and approach to
ethics and compliance. We also consider risk management and people See the business sections on pages 41-81 for more information.
management processes and standards, community liaison practices,
and social performance programmes.

Applicable attributes are assessed against Shell's policies and relevant

local regulations. Divestments are often subject to the approval of
regulators, which may in part depend on potential buyers' HSSE
capacity, compliance record and asset stewardship capabilities.

See the section "Risk management and controls" on page 223 for more information.

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Principal decisions and stakeholders

Section 172(1) statement S172(1) (b) "The interests of the Company's employees"
Shell employees are fundamental and core to our business model and
the safe delivery of our strategic ambitions. The success of our business
The Board of Directors, having considered the matters set out in
depends on attracting, retaining, developing and motivating talented
section 172(1)(a) to (f) of the Companies Act 2006 (S172), confirms,
employees. The Directors consider and assess the implications of
in good faith, that the Directors have acted in a way that they
relevant decisions on employees and the wider workforce. The
consider would most likely promote the success of the Company
Directors seek to ensure that Shell remains a responsible employer,
for the benefit of its members as a whole.
including with respect to pay and benefits, fairness (including gender
pay gap reporting, see pages 130-131), diversity (information on Shell's
This S172 statement discloses how the Directors took into account the
Diversity, Equity and Inclusion is detailed on page 130), health and
interests of Shell's wider stakeholders in the Board's decision-making
safety issues, and the workplace environment. The Directors regularly
process. The level of information disclosed is consistent with the size
engage with employees and the wider workforce (a summary of
and the complexity of Shell's businesses and focuses on matters of
engagements is provided on pages 170-171) as well as consider the
strategic importance to Shell.
annual employee survey (the most recent is detailed on page 129).
General confirmation of directors' duties
The Directors recognise that our pensioners also remain important
Shell's Board has a clear and robust corporate governance framework,
stakeholders.
which sets out certain financial and strategic thresholds which need to
be triggered for matters to be considered and approved by the Board.
The corporate governance framework sets out matters reserved for the See "Workforce engagement" on pages 170-171.
Board, delegations to its committees and delegations to the Executive
Directors. The Manual of Authority sets out the delegation and
S172(1) (c) "The need to foster the Company's business
approval process across the broader business.
relationships with suppliers, customers and others"
To deliver our strategy we require strong mutually beneficial
All Directors upon joining Shell have participated in induction
relationships with suppliers, customers, governments, national oil
training and are provided with ongoing guidance covering regulatory
companies and joint-venture partners. Shell seeks to promote and
requirements of their role, including, but not limited to, S172.
apply certain general principles in such relationships. The Board
continues to review Shell's approach to suppliers, which is set out in
When making decisions, each Director ensures that (s)he acts in the
the Shell Supplier Principles. In 2023, the Board reviewed steps taken
way (s)he considers, in good faith, would most likely promote Shell's
with suppliers and supply chains to combat modern slavery and human
success for the benefit of its members as a whole, and in doing so has
trafficking. More detail on Shell's Modern Slavery Act statement is set
regard (among other matters) to the issues set out below.
out on page 220. The businesses continually assess the priorities
related to customers and those with whom we do business, with the
S172(1) (a) "The likely consequences of any decision
Board engaging with the businesses on these topics, for example,
in the long term"
within the context of business strategy updates and investment
The Directors understand the business and both the evolving and
proposals.
challenging environment in which we operate, including the challenges
of the global energy transition. The Board made decisions with regard
The Directors also receive updates on a variety of topics that indicate
to acquisitions, investments and divestments with consideration given
how these stakeholders have been engaged. These updates include
to key stakeholders and the likely long-term impact of any decision.
information provided by the Projects & Technology function on
During the year, the Board reiterated its commitment to Shell's energy
suppliers and joint-venture partners, with respect to items such as
transition strategy and reflected on the challenges to be faced by Shell
project updates and supplier contract management. Businesses also
in the next phase of this strategy, given the shifting macroeconomic and
provide information, as relevant, on customers and joint-venture
geopolitical context. Based on Shell's established purpose to power
partners in relation to business strategies, projects and investment
progress together by providing more and cleaner energy solutions, the
or divestment proposals.
ongoing strategy set by the Board is intended to transition Shell to a
net-zero emissions energy business, purposefully and profitably. We
The CEO provides a comprehensive update to the Board on material
continue to have a strong, resilient business with a focus on energy
business and external developments at each main Board meeting. This
security. We put customers at the centre of our strategy, innovating
includes: i) a report on safety performance; ii) significant operational
the products customers need as they seek to decarbonise.
updates relating to each of the business segments, e.g. partnerships,
investments, divestments, flagship projects, commercial highlights and
In 2023, the Board continued with its oversight of Shell's Powering
achievements; iii) the development of new technologies and innovation
Progress strategy, with four pillars: generating shareholder value,
via collaboration with partners, suppliers and others; and iv) political or
working to achieve net-zero emissions, powering lives and respecting
regulatory developments. The CEO also summarises his own external
nature. The Board focused on financial strength and discipline with a
and internal engagements and any changes of senior executive staff.
dynamic approach to our portfolio of assets and products, details of
which were set out at the Capital Markets Day in June 2023 (CMD23).
See pages 6-13 for more on our Powering Progress strategy.

The Directors recognise there are significant complexities in relation

to Board decision-making, given differing societal and stakeholder
views about our operations and the intricacies associated with the
evolving energy transition. Accordingly, the Directors have considered
S172 and made their decisions in good faith relating to Shell's strategy
having regard for the long-term sustainable success of the Company.

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Section 172(1) statement continued

S172(1) (d) "The impact of the Company's operations Our ambition remains unchanged: achieve Goal Zero, no harm and
on the community and the environment" no leaks across all our operations.
It continues to be integral to our strategic ambitions to reflect on our
impact on the community and the environment. The Board receives To achieve our strategic goals, we need to adapt our mindset and
information on various topics to help it make decisions. The topics can behaviours as we navigate the increasing complexity in the world
include, for example, the net carbon intensity target, proposals to invest around us. At Shell we seek to have a culture that encourages
or divest, and business strategy reviews. The information also goes into the attitudes and behaviour that we believe will help us succeed.
Group-level overviews, such as updates on safety and environment We seek to encourage:
performance, reports from the Chief Ethics and Compliance Officer, ￮ Applying a learner mindset: everyone has the ability to grow,
and reports from the Chief Internal Auditor. In 2023, the Board held learn from mistakes and successes, and speak up openly in a safe
meetings with Shell's in-country stakeholders, which included a staff environment. We encourage curiosity, humility, openness, helping
engagement during the Board's Strategy Days in Canada, as well as each other to make better decisions and create more value;
with the Haisla Nation in, and the Mayor of, Kitimat. This enabled the ￮ Maximising our performance: we collaborate across boundaries
Board to maintain and strengthen its connection with Shell's businesses, and speak up when we see things that can be improved. We enable
staff and other local stakeholders and provided the opportunity to gain people to deliver, and we work in an integrated way with discipline,
a deeper understanding of Shell's reputation, role and contributions clear focus on priorities, and tangible outcomes in order to reach
within the communities where we operate. our full potential;
￮ Increasing trust in Shell: we aim to be a valued member of
See "Understanding and engaging with our stakeholders" on pages 167-169, and in the
the communities in which we operate, and to make a positive
reports of each Board committee.
contribution to society. We seek to listen carefully and with humility
and we have a strong desire to understand, and, where possible,
adapt to the changing needs and expectations of society, especially
S172(1) (e) "The desirability of the Company maintaining as they relate to the environment. We build strong and trusted
a reputation for high standards of business conduct" relationships with customers and partners which are fundamental
Shell aims to meet the world's growing need for more and cleaner to our collective success;
energy solutions in economically, environmentally and socially ￮ Living by our values and Goal Zero: we live by our values and do
responsible ways. The Board periodically reviews and approves clear the right things with respect to ethics, safety, and the environment;
frameworks -- such as the Shell General Business Principles, Shell's and
Code of Conduct, specific Ethics and Compliance manuals, the Ethical ￮ Inspiring and engaging: we aspire to a situation where everyone
Decision-Making Framework and the Modern Slavery Act Statement -- feels connected to what we stand for. We build trusting and effective
to ensure that high standards are maintained in Shell businesses and in teams where everyone feels ownership and has a voice in how work
Shell's business relationships. Complemented by the ways the Board is gets done. We strive to maintain a diverse and inclusive culture.
informed and monitors ethics and compliance with relevant governance
standards, this helps to ensure that Board decisions and the actions The Board considers the Shell People Survey to be an important tool
of Shell companies both promote and maintain high standards of for measuring employee engagement, motivation, affiliation, and
business conduct. commitment to Shell. With consistently high response rates, it provides
valuable insights into employee views. It also helps the Board
S172(1) (f) "The need to act fairly as between members understand how the survey's outcomes are being used to strengthen
of the Company" Shell culture and values.
After weighing up all relevant factors, the Directors consider which
course of action best enables delivery of our strategy in the long-term Stakeholder engagement (including employee
interests of the Company, taking into consideration the effect on engagement)
stakeholders. In doing so, our Directors act fairly as between the The Board recognises the important role Shell has in many societies
Company's members but are not required to balance the Company's and is deeply committed to public collaboration and stakeholder
interests with those of other stakeholders. This can sometimes mean engagement. The Board strongly believes that Shell will only succeed
that certain stakeholder interests may not be fully aligned. by working together with customers, governments, business partners,
investors, and other stakeholders.
Culture
The Board plays an important role in establishing, assessing and Continuing to work together with stakeholders is critical, particularly
monitoring our desired culture and how it is embedded in our values, at a time when we and society, including businesses, governments,
attitudes and behaviours, including in our activities and stakeholder and consumers, face issues as complex and challenging as climate
relationships. The Board has established honesty, integrity and respect change, energy security and affordability.
for people as Shell's core values. The General Business Principles and
Code of Conduct help everyone at Shell to act in line with these values We continue to build on our long track record of working with others,
and comply with relevant laws and regulations. The Shell Commitment such as investors, industry and trade groups, universities, governments,
and Policy on Health, Safety, Security, Environment & Social non-governmental organisations (NGOs) and, in some appropriate
Performance applies across Shell and is designed to help protect instances, our competitors through our joint-venture operations or
people and the environment. Under the industry Life-Saving Rules, we industry bodies. We believe that working together and sharing
have a simplified and standardised approach which adopts a broader knowledge and experience with others offers us greater insight into
risk scope focusing on potential for harm to people, creating a greater our business. We also appreciate our long-term relationships with
sense of individual and team responsibility to avoid fatalities and life- our investors and acknowledge the positive impact of ongoing
changing injuries. In 2023, the focus was on failing safely, which engagement and dialogue.
means we recognise that people make mistakes and that our barriers
need to be capable of managing the impact of those mistakes without
undesirable consequences. The result is a strengthened foundation with
an increased and deliberate focus on human performance, the way
people, work, culture, equipment, work systems and processes interact.

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Section 172(1) statement continued

The guidance on preparing information, proposals or discussion items Principal decisions

for the Board asks for these materials to include considerations of the In the table below, we outline some of the principal decisions made by
views, interests, and concerns of stakeholders and how management the Board over the year. We explain how the Directors have engaged
addressed them. This helps to strengthen the Board's knowledge of with or in relation to key stakeholder groups and how stakeholder
how the broader business undertakes significant levels of stakeholder interests were considered in decision-making.
engagement. Board minutes have also reflected key points on
stakeholder considerations, where appropriate. The Terms of Reference To remain concise, we have categorised our key stakeholders into
for our Sustainability Committee (SUSCO) include, within the seven groups. Where appropriate, each group is considered to include
committee's remit: review and consider external stakeholder both current and potential stakeholders. The groups are:
perspectives on sustainability issues of relevance to the Group's ￮ investor community;
business, and review selected sustainability topics and matters ￮ employees/workforce/pensioners;
of public concern, such as biodiversity and plastic waste. ￮ our customers;
￮ regulators/governments;
The Board also engaged with certain stakeholders directly, to ￮ NGOs/civil society stakeholders/academia/think tanks;
understand their views. The Board draws upon Shell's substantial in- ￮ communities; and
house expertise by periodically receiving input from economics and ￮ suppliers/strategic partners.
policy experts on key political and economic themes, with some
updates being presented to the Board each quarter. Board decisions
We define principal decisions taken by the Board as decisions taken
in 2023 that are of a strategic nature and significant to any of our key
See "Understanding and engaging with our stakeholders" on pages 167-169.
stakeholder groups. As outlined in the UK Financial Reporting Council
(FRC) Guidance on the Strategic Report, we include decisions related
Information on how the Directors have engaged with employees can to capital allocation and dividend policy.
be found on pages 170-171 and in the "Powering lives" section on
page 129. The tables below include examples of how Directors have How were stakeholders considered
considered the interests of Shell employees and the resulting outcomes. We describe how regard was given to the likely long-term
consequences of the decision, including how stakeholders were
considered during the decision-making process.

What was the outcome

We describe which accommodations or mitigations were made, if any,
and how Directors have considered different interests, and what factors
they took into account.

Strategic updates

Powering Progress strategy What was the outcome

Shell's Powering Progress strategy was launched in 2021, and is outlined within this Energy Transition Progress and Strategy
Annual Report. As part of the Board's continuing oversight of strategy, the Directors There are differing views about Shell's ambitions, targets and
receive and discuss regular strategy updates including feedback from stakeholder strategy to become a net-zero emissions energy business by
engagements by management, investors, the media, climate activists and internal staff. 2050. Shell continued its dialogue with its stakeholders on the
progress of its ETS, and the Board recognises the different views
How stakeholders were considered of each Shell stakeholder group. The Board continues to listen,
Energy Transition Progress and Strategy learn and adapt as Shell delivers against its strategy, with
In 2021, Shell also produced a report (the Shell Energy Transition Strategy (ETS)) consideration given to the long-term success of the organisation,
with the aim of helping investors and society obtain a better understanding of how as well as the interests of Shell's customers, shareholders and
Shell is addressing the risks and opportunities of the energy transition. The ETS was wider society. More information on the outcome of discussions
put to shareholders for an advisory vote at the 2021 Annual General Meeting (AGM), following the 2023 shareholder advisory vote can be found
and shareholders also voted on progress against this strategy at the AGMs in 2022 on page 167.
and 2023. In March 2024, the Board approved ETS24. ETS24 will be put to
shareholders for an advisory vote at the 2024 AGM, as part of the continued dialogue Discussions with stakeholders and feedback from those
on this topic. Information on our ETS is included throughout this Annual Report and the engagements were integral to the preparation of ETS24, and
ETS24, which can be found on our website. the Board's approval of this strategy. In this Annual Report and
ETS24, we strive to provide information on Shell's progress on its
At the 2023 AGM, 80.1% of shareholders that voted supported our progress in this ETS, along with our ambitions, targets and the clarifications our
strategy. Both before and after the 2023 AGM, the Chair, CEO and some members stakeholders are seeking.
of the Executive Committee engaged with key stakeholders to understand their
views and opinions on Shell's progress on its ETS. They engaged with our largest
shareholders and offered further opportunities to discuss Shell's progress on its ETS
and to understand the reasons behind various voting decisions. The Chair also had
an opportunity to engage directly with our large institutional shareholders during
his roadshow in September 2023.

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Section 172(1) statement continued

Strategic updates

Insights into Shell's Canadian operations Board Strategy Days

In June 2023, the Board held in-person strategy meetings over the course of three days in Through multiple engagements with stakeholders, the Board:
Canada, providing for a number of engaging and interactive events with both internal and ￮ gained valuable insight into the operations of Shell's Canadian
external stakeholders. A summary of the event is provided on page 162. The key areas of businesses;
focus related to accelerating the energy transition. ￮ built awareness of the local context and risks;
￮ considered geopolitical contexts in connection with the energy
Staff engagements transition and engaged with Shell staff and leaders in Canada;
As part of the Strategy Days, the Board and Executive Committee had the opportunity ￮ considered feedback from a cross-section of Shell's staff on the
to engage and speak directly with staff about their experience within the Shell Canada energy transition;
businesses. For further information on the engagement with our workforce see "Board ￮ considered key external perspectives connected to Shell's
activities" and "Workforce engagement" on page 163 and pages 170-171. energy transition ambitions, targets and strategy; and
￮ discussed core elements of the Powering Progress strategy with
key customers, government officials and other stakeholders in
the region.

Financial strength, cash allocation including shareholder distributions

The Board considered cash flow, the macro environment and business performance in 2023 What was the outcome
against 2022. The Board also considered management's view of the outlook for the Group's In relation to the decisions to increase distributions to
performance, and reviewed the financial framework with specific focus on shareholder shareholders, the Board and management considered the views
distributions. Directors approved several proposals with the aim of delivering value to of stakeholders, the strength of the Company's balance sheet
shareholders and increasing shareholder distributions through a combination of progressive and the need to continue to invest for the future of energy.
dividends and share buybacks. The form and timing for distributions to shareholders were
announced throughout 2023, alongside the publication
How stakeholders were considered of the quarterly results.
A number of considerations underpinned each proposal, with proposals discussed and
reviewed at certain points throughout the year. These considerations took account of the The Board approved updates to the financial framework, which
macro environment, robust business performance and outlook, the strength of the balance were announced at Capital Markets Day on June 14, 2023,
sheet, capital discipline, feedback from advisers and feedback from other stakeholders. including to target distributions to shareholders at 30-40% of cash
flow from operations through the cycle through a combination of
dividends and share buybacks. During 2023, the Board approved
share buybacks of $14.5 billion, and a further $3.5 billion was
announced on February 1, 2024.

Approval of Shell's detailed Operating Plan 2024-2026 (OP23)

The approval of OP23 followed an in-depth review by the Board of proposals on capital What was the outcome
allocation, capital investment outlook, competitive outlook, operating expenses, return on Following extensive review and discussion, the overall
average capital employed, shareholder distributions and alignment with Net Carbon outcome of this decision was an Operating Plan that the
Intensity targets. In the December 2023 Board meeting, OP23 was approved. Board believes is robust against various scenarios and features
strong optionality if needed. In particular, the Board assured
How stakeholders were considered itself that, as these decisions were taken, OP23 flexibly
OP23 discussions included a full review against Shell's Powering Progress strategy, and demonstrated pathways to enable delivery of Shell's
the credibility of meeting and risks to delivery of the near- and long-term targets which near and long term targets.
were set out at CMD23. Meeting commitments made to investors is critical to building
trust and confidence with our external stakeholders. The Directors also considered the We recognise that stakeholder opinions differ on the approach
financial strength of the organisation, the macroeconomic environment, and the continued towards the energy transition. OP23 is based on society's
heightened geopolitical risks as a result of the Russia-Ukraine war, and conflict in the demand for products and services. OP23 also supports Shell in
Middle East. The Directors and Executive Committee balanced the priorities in the financial maintaining a reputation for high standards on business conduct
framework, including capital and operating expenditure commitments towards the energy and health, safety, security, and environment issues. It maintains
transition alongside increased shareholder distributions, maintaining balance sheet strength, the approach to employee remuneration and benefits to
aspired credit ratings and Greenhouse Gas (GHG) target tracking. The plan was discussed pensioners. OP23 also seeks to reward our investors with returns,
extensively and reviewed thoroughly. Responses from investors and discussions with equity a strong balance sheet, capital discipline and maintain the long-
and debt market analysts were also presented to the Board for consideration. The Board term financial strength of the Company to invest in more and
asked questions to the management on the flexibility of OP23 in the event of various cleaner forms of energy and meet the current and future needs
energy transition scenarios. of society.

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Strategic Report | Principal decisions and stakeholders

Section 172(1) statement continued

Investing in new business, acquisitions and divestments, and closures

Over the course of the year, the Board considered and approved new opportunities and What was the outcome
projects and proposed divestments or closures. The Board continued to review Shell's Agreed sale of SPDC
withdrawal from Russian activities. The Board approved the implementation of the strategic intent to
exit onshore Nigerian oil exposure by agreeing to the divestment
How stakeholders were considered of Shell Petroleum Company Limited's 100% equity interest in
The Board considered the impact of decisions related to new business opportunities and SPDC to Renaissance, a consortium of five companies comprising
divesting from existing opportunities in the context of sustainability, supply, regulations four exploration and production companies based in Nigeria and
and carbon intensity. Critically, the Board reviewed the various proposals' alignment with an international energy group. During Board discussions, the
Shell's strategy. Particular focus was given to potential benefits of certain divestments, impact for staff was considered and it was noted that SPDC's
including their potential to: create returns for shareholders; further strengthen the balance staff will continue to be employed by the company as it transitions
sheet; de-risk future cash flow; and avoid significant additional capital investment. As part to new ownership. Board discussions also covered how the
of the discussions, the Board considered the strategic drivers for the intended divestments, divestment aligned with Group strategy, the value of the
including the Scope 1 and 2 emissions of each asset, anticipated regulatory changes divestment, and impact for a number of stakeholders including
expected to lead to value erosion, and any value opportunities afforded by the shareholders. Furthermore, the Board considered how the
macro environment. divestment would contribute to reducing Shell's Scope 1 and 2
emissions and recognised the importance of this step in achieving
As part of each proposal, the respective business unit will undertake effective due no routine flaring, a commitment made at the CMD23.
diligence on prospective purchasers from a financial, reputational, as well as operating
philosophy standpoint to ensure future obligations are met, or suitable mitigating Investment in deep-water Sparta Project
measures are in place, to protect Shell and its people. The Board approved the development of Sparta, a deep-water
development in the US Gulf of Mexico, owned by Shell Offshore
Within each divestment proposal, the Board considered if the Company was being a Inc. (51% operator) and Equinor (49%) The Board considered the
responsible seller of its assets and if the purchasers have the capability to manage our investment in the deep-water project would support sustained
assets/people appropriately. Staff matters are explicitly considered during negotiations liquids production, capital returns and free cash flow delivery
and the due diligence process for acquisitions and divestments. Comprehensive through to 2030 at low GHG intensity. Additionally, the Board
engagement plans are developed as appropriate in parallel to the negotiations. reviewed the assessment that the development opportunity
aligned with CMD23 commitments, alongside consideration for
the project-specific stakeholders and Shell's wider stakeholders.
As part of Shell's intercompany approval process, the following investments/
divestments were discussed and supported by the Board.

Agreed sale of The Shell Petroleum Development Company of Nigeria

Limited (SPDC)
The sale of the 100% equity interest in SPDC to Renaissance Africa Energy Company
Limited (Renaissance). Completion of the transaction is subject to approvals by the
Federal Government of Nigeria and other conditions.

Investment in deep-water Sparta project in the Gulf of Mexico

Development of Sparta, a development opportunity, with Equinor Gulf of Mexico
LLC (Equinor).

Strategic Report signed on behalf of the Board

/s/ Caroline J. M. Omloo

Caroline J. M. Omloo
Company Secretary
March 13, 2024

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