Ben van Beurden - CEO Simon Henry - CFO Harry Brekelmans - Director, Projects and Technology

Irene Himona - Societe Generale Ashley Meyers - Viva Investors Theepan Jothilingam - Nomura Martijn Rats - Morgan Stanley Fred Lucas - JPMorgan Lydia Rainforth - Barclays Capital Oswald Clint - Sanford Bernstein Thomas Adolff - Credit Suisse Richard Griffith - Canaccord Genuity Jon Rigby - UBS Iain Reid - Bank of Montreal Anish Kapadia - Tudor, Pickering, Holt & Co

Thank you very much. So, good afternoon ladies and gentlemen, a very warm welcome to all of you.

I am sure your familiar by now with the disclaimer statements. And we said that I’m looking forward to updating you on what we’ve achieved in 2014, and what our plans for the future.

We have Simon Henry here as well. He will talk a little bit more about the results and the plans in detail as well.

But let me first of all start with the health and safety of our people and our neighbors, and the environmental performance that remain the top priorities for Shell. As I have said many times before, I do believe that we have the right safety culture in the Company.

And also this year we can say that our track-record is improving and I believe very competitive here. At the same time, I also have to say that regrettably we had fatalities in 2014 and other safety incidents so we will have to continue as a matter of fact we will always have to continue with our safety drive, which we call in the Company Goal Zero, for obvious reasons to further improve and to stay on the improving track.

We are following a long-term and a very strategy, to grow our cash flows across the cycle and to deliver competitive returns. And I firmly believe that Shell is the industry-leader when it comes to Deepwater to integrated gas, technology, integration, and large-scale project development.

And we have some of the most talented people in our industry working at Shell, and are working on adding more value for our shareholders. And I believe our dividend track-record is second to none, $15.2 billion of dividends and buybacks in 2014, and that clearly underlines our commitment to shareholders.

Let me first of all make a few comments on the macro. And I will start with the longer-term picture.

So, we expect the world’s population to grow from 7 billion to 9 billion by 2050, and this is driving a strong demand for energy, a 50% increase already since 1990 another 50% by 2050. So this really is the investment opportunity for companies like Shell, investment opportunities to create shareholders value.

However, to meet this demanding growth, governments and society also need to deal with a number of realities. Fossil fuels were 80% of the energy mix 20 years ago, they are 80% of the energy mix today, and if are looking around to the future and if you look at what the IEA and others and ourselves expect there will still be around 20% of the energy in 20 years’ time.

So, Oil and gas are going to be important parts for decades to come. The thesis that there won’t be a market for hydrocarbons in a few decades misses the point that more energy is required, as well as of course less CO2.

Without sustained and substantial growth investments, there will be considerable shortfalls in oil and gas production in the next decades, not a surplus of supply, and that is due to demand growth and of course natural field decline. Now there are some important energy transitions underway in response to requirements from society to mitigate climate change.

And reducing coal emissions in the energy mix has to be an imperative here. Coal has doubled the CO2 emissions of gas in the power generation sector.

And we think that using more gas in the power sector, and deploying more carbon capture and storage both have a key role to play here. Overall, to address the dual challenge of more energy and less CO2, we need to have a more balanced debate, a debate that is based on realism and economics, not on sound bites, so that we can provide solution-oriented policies for the right investment climate, so this by way of some comments for the longer-term energy supply position.

Let’s turn into the nearer term, and the weaker oil price environment as we have seen at the start of 2015. So a year ago, when I updated you on fourth quarter in 2013, oil prices were around $108 a barrel.

They are quite a bit lower today of course. Our volatility is a fact of life it is what it is and we have to manage through it.

And there are some very important lessons to learn from history here. So short-term movements in the oil price can be driven by perception, and prices tend to over-react on both on the upside and on the downside.

In the medium-term, supply and demand fundamentals tend to reassert themselves again around the marginal cost of supply. And we have not changed therefore our long-term planning assumptions of $70-$90-$110 Brent, because the long-term outlook remains robust, and industry under-investment today simply leads to more upside risk in oil prices in the future.

Now however, we need to think carefully about the implications of today’s prices, which are below our planning and premise range, and we don’t have much visibility as to how long this downturn will last, months, years. So we set out a program in early 2014 to moderate our capital spending and our growth outlook, and that was at the time due to inflationary and affordability pressures and with the benefit of hindsight the timing of that change was actually pretty good.

Today, we are taking steps to preserve Shell’s financial flexibility, and this includes a freeze dividends and the slowdown in capital spending in 2015, taking the tough choices on Shell’s rich portfolio funnel, and also opportunities of course to take out cost, because there is a multi-billion dollar opportunities in our own cost base, and of course in the cost base of the supply chain. But at the same time, we have to be careful not to overreact to spot prices.

We are maintaining the downward pressure on our capital spending, and we have plans in place today to further reduce our spending if need be. But at the same time, we are continuing with a very attractive suite of new projects which are under construction, and we are preserving, where we can, a competitive set of options for medium-term shareholder value growth as well.

Shell’s financial performance has improved in 2014, and that was of course from a much more challenging base in 2013, and the underlying earnings and returns and CFFO have all increased last year. This is reflected then in a 4% increase in dividends last year, and $3.3 billion of share buybacks.

But the Company is well-positioned into the lower oil price environment in early 2015 with 2014-15 asset sales program already completed, $25 billion of free cash flow in 2014, and gearing at 12% at year-end. So the plans that we set out a year ago are yielding returns, as we are indeed now balancing growth and returns.

We’ve delivered a more robust financial performance, and we have made progress with restructuring Oil Products and the North America resources plays. Our capital efficiency drive is now starting to show up in the results, and our projects came on-line as planned, the new Deepwater start-ups, especially in the Gulf of Mexico, with around 150,000 barrels of oil equivalent per day of potential for Shell.

And of course last year also saw the successful integration of the LNG Repsol acquisition, which delivered more than $1 billion of CFFO in 2014, and that is ahead of the potential we had assumed when we bought the position. I think we also came a long way with bedding down the changes that I wanted to see in the way that we manage the portfolio and the appraisal, on behalf of shareholders.

So we have a series of performance units 140 of them, they really drive bottom-line thinking, in the value chains and in the major assets that we have in the portfolio. I, and my Executive Committee colleagues, will personally appraise again some of these performance units in 2015 as we did in ’14, and for the most part of course this appraisal will now be done by the top-200 managers in the Company.

We’ve implemented a stronger, more centralized decision-making process on major portfolio choices, at an earlier phase before we enter the FEED space for larger projects, and the top-200 managers will have to own at least 1.5 times base pay in Shell shares, and that is 7 times for me. So I think we’ve achieved a lot in 2014, but of course the macro-environment today has moved against us.

And maybe that’s actually an advantage, and there’s no complacency here, let’s be very clear about that as well, because we do believe we have plenty more to do, I’m convinced that we can deliver better profitability from the Company for our shareholders, whatever the oil price happens to be. So I believe the approach that we set out in 2014 is working, so I want to continue with this approach in 2015 and beyond.

So we’ll continue to drive to improve the competitive financial performance, including restructuring under-performing businesses, and reducing our operating costs in 2015 compared to ’14. Capital efficiency is of course key in our industry.

If we want to continue to invest for medium-term growth, while at the same time managing our affordability and improve our returns, so we have expect to reduce our spending for 2015 and this is forcing us to take some healthy choices on the project set, and setting higher expectations for value from the supply chain. At the same time Shell is retaining flexibility for both opportunistic, incremental plays, but we will further reduce capital spending should market conditions warrant that step.

On the growth side we will see the benefits of the 2014 start ups in this year's results. But overall 2015 will be a transition year ahead of the contribution from next wave of large projects from 2016 and onwards.

A year ago we said that the financial performance in both the North American resource plays as well as our products was frankly not acceptable and we've been working hard to turn this around with some $8 billion of assets sales, capital ceilings, $7.5 billion of write downs in 2013-2014 period in both of these areas combined and we will continuing in 2015 and beyond with a strong performance drive in oil products and also in worldwide resources space so not just North America but also internationally. And we want to also improve our upstream engine play, so the mature upstream assets will have free cash flow has fallen substantially in recent years.

And let me give you some more details on all these three restructuring themes, and let’s start with the resource plays. I think we have made a good progress in North America a bit of restructuring in 2014.

And as I said we're extending this into the resources plays worldwide. In recent years the Company had of course taken up quite a bit of acreage and options in a number of countries around the world but in many cases we have seen pretty mixed well results and also a few above ground issues.

Now this combined with the capital savings that I referred to earlier means that we won't go forward with all of this portfolio. So the resources plays spending outside of North America will be cut by around $200 million that's 20% in '15 and we will also expect frankly to exit from quite a few positions.

And this may of course potentially result in impairments and some well write downs if you still carry on the books. That will not always be taken as identified items because of their size but we will update you on that as the year progresses.

In North America then in dry gas we have a strong position in Western Canada which we are targeting for the LNG Canada project and we have gas acreage in Appalachia where we're appraising some very interesting new discoveries in the Utica. And in the liquid rich shales we have retained Western Canada and the Permian acreage for further appraisal and development in the years to come.

But North American resource plays will remain in a loss for 2014 it's $1.2 billion last year on a clean basis but it does actually represent quite a positive swing of $1.7 billion when you compare that to 2013. And as you know we're working hard to get a much more competitive cost structure here taking out some $550 million on operating cost and capital cost on a like for like basis but it will be a multiyear program to get this business to profitability simply because of its maturity.

It's a difficult area an area with a lot of focus but we're determined to stay in to get it right and to make it a strong business for our shareholders. But overall resources plays again are an area where we're continuing to dial down the spending because we carnally have to re-moderate our growth outlook and implement a capital savings across the company.

Let's turn to downstream then, we've been pretty busy here as well with portfolio restructuring and a lot of self-help programs. And the changes that we have made in the downstream in the last 18 months have unlocked substantial new revenue opportunities and taken out a lot of cost.

So it's good to see now that downstream has a return on capital employed which has increased to 11%. And the cash from operations was $11.3 billion for 2014 which is of course a significant improvement over '13 levels.

In a lot of ways we're effectively already delivering the step up that we were targeting as you can see on the slide. The main drivers for them besides from of course industry margins which have helped was also an uplift from self-help including the cost take out that I referred to and of course exists from some low margin portfolios.

So we're doubling our efforts on the downstream, on the cost sides with a new multiyear cost program that we launched in the second half of '14. And this will include staff reductions, increasing the use of low cost chair service centers for back office activates continue to drive to improve global contact management capital to operating spending et cetera.

So it is overall a very much improved position but there is more to come here still it is also here a multi-year turnaround strategy because we need to have $10 billion a year CFFO and a 10% to 12% return on capital employed on a sustained basis not just for few quarters. Now we are continuing of course to take a hard look at the portfolio in the downstream and there are some very strong businesses with growth potential, think of China Lubricants and chemical positions and on the flip side there are also part of the portfolio that I think others can frankly add more value although we would rather spend our capital in another part of the portfolio.

So you will upstream the divestments that we took in Australia and Italy on oppositions last year and of course you've also seen the successful launch of the U.S. mid-stream master limited partnership all together sort of releasing $4 billion of proceeds in 2014.

It that was good to see that also Motiva returned to profit in 2014, despite the pressure was very clearly there also in the fourth quarter of the year. Then there is other areas, there still we have some issues, like for example Singapore fuels, where the recent start-up of the debottlenecked ethylene cracker, and the new co-gen plant as will be bringing on-stream in 2015, will both improve integration value.

And Malaysia the refinery there as well as Europe more in general remained very challenging areas in Oil Products. So we need fix these assets that's what we're doing now.

But again I want to be clear this is not a quick fix, this is a multi-year program, that we will stay with and that we will complete. Let's now turn to the upstream engines, where as I said, the free cash flow has been falling quite sharply recently.

And this is now also a major focus for the company. So these upstream engines are Shell’s mature basins, so think of offshore Europe also South East Asia, where we are in many cases producing oil and gas from fields that basically have run for many years longer than their original design intent, that was because there was an uplift in technology and of course there were higher oil prices to try and justify them.

There are some good success stories here as well, think of example Oman, where again production has been steady at around 200,000 barrels per day for Shell in recent years, continuously offsetting the effect of natural field decline. And looking further in the future, we have a series of projects under construction in Europe Upstream, which is currently, of course and also reducing our free cash flow and while this is still in the investment phase, and some of this will reverse as the CapEx rolls off and the assets come into cash generation phase and that will particularly happen in 2017 and onwards.

But fundamentally, though, I want to be clear that our engine businesses in Upstream around the world, with a few exceptions, are under pressure from aging assets and depleting fields, and there will be some pretty tough decisions ahead of us there as well. Now as you know we are allocating our capital on a global, thematic basis, and here you can see the main categories as well as the financial performance.

So we have the engines businesses, Downstream the Upstream engines they are mature assets, and they identically provide free cash flow, 7.5 billion of it in 2014. And we have the growth priorities, Integrated Gas in Deep-water where we have a leadership position in the industry.

And then we have the longer term categories which cover potentially very large positions for the Company in the future, and these are the resources plays that we referred to heavy oil countries like Iraq. Now it's good to see that there was actually pretty positive momentum in earnings and returns in most of these themes in 2014, and that is despite the average drop of $10 in Brent since 2013.

And the Company has a rich near-term opportunity pipeline, we've said that many times before and we’re in a position where we have to manage our spending downwards firmly, to balance return and growth, that is also recurring theme, we have to moderate our overall growth outlook. We’ve curtailed our potential spending as we came into 2015 further, postponing FIDs that were planned in the existing base portfolio and for our new growth projects, as well as setting expectations for cost reductions in the supply chain.

So 2015 organic capital spending will be lower than '14 levels and the final outcome will of course be driven by the pace with which we will take decisions on our portfolio, and of course also in response from the supply chain. We are continuing to challenge ourselves and everyone in Shell that our plans have to be credible, that they are competitive, and of course very important that they remain affordable.

We must get the balance right between retaining our growth pipeline that we have worked on for so many years, at the same time having the levers to pull if we need to further reduce capital spending, and asset sales including the U.S. midstream MLP, $15 billion delivered in '14 that also adds focus here, both from an affordability perspective but also driving a better performance mentality from the company.

Now, let me hand you over to Simon who will give you a few more details on the financial framework and today’s results announcements and then I'll be back a bit later.

Thanks Ben. Good to be here with you today.

I'll update you on the financial framework. But first, obviously I will start with 2014 summary.

So excluding the identified items, the underlying current cost of supply or CCS earnings were $3.3 billion for the quarter that's a 13% increase in earnings per share from the fourth quarter last year. On a Q4-to-Q4 basis we saw lower earnings in Upstream, where oil prices were sharply lower $32 a barrel, some offset from strong volume growth, better operating performance and fewer well write-downs in explorations, and we had substantially stronger results from oil products.

And with impact of a good trading and marketing environment, and the benefits of the improvement programs we have put in place in Downstream showing through. Cash flow from operations was some $9.6 billion, that's an increase of nearly 60% Q4-to-Q4 that includes a $7.5 billion swing positive in working capital also a negative impact of around $3 billion on the closure adjustment to offset to an extent reflecting falling oil prices in the quarter in both cases.

So looking at 2014 overall the underlying earnings, cash flow and returns all increased compared with 2013, even though Brent prices fell by $10. On a full year basis between return on average capital employed was 10%, and the free cash flow was $25 billion, distributions were $15.2 billion in 2014 that includes the dividend declared and the share buybacks.

Turning to the businesses in a little bit more details, so excluding identified items, the upstream earnings fourth quarter were $1.7 billion that is decrease year-on-year and that decrease was predominantly due to the lower oil prices. The results also did include a $330 million of clean results, negative impact from the Australian dollar rates exchange movements much that's an impact on our deferred tax assets and that's not taken as an identified item.

Americas Upstream was in a loss making position in the fourth quarter, profits from Deepwater and heavy oil directly impacted by the oil prices, still profitable but not large enough to offset the losses elsewhere in the Upstream Americas. Operating performance itself was strong this quarter, and it certainly has improved overall this year, less downtime than 2013, and new high margin production lifting the bottom-line.

Headline oil and gas production for the fourth quarter was around 3.2 million barrels a day oil equivalent, that's an underlying increase of some 7%, supported by on-going ramp-up in the Gulf of Mexico, Nigeria and Malaysia, new volumes from existing fields in Deepwater Brazil, the Gulf of Mexico. The LNG sales volumes were up for the quarter 26% Q4-to-Q4, and that's very strong growth, driven of course by the acquisition of the Atlantic and Peru LNG positions a year ago.

Just turning now to the Downstream, strong results made up higher oil products figures but lower results in Chemicals. Overall, we are seeing the outcome of the actions that we have put in place to improve the profitability in Downstream Ben just gave you some oversight.

In Oil Products, we benefited from increased contributions from the trading activities, where in the market there was higher price volatility, as well as lower costs and taxes, and we've been seeing better marketing results throughout the year. The Chemicals earnings Q4-on-Q4 $260 million lower and that's mainly the impact of the unit shut downs in Moerdijk in the Netherlands as a result of the two incidents we saw earlier in the year which were well flagged, couple of slides on our resource base.

You will find the details of all of the SEC reserves proved, our reserves reporting in the Annual Report the 20-F filing that we make in March. We are expecting the 2014 headline the proved reserve replacement ratio, headline 26%, a three year average there 67%.

The preliminary three year average ratio replacement ratio on an organic basis would therefore be 85%, or in the single year 2014 47%, that's when you set aside acquisitions, divestments and the price impacts. The total reserves base is around 13.1 billion barrels oil equivalent, 11.2 years of reserve life at the current production level.

And you are well aware that we actually look at resources, is when we're managing the business as the term versus 2p plus 2c, and these are only the resources in active management investment phase. The chart shows a sub-set of that total position.

Resources on stream the red bar here they remain relatively stable, despite the asset sales and production in the year. And with fewer larger investment decisions last year, as we reduced the capital investment and with decisions to sell some positions, defer future FIDs, there is a reduction in barrels in the under-construction and the design categories.

But you can see there is a series of large projects in the decision queue, in front end engineering design but not yet investment decisions. So Appomattox Gulf of Mexico Deepwater could be 150,000 barrels a day oil equivalent, Vito similar 100,000 barrels a day oil equivalent several other examples.

Also just let me update you on conventional exploration, where we're really pleased to see the performance improving in 2014. We drive strong top-down decision making in exploration, the capital allocation is very much consider that level in series of precise risk and size-banded categories.

Drilling adds short-term value where we are in near-field activity, but also we look for medium and longer term potential through expanding the heartlands, frontier exploration and ultimately hopefully in the Arctic. We held the 2014 conventional exploration budget flat at $4 billion, not included absorbing the increased exploration spend on Libra, in Brazil which we only acquired right at the back end of 2013.

This year, we’re planning on drilling in Alaska subject to getting the permits and the legal clearance that will mean higher spending in Alaska if we're successful. At the same time though we are keeping the overall spending on conventional expenditure flat at $4 billion, as part of the overall capital ceiling, and obviously arithmetically that means the spending outside Alaska will be less than $3 billion in year which is quite a reduction from 2014 levels, and that's required some deferrals, for example in the Gulf of Mexico, China offshore and Malaysia we have been releasing rigs.

Drilling last year, you can see the details on the slide, resulted in 10 material new frontier and heartland discoveries, Malaysia, the Gulf of Mexico, and Gabon frontier for example. In the Gulf of Mexico, the Rydberg discovery at just over 100 million barrels takes the Appomattox area resources and the potential to over 700 million barrels in three quarters of that, and the Kaikias oil find in the Mars basin should become a pretty high-value tie back into an existing platform that we have in the region.

We’ve also made two further discoveries in the Gulf of Mexico in the fourth quarter, Gettysburg, which is close to Appomattox, and a newer prospect called Power Nap, which is near the Vito prospect. We are currently assessing the potential of both of these finds, and that takes a total number of discoveries in the Gulf alone to four in 2014, and that contributes to over 1.3 billion barrels of high value resource that we've added that for Shell in the last five years.

And we also made 41 near field finds close to existing infrastructure and activity in Oman, in The Netherlands, Brunei, Germany, Egypt and Australia these should be high-value add-ons some of them are already hooked up and producing, in the Upstream engine businesses. So all of this marks a pretty substantial step-up in the exploration performance, 2014 was probably the most successful year that we've had with the drill bit for many years, we did drill a lot more of course, but very competitive performance in the sector whoever we compare with.

So it’s a better performance from exploration, and we are laying the foundations for the future. This slide shows few points for forecasting and thinking about for 2015 and of course the first quarter.

Clearly there will be various production and tax effects related to last year’s divestment program, as well as higher levels of downtime especially in Upstream and Chemicals. Relative to 2014, the impact of these turnarounds is expected to be several hundred million dollars negative in both Upstream and Chemicals, although it does seems like 2015 might be a good time to be doing this work particularly in the Upstream and with the Pearl GTL maintenance planned for the first half of this year, so turning to the financial framework.

Straightforward, not changed, although we're clearly going to be testing the downside on oil prices in 2015. We use the cash after, servicing debt to fund a competitive dividend, after that to invest in future growth.

Dividends are the main route for cash returns to investors, obviously high priority for the company, and we believe a track record is second to none. Today, oil prices are relatively low, and we slowed down on share buybacks at the end of 2014 to conserve cash.

We take on debt in down-cycles that's what the balance sheet is for or when the company is in a capital-intensive stage. There still is and will not be a formula for the right level of debt, we want to keep gearing below 30% and above zero, short-term moves outside that range and fairly acceptable, as long as we can see a clear pathway to return back into that range sustainably.

That is cost reductions in place across Shell today, looking not only at our own costs, but also in the supply chain, third-party cost. These programs are balanced against the different strategic activities in the company and we’re not chasing costs for costs sake, very careful to make sure none of this compromises safety, just think of the cost as a safety instance.

We are planning to put our own operating cost on a downwards trajectory here, OpEx in 2015 will be lower than 2014 levels, that's a rare in $45 billion. You can see an example of cost take-out on the slide here in North America resources play shale, where we reduced OpEx and CapEx in total by some $550 million in 2015 excluding portfolio effects, like for like activity.

The Projects and Technology division, Harry is with us here this afternoon, so you'll have a chance to talk to him later. It's very well placed to work on supply chain costs, where the annual contracting and procurement spend annually remains over $60 billion.

Overall, we think there is a multi-billion cost opportunity for Shell here particularly in the downturn that we see in activity at the moment. Divestments cause for another route to increase or improve the operating efficiency of the company, but importantly just as importantly it helps to refocus the executive management time and dollars that we do have available into the most attractive investments.

The real uptick is in the focus, the upgrading of the portfolio. So the asset sales program we set out a year ago, pretty much to the day $15 billion over two years, done, completed.

And it feels good to have delivered, before the downturn in the oil price. We do expect to see $5 billion $6 billion a year of divestments as part of on-going portfolio management activity, but we do expect 2015 the pace will slow clearly it will slow from 2014, but the overall market clearly is more difficult than a year ago, because there’s just less financing capacity for potential buyers out there, though we're ahead of the curve.

Despite that, we are marketing some positions today, such as non-core downstream Scandinavia, some deals still underway in Nigeria onshore and potentially we look to dilute some of our growth positions as a means of differing capital early monetization. There’s no fire sale here, that's not what we do, but let’s see how this progresses over the next year or two.

It's a dynamic decision making environment, it's not the spreadsheet driven outcome. Production averaged 3.1 million barrels oil equivalent in the year and that's down 100,000 barrels a day oil equivalent versus 2013.

The positions we’ve sold last year including the license expiry in Abu Dhabi, that reduced the headline production by around 6%, and there will be a further impact in 2015 from divestments we've already completed of over 100,000 barrels of oil equivalent a of another 3%. But at the same time, we’ve brought high-margin production on-stream, Deepwater Gulf and we consolidated the Repsol LNG acquisition, which of course came in no production, but very solid financial performance, so the underlying volume growth picture underlying was an increase of 2%.

On the right hand side here is the financial results are more important than the barrels. Excluding the oil and gas price effects working capital, the Upstream cash generation cash flow from ops that increased by a quarter 25% year-on-year, averaging around $30 a barrel compared to $26 a barrel oil equivalent last year or 2013, on a like-for-like oil price.

We exited positions with low unit cash flow, and in some cases high levels of on-going capital spending, we've seen the benefits of Iraq cost recovery, and increased our high-margin production. And lot of this reflects decisions made strategically many years ago, high cost oil sometimes as a good fiscal environment and high unit margin, that's what we see.

All of this has led to enhanced profitability in '14, and we will continue to prioritize profitability, ahead of volumes, good we started those 10 years ago. We are allocating capital in the company through several lenses.

So on the left and the right, so on the left from a portfolio and a strategy perspective, we want to continue to give priority to growth in LNG and deepwater, that clearly themes where we've got a strong competitive advantage and compelling growth opportunities. This accounts today for about 40% of the total capital investment.

At the same time obviously we continue to invest in maintenance programs, selective growth opportunities in the mature business both Upstream and Downstream and the level of investments in longer-term plays, shales, Iraq heavy oil look for balance in the portfolio. On the right-hand side of this chart, you can see the perspective in terms of the timeframes for the different types -- timeframe to delivery of the different types of capital allocation.

About 40% of this year's budget is on the combination of care and maintain assets integrity and small projects in the base set of assets plus short cash cycle activities such as the shale much and Iraq. Returns on these small projects are usually attractive, delivered quickly, short payback and that's against the backdrop of the portfolio that’s on-stream today, so using existing infrastructure.

Around 50% of this year's investment is targeted at the much larger post-FID growth projects, new infrastructure and options that could reach final investment decision in the near-term, most for the next six months the remaining 10% is that conventional exploration budget. So 80% of this year’s capital investment will be adding to cash flow within the next four years, by 2018.

So just let me close by updating you on the cash flow, the balance sheet and the pay-out. It’s important to look at our financial position over several years, as well as annual and quarterly because that’s how we plan it sometimes things happen in a particular time window which is to be honest artificial when we look at a strategically manage the financial framework and you can see the difference here between ’13 and ’14 on that basis.

Cash flow from ops over the last three years $132 billion, average Brent price of $106. Over the same period, the net cash outflow including acquisition divestments was $121 billion and that’s less than the inflows.

That activity included $17 billion of acquisitions, $23 billion of divestments plus the billion on the MLP and $34 billion of pay-out to our shareholders. The free cash flow declined in 2013, we have some good discussion about that 12 months ago.

We are moving through the phase of higher acquisitions and fewer divestments. We said acquisition would improve in 2014 you can see that here it’s improve to $25 billion, that also includes the cash flow growth from the new projects we talked about.

All the six major projects came on stream ramped up well during the year. So certainly factoring in the debt movements and the gearing sits is around 12.2% at the end of 2014, so few points down on ’13.

The dividends that we announced during the year and they’re not all paid with cash but $11.9 billion an increase of 4%, total share buy backs $3.3 billion, we’ve carried on in January the few hundred million dollars up to yesterday. We’re expecting an unchanged dividend in 2015, big improvement here given the rapid fall in the oil price and the outlook for operational cash flow as a result this year.

And just to remind that the $10 move is about $3.3 billion in earnings and cash flow, every $10 move per year. So taking 2014 and the expected 2015 dividends into care and the buybacks we’ve completed to date, the total is likely to be over $27 billion, out of the commitments we made last year for some $30 billion of dividend and buyback.

So let’s see where we end the year with buybacks in 2015, they are of course going to be subject to oil prices and the availability of cash and the balancing act that we need to do. And with that, I’ll hand it back to Ben.

Thanks Simon. So 2014 also was a pretty successful year for project delivery.

Simon said we started up a number of new projects last year, including the large, operated developments in Deepwater, like Mars B in the Gulf of Mexico and Gumusut-Kakap in Malaysia. Looking into the next few years, in 2015 we’ll see the benefit of ramp-ups of these 2014 start-ups, although the headline production for 2015 will be lower than 2014 due to divestments that were also mentioned.

There are going to be relatively few new start-ups in ‘15, and we should see a more fundamental growth in the ‘16 to ‘18 timeframe, as the next wave of large projects come on stream, with over 700,000 barrels per day of oil and gas and 7.5 million tons per annum of LNG currently under construction. We regularly benchmark our project delivery against the rest of the industry, for example using IPA.

We know there have been problems with some non-operated projects, but I’m pretty comfortable with project delivery in the parts of the company that are under our direct control. Let’s talk a little bit about pre-FID opportunity set.

So a decade ago, as you know the company frankly was short of investment opportunities, and that was after several years of under-investments. Made a lot of progress in addressing that, with higher investment levels in exploration, where we have had success for example in the Gulf of Mexico, but also the bolt-on deals such as Repsol LNG, and working on development-led opportunities like the ones we had in Chemicals, Iraq Upstream.

And today, we are working through that enlarged opportunity set, to make sure that we have the right order in investment priorities. So investing in growth plays that have the returns and cash flow to ultimately of course replace declining Upstream engines portfolio.

Coming into ‘15, lower oil prices, affordability constraints have actually helped us to further sharpen our minds here, and we’ve made some choices in the investment portfolio to curtail our spending. And this has resulted in over $15 billion reduction to our potential capital spend for ‘15 to ’17 period, and a much more concentrated sweet of projects to take the FID in the next two years.

I think it’s very important that we do not get in a slash and burn mentality, so I want to have a measured approach, with levers to go ahead with new developments, or to pull back further if the financial framework calls for that. Let me give you a few examples.

In Chemicals, along with our partner in Qatar, QP, we have recently agreed not to not to go ahead with the proposed chemicals project in Qatar. We're working hard to reach FID on three new chemical projects with a total of 2.7 million tonnes per annum of capacity but of course here also still remains to be seen whether we will actually take those FIDs.

On integrated cash we have slow downed some new developments which for example means that the Arrow Greenfield LNG is off the table. Abadi floating Ladies and gentlemen, Browse floating LNG have been resized to optimize the concepts by the operator there.

And we're prioritizing the North American LNG options in that timeframe, so LNG Canada and Elba and LNG Canada alone is a 13 million tonne per annum project 50% of which is Shell. We've slowed down the pace in Deepwater, retaining potentially four big FIDs in the next two years.

In the Gulf of Mexico at Appomattox and Vito that Simon mentioned with the first FPSO in Libra and potentially a large development also in Nigeria. And our longer-term themes we're continuing to pull back on the resources play as I mentioned earlier with more access to come and it will delay phase 3 and phase 4 of the Carmon Creek project in Canada.

And at the same time we're also looking closely at the next development phase Majnoon for example all part of an FID options that overall could be over 700,000 barrels of oil equivalent per day for Shell. So 700,000 barrels under construction and options for further 700,000 barrels per day on the table.

And before I close let me update you on the competitive position. As you know we take a desperate approach here, we're looking for more competitive performance and a range of metrics and of course overtime no single point outcomes.

So I see it development has become more competitive in this sector has been a major strategic objective and focus of course from the last few years but it's also good to see our return of capital employed and free cash trending much higher this year. of course now we have more to do here and we have to drive this another metrics higher and we also realize of course with this cash we look pretty different at $50 oil although our aim is to be competitive across the price cycle range.

So let me assure again there was no complacency here and there is still a lot to do. So in summary I believe it's a plan we set out a year ago are showing results as we balance growth and returns.

I believe the approach is working and I want to continue with this emphasis in '15 and beyond. So we will continue with a drive to improve the competitive financial performance on our uptime, costs and supply chain opportunities.

Capital efficiency will remain key more key in our industry so we're trimming the 2015 spending at the same time also driving for a better value from the supply chain and managing our financial framework with high choices on the portfolio and this will translate into new growth also in 2016 and beyond. So I think Shell has delivered where it counts in 2014, the second half for stronger capital efficiency while also being careful not to overreact to the recent fall in oil prices.

I think the company is taking the right decisions here to balance growth and returns. With that let's go into Q&A and I again ask you to have one or two questions each so we can go through the room and also some people who are on the telephone.

And who can I ask first, Irene I think you lifted your hands at first.

Thank you. Irene Himona, Societe Generale.

I had two questions, please. So first, I appreciate 2015 CapEx is still under consideration, but can you give a rough idea of the range?

So are we looking at $2 billion off last year's level, or $5 billion? And secondly, the Downstream.

There's a slide on page 14 which shows that $200 million of the earnings improvement was from self-help, and actually the rest of it, the bulk, is from better margins. Now you don't disclose your view of sustainable margins, but you do disclose that you aim for 10% to 12% sustainable Downstream returns.

So if you were to restate your 2014 numbers on whenever your sustainable margin is, where was the return? So how much more have we got to look forward to, in terms of improvement?

Thank you.

Okay. Thank you, let me take the first and Simon will talk about the downstream.

So what we have done and I think it's probably good that we expanded that a little bit more because I already sensed that there is a little bit of an explanation to do on how we treated the CapEx piece. So what we said we would take a few for three years that we have a decent amount of visibility on how phasing of projects and decision points would come up.

And we basically wanted to balance the financial framework within the parameters that we thought were reasonable and it came out that we thought was an affordable capital level against staying within constraint that we have to set ourselves. We concluded that if you wanted to do that comparing that it's the amount of money that we could spend and options that we were developing and we were working on there was going to be a big mismatch.

So the first thing we did is to just retire our postpone a large number of options about 40 projects of different sizes across the entire portfolio but clearly we could not see that we would go ahead under that sort of time-- under that financial framework. So that’s $15 billion, 40 projects and there are the likes of the Qatar chemicals project, [kitero] and there is a few others that’s in that.

So that was one. That would leave us a certain amount of capital to spend, well, that’s really what we want to spend because if we do not spend if we seriously impair our capacity to grow the business.

And of course we are here collectively driving shareholders value in the mid-term. So growth is important as well.

And as I said I don’t want to go into a very early overreaction mode because of many of things that you may do lot of excessive prudence basically means by to lose it that won’t comeback anymore. So we had agreed, we will keep the capital for now flat organic basis compared to last year but as a cap, so we will be driving it down and as a matter of fact we will be driving it down as much as we need to depending on how the outlook develops for us.

So this one in time and I cannot tell you exactly where we will land up it depends how we see during the year, the oil price work out and how much we want to look in future spends with the FIDs that comp up. So if we feel later in the year on pre-FID decisions that insufficient clarity or insufficient room to maneuver to take that FID and look the spending then we will not take that FID, and then that number will come down further.

We will probably then also lose the opportunity to do the project, because I just said many of our projects have a limited degree of flexibility, but we can we will incur a flexibility so there is a very clear message out to the organization, do not work behind us to come to and FID as quickly as possible give us options and a range to work with, sensible range to work with. So that will be a navigation process this year, but we very clearly set and not going to go beyond this same organic spend as we had in ’14.

Does that sort of explain the thinking?

The downstream question. $200 million was a self-help on costs, but the market and trading margin is also primarily self-help.

It is, I think we spoke about a year-ago we changed both the organization and the way we are setting accountabilities particularly for the field’s value chain into the refinery to the customer. So we did a few things there, but primarily ownership of the full value chain cleared and managed an exactly that way.

That has I think in my words unleashed and entrepreneurial spirit that was hidden, maybe even we thought lost within the downstream business. There is a quite different discussion today I can tell you with the leadership team as were the gathering bit bigger than this in Germany couple of weeks ago and they are talking figure just for them in the German, Swiss Austrian business, bigger than $200 million.

So to come, significantly amount. And just to be clear the downstream is basically five businesses, retail, what we call global commercial which is lubricants and some of the commercial fuels and specialty products, chemicals and what is now trading and supply where we move most of the commercial fields both fields managed by the traders looking through the refinery as a value chain.

We sell 6 million barrels a day, we only refined 3. That’s how that piece has managed.

Each of those four is a $1 billion plus ratable business, trading is not a volatile business but it is ratable. Each of those $4 billion manufacture could also be a $1 billion, it’s not yet.

That’s how it’s been made up, significant underlying sustainable improvement ordain the numbers that we can probably double what we have already done. Last time we what done needs to do targeting to do to get to that 10% sustainable bottom-end of the cycle.

Ashley Meyers of Viva Investors. Thanks for the presentation, Simon you said that you were planning to go ahead with drilling in the Arctic, should the payment come through.

And I just wondered how I guess comfortable you felt with the economics from that given that we’ve thought 500 million barrels might be the minimum required to make that economic. But also on the risk perspective, both operational risk and reputational risk, as well, given there's still some outstanding issues on spill response and the report that came out last year.

You are right. I think it seems to be a big news of the day but of course we always maintained our capability to go back to Arctic when or to Alaska I should say, when the conditions would be right.

We did not retire the entire armada of ships that we had and all the other elements of the supply chain. We have been upgrading our drill ship or both of them actually we have the rig that [indiscernible] navy brought in as well, all of that viewed if we should be ready to drill in the next season so that’s this summer.

There is a number of conditions to fulfill assignment sets of first of all we have to make sure that we are ready from a logistics perspective and technical perspective. I think we will be.

It would be incredibly disappointing if we have to conclude towards the end that after so many years of preparation and pauses, we would still have issues. So I think that will be fine.

You need to have the permits, then we still have quite a few major permits outstanding, we're working very hard with the U.S. authorities to get those permits, but they need to be good permits and not going to accept permits that we cannot comply with, it's just something we had in 2012.

And then thirdly, there are only few legal blocks that need to be removed as well, actually legal block against the department of the interior on the environmental impact assessment of the original lease sales. So needs to be resolved as well.

Less control of course over the last piece, because that sits of course in the legal system, but the department is pretty confident that they will resolve it, we're working with them of course quite closely to do this. So I think if we get a green light in all three of them and indeed we do have a good ice-free season, we will be out and drilling.

In the meantime, Simon will give you numbers, we will have the meter ticking on all the assets that we have been cast in theater or close by, and we will be stepping up of course the spend in this year when we go ahead. So we're very minded that this indeed then is a very important here to for us to prove that we can do it.

There is reputational concern around this, I think no amount of explaining our approach the caution as we will take the complex that is there the long history of operations that we have in I think the industry has, the preparedness that's multiple lines of defense, but will be a very significant part of society that will simply find it unpalatable, that we drill in the Artic, no matter how good we're and how prepared we're. So we have to phase that as well.

But price needs to be significant for us to go ahead, as you talk about 500 million barrels a day, 500 million barrels I don't think that we'll cut here, it must be a multi-billion barrel discovery that we have there. That will justify going ahead, it will take years to unlock and of course we need to have an oil price outlook that matches the sort of cost that we envisage there.

But let’s first of all see how much I understand. You have of course high expectations and probability and an outlook that we need to prove first that we're right in terms of expectations.

And probably nothing to answer, the economics will work if the structures are full of oil, as simple as that. The $4 billion of conventional exploration over 1 billion is what we will spend if we drill.

At the moment as the meter is ticking, decision three four months from now at which point it will be close to 1 billion committed by then even if we do not drill, so the meter is ticking at quite a rate today. So that is important, but the $4 billion I talked about is on the assumption that we do drill.

[Indiscernible]

The no-go decision, what we call the ramp offs, if you get the meaning of the world we'll be there of course anytime, if there is another major legal block putting out, the we will not go ahead. If you get permits and workable, if you find a fatal flow in our preparations then it will all be no-go for the rest it will continue to go ahead.

So it's basically monitoring do we still believe we're headed for, do we still have green lights? And then of course it will be a final moment pretty close to the season, just understand when is it ice-free when do we mobilize?

How do we get out there et cetera? But basically just ramping up and preparing as if it's going to happen.

It's just a matter of will we where we call it off rather than where we go ahead.

Theepan from Nomura. Just a couple of questions please.

Firstly coming back to capital allocation, but could you talk about the process in terms of how you think about your reference conditions, if and when you would chose to change them? I think you're using $90 long-term and $4 on Henry hub.

And then just as a reminder or recap of, I think the chart that you show on 2015 CapEx. How much committed CapEx is there in '16 and '17?

And the second question was more along the lines; you talked about the Upstream engine being under pressure. Could you just elaborate as that decline rates integrity costs just a bit of color there would be great.

Simon can talk about the numbers for the years out in the bit more detail, probably in terms of when do we or how do we look at the rates the screening rates that we have. And when will it change?

I think it will be very high to predict when or whether there will be a time when we change them, basically what we do is seek of course a very detailed modeling of the energy system of the whole project suite that we understand of basins, as a matter of fact the IEA believes that we have superior planning, modeling of forecasting capability than they have, all those jealous of the work the we do. But basically what we do is we look out to understand how demand will evolve.

Of course we have an economics team to understand how economic growth and energy identity of GDP development will evolve and we have an understanding of how decline rates will manifest themselves given certain investments scenarios. Basically what you’re looking at if I simply the whole modeling story a little bit to looking at about 1% to 2% demand growth every year and GDP growth would have to certain drop down to 2% for oil demand to stay flat.

So oil demand decline scenario is rather unlikely and certainly over the longer run. And if you look at existing assets with existing investment programs to arrest decline, you would still see a decline rate of 4%, 5% perhaps the year, spending a little bit on how much investments goes in there.

So the more you see investments being pulled back for portability reasons or other reasons, the more because it doesn’t pay or whatever, the more you will see that decline accelerate. A very quickly if you look five years out, you will see that you need a very, very significant amount of investments simply to close that gap.

Now you can take a few on how much cost take out could happen in the supply chain et cetera, et cetera. They’re looking here over the next five years that half of trillion dollar of investment that the industry collectively has to make just to have supply meets demand that investment level if you look at on sort of cost of supply group of a different project as we look at -- about 400 and we look all the timing, basically say to just breakeven, you have to have $70 oil which happens to be the lower level and which we planned.

And if you want to have a little bit of return on it, you will probably be looking closer to $90. So that analysis gets up there all the time.

We probably crank the handle a little bit more frequently under today's environment. But basically against that sort of modeling we take a few and say do we see anything fundamentally new, do we have it wrong or our modules wrong, is our thinking wrong, is our paradigm happening.

And as long as we do not see that as long as we see that we will $90 oil to just have supply and demand match, we will work with or planning process. Now it doesn’t mean look at an infield projects for 2015 that will basically run for two years at the same screening value.

We will then have a much more near term assessment, varied spoke to the project and question to do the economic on that, but with long range gains this is the view we take.

Thanks. We know we got a couple of occasion October, November.

And at that point normally, you’re committed one year there 90%, two years 70%, three years 50%. Those numbers seem to hold true axiomatically.

We didn't complete in October and November this year in fact still an ongoing dynamic process, what we’ve done is kept certain levels and allocation and it’s had the certain choices remain basically for them in terms of the big project, but crucially a lot more emphasis on taking cost back at post-FID activity and certainly have to pre-FID. If we look forward from today as less than 10% flexibility for this year absent significant changes in unit rate and what we’re actually building today that improves as we go forward.

However some of those the larger FIDs they absorb significant demand of capital because those are big. So Appomattox, Vito, Canada LNG, [indiscernible] these are big projects that’s why we take some care because in and all themselves that you’re talking tens of billions of dollars out over 5 to 6 years investments period hence the reservation for the Chief Executive.

[indiscernible] the multiple question earlier I think under pressure so is it caused, is it declined in integrity, is all of it but to be briefly honest tons way you are. Cost levels are very high in the North Sea we have assets going beyond design inside Southeast Asia.

We have high decline rates in Denmark. It’s one all the other everywhere and they all come together over the past 2 to 3 years to make a significant reduction or dent in the free cash flow that’s available hence the choices that we need to make about fixed or go.

I want to ask you few things, you’ve said about the dividends you expect the dividend of $0.47 this year, but it didn’t sound too committal I just wanted to make sure is that really still in place? The second thing I wanted to ask is with regards to the amount of unproductive capital, if I remember well from 203 annual reports 31% of capital employed was unproductive and I was wondering is that number now coming down because that’s sound quite high at the time.

And the finally about exploration expenditure, I know to figure 4 billion, if you by the time we get 20F for 2014, the amount of exploration costs incurred that numbers that’s the number we can compare to other companies, what will that number be for 14 and what do you expect that number to be for 15?

Okay let me be clear about dividends and Simon will take the unproductive capital and aspects number, I think we have done nothing different than in previous years, but I saw that is $47 for the fourth quarter have an expectation of what first quarter 2015 dividend will be and then we have the track record for what happens after that. And there’s no change to that.

On productive capital it grows as you invest comes off as you come on stream and it’s growing again we had deepwater come on stream, it was $42 billion end of the year work in progress and technically Kazakhstan is no longer or Kazakhstan is no longer work in progress because in practice it is because it came on then stopped. So, you can add another 6 or 7 for that.

The $21 billion of it was a exploration asset signature bonus how ahead of development, are you talking over $65 billion which is purposely right in 30% in totality. Thanks.

I don’t know I really don’t because we spend 4 million on conventional that’s the number that matters that’s the comparable of which last year close to a 1 billion was Alaska or outside it could be over 1 billion Alaska, it’s between 2.5 and 3 conventional this year. The rest of what get reported as ex-specs can be on last year it included lever by definition that’s exploration but that was an acquisition, it includes the activity on unconventional, which all intents and purposes, at the very least appraisal, and sometimes development, and sometimes development, but the rule say it’s exploration we’re not reporting.

So, actually I neither know nor care whether that’s exploration, what it is? It’s $4 billion a year all spend in Shell and we’re not actually planning lots of acquisitions likely for this year, you have known opportunistically what may come up but so the actual number can be impacted by all of this factors the number to think that is 4, which could go down if we don’t drill in Alaska, it could go up if there are acquisition use acreage of farming type opportunities at the moment is more the other way around it it’s farming that’s taking place with focus on delivering drilling program.

If you recall less than 5 years putting the portfolio of current drilling prospects together, it was a three year drilling program. In essence, we were sort of half way through that last year.

So a lot of drilling, great prospect this year, it can then come off a bit on the next two years after that because we’re not yet committed and we’re taking the drilling fleet down. By the end of this year maybe half the number of rigs that we had middle of last year.

Two questions; one on the impairments and one on the dividend. On the dividend, if you achieved everything you’re setting out to achieve what you say its multi-year improvement program but if you get that and you chose all the right projects and you get rid of all the right projects what oil price do you need to generate enough cash to cover $12 billion dividend?

And on impairments I was slightly surprised that we didn’t see larger impairments with the results, perhaps the answer is you already tested 70, I just wonder, with project exposure to projects like Gorgon, [Katchigan], I wondered if there's a trip if you test again to 60 whether we can see very substantial impairment spending?

The divi, there’s a significant potential growth projects coming in, in 2 or 3 years’ time by which we expect the oil price to recovery. So I’ve breakeven price between now and then we don’t really know any more than I know the oil price, but it will depend on some of the choices we make but we’ve always said the breakeven price needs to be below the middle of our planning range which is 90 for now.

So the breakeven cash price we’ve then assume the level of divestment and assume the level of investment because both of those affect us that will be below 90.

[Question Inaudible]

Not necessarily for the next 2 years because of the [indiscernible] and we execute well. So three years out its below 90.

We’ll depend on some of the choices we make in that interim period.

[Question Inaudible]

You don’t know what the right choices are depending on the oil price it’s a dynamic situation we don’t run the machine by spreadsheet and we don’t run the machine according to a particular outcome at a particular point in time I’ve to tell the world how it is, not how we’d like it to be. We will make the choices that will enable us to maximum expense possible to protect the dividend and ensure we protect the growth profile to the extent we needed to remain the company that has won.

On impairments, the big driver of impairment as your long term view, unless you’re doing only short term drilling. So, the long-term view and [indiscernible] we’ve not changed our long term view.

Obviously, the short term view, we changed a little. So we retested anything that was of interest for three 3 years at a lower price.

And then beyond around to 90, no problem. On Gorgon [Katchigan], a massive cash generators, at the end of the day.

They're not lot high cost cash cost once they’re up and running. So both we’re not even close.

Around $10 billion of assets that you said it stayed at 70 and you might have a question but actually no mostly cash assets in North America where the key decision is how we're going to monetize the gases into LNG or otherwise. So yes we did at a lower price but it was not close enough to warrant a further a deeper look at impairments.

Now if we change the long-term investment criteria for sure that could be an impact and it could be broader than I have just stated but we don't yet see the fundamental supply demand cast to do so.

And the questions coming on [indiscernible] on the OpEx, what proportion of the $45 billion is actually corporate overhead versus the direct operating costs? And the reason I say how much of the cost reduction is likely to be Shell-specific versus industry deflation in this environment?

And then, for Ben, it's been just over a year that you have been in charge now. Just in terms of what has been more difficult than you expected as well as being better?

So the easy one is the first one are you thinking about the second one. [indiscernible] so the total overheads of $10.5 million is a good definition of overhead more specifically as I manage it or my two colleagues running HR, corporate, communications, real-estate, legal, et cetera or they manage it.

That has already been rundown from maximum it is the light we target over the next year or two of the more aggressive sustainable cost reductions. We have already taken quite out a lot of cost out over several years in a pretty sustainable way at the asset level which is being offset by two things new assets and increasing level of integrity and maintenance spent and no mature upstream assets that really does show through in the OpEx quite material.

The target the $10.5 billion just in IT alone we took 300 out against expectation last year and that's just the start of a quite a bigger program, I have actually the same number in site and finance. So every piece of the organization knows where they need to get to.

It's not a single year program, we don't give a headline number because that a gets us to much into chest beating and driving the wrong behavior in the company. We found that individual executives is sustainable through cycle but given the oil price is 50, do it more quickly, sense of urgency and really importantly third party costs because there is a window to take out that third party cost.

I hope that has given you enough time.

Just been thinking of it.

Not it hasn't, there is a long list of things that I could come at. It has been a very dynamic year and it's of course little bit sort of difficult to maintain objectivity if you are right in the middle of it and look back and say well actually it wasn't just felt like that but I feel has been quite a dynamic year lot of things happening.

If you remember a year ago wasn't exactly the easy moment to spend here I think during the year we have seen a lot of good things happen but it took a lot of time enough. This is the last company it's a complex portfolio to work with bringing a much more sort of centralized early view to capital planning and that's required for the systems in place that just don't come overnight.

And I think what has been working very well is the way how the company has responded. It always takes time to explain what you mean with performance units and how capital discipline in reality gets implemented.

It's very, very important that again you do not create an overreaction when we talk about capital discipline we don't have the message in the company there is no capital anymore so it's okay to cut everything and let's send people home et cetera, et cetera. So getting the balance right is a thing quite a challenge as well.

At the end of the year indeed we're confident, we have a long-term view, we want to be prudent, we don’t want to overreact et cetera, et cetera but it is nevertheless a significant challenge to navigate with this uncertainty in a way what you hear to say is we're not going to have a fire and forget plan where you just say here is your capital good luck with it. We have to work through the year to see that we're still doing the right things, that we're sufficiently prudent but also sufficiently preserving our growth opportunities.

So but I find all that dynamic is stimulating, I get a lot of energy out of it as well. I think maybe and I don't want to flippant here but standing in front of you I am meeting with our investors I find that quite a new experience as well.

And that only because of the experience of standing on a stage and talking about the company but I think it gives them the cleared sense of accountability. It is very, very clear that buck stops with me, sure that sounds and feels that in his in own way as well.

But I still very, very much feed on the [indiscernible] and I feel that to be a very healthy thing as well. So there is a strong -- even stronger sense of personal commitment than I thought I would have when I came into the role.

Does that help, okay. sorry I promised you would come next.

Thank you. Also Oswald Clint at Sanford Bernstein.

Just a question on LNG could you talk about the resilience of your LNG earnings today or at least a next year or so at these oil prices but also even you said you are good at LNG you like gas and if the backend of forward curve is that seven day and you breakeven at seven day. How does that play into your decision making for future LNG projects as part of shell.

And also what do you think about the current LNG price and its ability to prevent or delay some of big North American projects overall which could have created the risk to the global LNG market anyway. And then secondly just on your divestment target 5 to 6 and potentially less this year.

Could you drop more assets into your MLP if required, if things get tough is that something you have included in that number of could you think about it?

Let me talk about the just second question and Simon will take a first. Without wanting to say too much about MLP, I think the idea is clear.

This is a very, very quick and efficient vehicle to liberate some of the capital on the balance sheet, to get cash for it, get the just a portion of the solution wise if we go ahead with the further dropdown, so this despite of the bigger longer-term program to of course take the most of this opportunity. Quickly accelerate is I am sure that we will be looking at optimizing the timing from a number of angles, but we can also look at other structures that we have MLP like structures that will help us structuring the finances of the company.

And that maybe more opportunity to do of course at a time that we really need to understand the financial framework can be optimized. On LNG, talk about pricing and prospects in North America.

And might be little bit of resilience of the earnings, November 30% 40% what you say an integrated gas was actually gas to liquid primarily in Qatar and a little bit in Malaysia. So that’s almost directly exposed but in the production sharing environment, we have some effective hedge against the lower oil price within the production sharing environment, the rest of LNG is either big which is low cash cost it’s not for investing but in terms of operate is relatively low cash cost it’s pretty resilient in cash generation that might lower LNG prices than we see today, but building new ones is a much bigger question now.

At $70 very few current LNG projects make a lot of sense as simply because the cost today reflect more 110 environment in the 70. So the cost just be higher wither it’s in East Africa, Australia or North America, this push to change long-term pricing of cargos from oil price linked to Henry Hub price linked doesn’t seem a strong when actually not means fuel prices, oil price link cargos are cheaper than Henry have linked and the housing gas being a single Henry Hug cargo delivered.

The first ones drill come this year there is still only really one project on its way and that comes on streams to be in past. So we will see how that develops.

It’s been a good reminder to the customers over the past six months that oil price and linkage upside them as well as downside. So we expect to see the mix change but it won’t move all this part, it won’t move oil hub and it won’t oil to Henry hub.

And so the resilience and the attractiveness of gas as a fuel from most of those consuming companies and states and utilities remained pay enough to support we think of our resilience business even at 70, but it will not support a lot at new investment which will make those of us who have molecules today much better placed.

Thomas Adolff from Credit Suisse. Two questions please.

One on your gearing and credit rating if anything. Your target is 0% to 30% and on the last conference call you said if you get to 20% rating will open the door because all the off balance sheet financial leases et cetera et cetera.

I wondered my question is how important is your credit rating if for example we get into an environment where the interesting opportunities for your upstream business. The second question actually I wanted to go back to the LNG business because if I look at your 4Q results I was a little bit surprised by the sequential decline given that oil link got a lag effect, West Coast and your exposure to spot market is relatively low.

So if you can talk around the resilience in the LNG earnings perhaps in a $50 oil price environment.

I can quickly do the second. So what you saw in the integrated gas results indeed is a decline we have to bear in mind but half a billion of that is actually just the oil price exposure that we had total GTL and then the 330 million that Simon mentioned that was the 4x effect on the deferred tax assets in Australia actually all sets in integrated gas because we consider Australian integrated gas business.

So add back $800 million and all of the sudden you see that it’s not a decline.

Gearing, 0 to 30 where you can see the rating agencies also do look at pension fund liability operating leases commitment, et cetera. So they add $20 billion to $30 billion on to what you can see.

They're also both just significant; S&P have done it twice, maybe three times reduce their projections on which they use pricing to calculate their ratios on a go forward basis. And that has put the entire industry on negative watch with S&P, and Moody's hasn't yet moved but it would not be illogical for them to do the same based on the changes to the environment.

And whatever we do in terms of opportunities that are out there, we like the rating to start with an A maybe not beyond that but it will be A, because that is important both in terms of access to the market when you need it, the price is so doing but the confidence it projects with the partners we work with around the world many of whom, but when you say why aren't you slashing and burning CapEx? One of the reasons we're not is because a lot of our partners work with us precisely because they don't expect us to do it.

So we said Petrobras on Libra. Sorry we can't join in, we have no money.

That is not going to help us in Brazil or China or elsewhere in the world, so that credit rating is a defector indication of confidence through cyclability to finish what we started and that's why it's important. But the rating agencies are a bit nervous at the moment, not in [hurry].

So we would not be surprised to see the downgrade if we don't do anything differently.

Richard Griffith from Canaccord. Just a couple of quick questions.

You talk about your long-term oil price assumption being somewhere between 70 and above. And yet the markets have come down to 50.

Does that mean your view on M&A changes or it that too early to say? And the second one was just on U.S.

shale, what do you think the breakeven for U.S. Shale is going right now?

And how that plays into the planning scenario as you've talked about earlier when you modeled out on the forecasting.

I think on M&A we never comment, so I don’t think this is the right moment to start changing that policy if you don't mind. And what we do see by the way is that in some cases partners that we work with in projects or an exploration benches are a bit more pressurized of course than we're.

So as opportunities come to this all the time. On the Shell breakeven, I think it's a bit of a mixed picture, I am sure Simon will have a little bit more to say about that as well.

if you talk about our own breakeven prices probably a little bit too early to say, remember that lot of the positions that we have are still very immature. So we're working out, how we will bring them into development and we'll have to just see what's the development cost will be.

After we also know what we can take out of at a contractor universe that is going to help us there. And then how that plays into what then will be WTI environment.

It's obvious of course that with the low prices that we have at the moment, a lot of the opportunities to invest will look less attractive, and therefore you will quite a bit of the flexibility that we have, capital program has been exercised in the resources plays and the shale plays. But also because it's a little bit more flexible, so everything that you respond to spend in resources, plays in North America, there is a fair chance that you can catch up later of you can do it later.

As well in the deepwater project license or project where you are in a slightly different position with partners it is basically go ahead n lose it. So the growth will be a little bit more focused and little bit more downward pressure on our spend in the unconventional space.

Now at the same time of course it means that the maturity of this business will be postponed a little bit as well, it is after all a significant amount of capital on the books. We should only make a positive return on it, if we can generate more cash than we have depreciation.

So that basically means more investment in order to bring it into positive territory, if the investment program for good reasons, affordability reasons, we will also differ the moment of breakeven. But the way to look at this business is on a cash basis in my mind, so to the opportunities that we have ahead of us.

Start the breakeven on liquids production from Shell is probably lower than we thought, lower than many of you thought in suspect. There is a lot of hedging in place, forward production, next 18 months but they start to roll off on what we can tell in next three months’ time.

So the hedging will roll off and a lot of the investment is been done with other people's money and six months ago that was called high yield debt, and we actually renamed it correctly two days ago as junk. And refinancing that is the big challenge.

You don't just invest a breakeven, you're repaying high yields debt, you have to get a return, and return for your shareholders. And how that plays out will be important.

So we see a growth in liquids production this year, relative to 2014 from Shell in North America. The current conditions it will not grow in '16 relative to '15, how far it comes down will depend on price movements.

You can't put those hedges in place again, there is no opportunity to do so. The costs are actually quite a bit lower to be fair, the good operators on the good acreage have done very well, but most people are not in that place, they need better than just a breakeven at 40.

Can I preface this question by saying, if you recognize the $50 if you roll going for Q4 upstream performance you’re going to be close to breakeven if not lost making even paying is that something as somewhat of a close to thought, add a little back my model, we chose go back our long way and I couldn’t find another quarter losing like that and that sort of promised me to think about something I think we and the markets going to want focus on which is trying established through cycle what you’re capable of doing, you’ve talked about the dividend at 90 and that because we’re jumping but do you have over $200 billion of invested capital, so is there some limit to the performance expectation from a company as large and sophisticated as yourselves to be generating a 6% return on invested capital, it does seem somewhat meager. If it’s not and you’re invested investment performance on assets is a lot better and obviously you think it is what’s the gap why is the return to shareholder some much lower?

That was one question. This is right through New York.

The second question is just going back to your discussion around OpEx and I think you’ve also talked about how you’ve spoken to your suppliers and you’re asking for cost cut and so on and so with the experience 08 and 09 what the sort of leverage on your OpEx that comes from the discussion which I believe are quite big one around cost cutting that follows into that $40 odd billion of OpEx, can you just sort of clarify that so I can kind of follow the potential there? Thanks.

Let me talk a little bit about the second question, Simon, if you take the first and then I also suggest by the way that you talk to Harry Brekelmans, who is sitting there in back who is new P&T director and took over from Matthias Bichsel a few months ago and hold contract again procurement outfit actually sits under Harry. Of course the first time we decide see the oil price coming off.

You saw the opportunities coming up as well and actually said John, we did exactly what we’re doing now also then 08 or 09 timeframe where we basically been back. Our partners and supply team and listen we cannot go on this as if nothing has happened.

No, this is usual, we have to see very very significant reductions in rates, very significant cost take out in your side as well. All the letters have gone out again asking and suggesting 25% cuts in rate.

And are going to be approach as if sitting down will our key suppliers to just see how we’re going to do this. And it’s a big early days to say where we are going to run that, but this scaling has to be and multibillion dollar takeout program certainly if you have a longer term period of lower price.

You talked about a year at 50. I can only imagine the amount of speck actually we will have in the system, if you have a year 14 and it expands into 16.

So and of course if it’s goes on at a relatively low level for multiple years, we will have to see a reset in the industry a rest in the spending. We quick make similar sort of return of course as much lower oil prices as well but of course the whole cost space if we had at those days, but also commensurate with a lower price and we have to get as much as possible out of the system at a time that we have the leverage and then we have the need and the opportunity to do so.

Again I think we probably have to talk about is as the year goes on how well we’re doing but again let me tell you this is a major major drive in the Company not only it’s of course highly through second or third priory to look at the cost effectiveness of our project in general because if we not have the cost effective project capacity I think the long run, we lose our license to exist. And investing in large capital projects is what we do for living so we better do it incredibly well and incredibly competitively.

And everybody understands of course that if you look at a project like Appomattox or Vito or the Pennsylvania cracker, or any large project that will come up for a decision this year given the way we’re going to manage this spend in this year and given the propensity of course with downward pressure if we have to do this, everybody understands and not going to come back with a project and capital cost that is consistent with $110 tons oil price. So of course it has to be taken out otherwise it will be a no go, no matter whether it is affordable or not we cannot accept doing projects with a cost structure that is basically is still living $110 world.

So there will be tremendous amount of tension in the organization to get this right. But we’ll have to see how it plays out.

We said we wouldn’t put targets out there but we will talk about it as the year ways on.

[Question Inaudible]

Yes and we do and you can imagine that acquired a few very difficult fiscal environment we’re having pretty tough discussion at the momentum because there have been many areas and if you don’t mind, I am not going to go public on that. But in many areas, you can probably figure them out yourselves, either because it has been done very publicly or has been done privately but it’s known of course layers of fiscals have been layered on old layers and we’re at a point that is sort of okay at $110 but not more than okay but it was pretty seek at the environment that we’re seeing at a moment much of that is in our engines business and material businesses but of course government would look at profits that we’re making on a relatively mature asset base and say we’re hold on that we need to talk about sharing this and of course additional tax structures were being slapped on that need to be peeled off otherwise we cannot carry on.

So we’ve quite a few cases where we just say listen, this infill project is just not going to work we’ve to talk about how we’re going to change this otherwise we’ll not do it, we’ll be mobilize risk and in the end what you’ll see is your fiscal environment that actually kill yourself. It will basically drive down income so we’ve to have a different discussion and indeed when it is with heads of state it is a discussion that I had but believe me we’re having this full on.

So there is a question on that returns on invested capital as well which I must have some of the new ones in the question so just give it, I’ll say what I want to say and -- .

6% on $200 billion is not acceptable overall clearly, it was 10% on that return clean underlying basis last year that if you look at the track record competitively is in improving competitive position. We acknowledge a lot of that 200 billion is a result of 10 to 15 years ago of not having the longevity in the portfolio and us lifting investment before the competition.

They’ve lifted their investment to catch up, the other factor is you get half as much per dollar investment as you did 10 years ago. So the actual unit rate in investment is doubled what it was, if it stays double then it will be difficult to achieve the same return on capital as a $50 to $60 oil prices we did 10 to 15 years ago that’s not going to happen again but we also don’t think a $50 oil price is going to happen again for any significant length of time relative to our investment lifecycle.

So improvement come from eventually it will be probably a quarter of the capital at the end of the year that’s going to be a double digit return that needs to be must be a double digit return to 65 billion of non-productive capital we didn’t have to take that – and that’s partly we’ve done some investment part to bringing it on stream and we’ve to take cost across everything. All of those levers pull together on the return on capital I think few basis here, few basis points there, there is no quick fix.

We can’t move your capital base $200 million overnight but 6% is not acceptable, it has to be double digit or more through cycle really to be competitive with our competitors but with investors other choices.

Ben just on your $15 billion of CapEx you talked about over the next three years, just trying to get a sense of what kind of oil price scenario you have in your mind when you’re putting that out, is it some sort of V-shaped recovery where you’re going to get significantly higher prices towards the end of this year and to next year? And also has that been agreed with the joint venture partner who’re working on the same project because I presume you’re all going to have to look at the same lens if you like when making these sorts of decisions on pre-FID for instance would you have to do it right now?

And second thing is on the sensitivity on oil prices which John was referring to I think in first part of his question, I just wanted the 3.3 billion you talked about the $10, is that a pre mitigation number and where do you think from the dropdown perspective you should kind of force the organization to take that because as you were saying that’s going to make your first quarter numbers look very sick that’s really the sensitivity we’re looking at for the first quarter next year.

Your first question I’m not sure whether I complete got what you were going at $15 billion set we have to third as you mean that or? Yes I don’t think we had a V-shaped recovery in mind for that, I don’t want to go exactly into where we model that but basically what we did we looked on for a number of price scenarios that we had a number of categories of investments that we’d be looking at in terms of attractiveness, do ability et cetera et cetera and we came to the conclusion that under almost all negative scenarios that would be a significant tail that we would not want to do or would want to start deferring and then we had a significant amount of capital left as you can imagine that we would point to do even on the relatively sort of bleak lower oil price scenarios is a bit of fuzzy line of course between that and at some point in time we’ve to just say well do ability aspects coming to being precisely for the reason that you mentioned.

In some cases easier to defer a project because it is a little bit more under our control, all we know that our partner says well okay, I don’t mind dropping that one but the outlook that we have at the moment. And that’s how we made that first segregation.

So some of them are pretty much gone. The Qatar Chemicals project, you may have to take an FID decision you decide not to of course it's some point in time the question will come back again and say well that’s a different type of outlook could we reconsider that and the feedstock hasn't gone away and the market has gone away, so we could reconsider that but for now it's not just off the table, we're not recycling it.

So it has been a relatively precise exercise to single out these 40 projects and to put into one side. If there would be a very sharp V-shaped recovery yes we could of course consider bringing them.

But I hope you get the sense from the way I work with the numbers the fact that after deferring or cancelling $15 billion worth projects you still have a project suite left which is of course is a high graded project suite, we still would have to spend the same amount of capital next year as rather this year than last year. I hope you will get the impression of how rich our funnel actually is.

So bringing it all back it's never going to be completely compatible sort of balancing of return and growth that we were talking about. So you always come to do a little bit of pamperization and proving there is just going to be a whole lot more of it of course with the oil price being where it is.

So we've clarified at it.

$3.3 billion is a $10 price movement sensitivity on those earnings on cash flow if sustained for a year. And actually in fact the other change is that increases over the coming years because our oil price sensitivity grows, new production is more sensitive than old production and there is more of it when we get the next wave of projects [indiscernible] they are all oil price direct sensitive and most tax royalty regimes, is there mitigation?

Yes well we probably covered some of it especially regimes. There is some protection already 27% of the production including F&R, is a production sharing contract.

So it's on low end. That figure I gave you is roughly the linearity within the 1,710 range we're outsider probably already the range of linearity.

And there are the mitigations really at cost management the fiscal discussions we talked about and the trading capability. So we don’t entirely get caught on the way down.

We have very strong commodity trading position and our ability to take advantage of volatility is some protection to mitigate the low price environment in both gas and oil.

Okay I suggest we take the last question from you and then there is of course plenty of plan for more dialogue as we go out and have a drink together but I think you probably or certainly I could do with a slight break in a slightly different environment. Why don't you take the next question.

Yes the last question.

Sure it's Anish Kapadia from Tudor, Pickering. Three questions, please.

The first one was seeing that you have got a long-term oil price assumption of $90 just thinking about capital allocation for the longer term because we're seeing a lot change like over the fast years in terms of the breakeven of the U.S unconventional plays come down dramatically and that's without probably a further 20% fall in service cost in the U.S. And then looking at the U.S unconventional plays versus say Deepwater and that seems is onshore is lower risk in terms of geology, longer resources life and lower fiscal risk as well compared with the big operational risk that you take on from offshore project not necessarily a better breakeven.

So I am just wondering how do you think about over the longer-term over the longer term due to intend to put a lot more capital employed into U.S unconventional. And then the second question is just to try and understand cash flow movements on an underlying basis in 2015.

So you have had some kind of one-off benefits in 2014 from the likes of working capital from Majnoon cash flow. Just if you were in a kind of flat oil price scenario into 2015 and taking into account the disposals et cetera, how would you expect cash flow to move year-over-year given all those kind of one-off effects?

You want to take the second one. Yeah I think it's -- to some extent I think it's impossible to compare the two.

So if you perhaps fundamentally different characteristics and if you indeed look at an unconventional position yeah of course you could it's sort of lower risk and turns of the investment that you make one well at a time maybe look at more productablity as well. But typically also it is there is a smaller margin to play with.

So it is more flexible, it's more writable and it needs more -- it needs continuous CapEx injection in order to keep it going. And what we're looking at is much more a game of we have an existing asset on the balance sheet, four of them in North America together, $20 billion risk capital employed.

How much more capital do we want to put on top of that in order to bring it into productive use. And we can play around for that a little bit.

An Appomattox project is a multibillion dollar investment we have to take it in one go you cannot say I will let one well at a time or one piece of cake at a time. So therefore you have to take a big sallow and have to prepare yourself to indeed see that true.

But once it an operation you have completely different cash flow profile, very, very high cash margins because it takes relatively little to keep it in operation, of course has incredibly higher productive yield compared to what you see in unconventional field. So you have to have a little bit of ball in order to mix and match the financial profiles as you want to have in your portfolio.

You cannot, unless you are a mid-sized E&P company in the U.S., you cannot just say well I will just have unconventional portfolio we have to mix it then we have to understand how much we want to have in a different buckets and when the moment is out to bite up the big thing to chew when the moment is to nibble a bit on the unconventional space. So as more done sort of simply economic consideration coming into it.

The cash flow, good question. I’m not sure if flat oil price at 50 or 110 you are thinking but we are at still a 110 relative to 214 we would be seeing those turnarounds make a quite a big difference in probably offsetting the benefits of full ramp up of the project we have seen.

We don’t have a lot of big new projects coming on stream in 2015 obviously a lower oil price that impact is exaggerated in terms of absolute impact in terms of relative impact is better to be down in gas oil $50 and the 100 in terms of the value of the molecules in the Granby. So let’s give a straight answer as well because and we expect divestments to be low, much lower, but low, on an absolute sense.

We took five recycles to six recycles we will do well to get to 5 or 6 in the current environment I think. So is going to be a lower than that, which effectively may add $10 for the equivalent breakeven.

We have -- a year ago we took the strict option away from the dividend potentially you look at reintroducing it remember one reason we took it away was constrains around the buyback in the Dutch fiscal system to bring it back this year. We can remove some of the constraints et cetera.

So we believe the works on a few dollars a barrel or $10 a barrel breakeven equivalent, but is going to be a tough year. No question.

We are going to the first six months there are few drivers of the price backup on the fundamental, maybe it play that better in the second half of the year and that’s what we need to be preparing for. Suddenly we will in the 40s the cash generation it may not even be in the first season.

The divestments will be lower that’s why we need to be pretty tight on every little we have to ensure that we end 2015 and is good position as possible wherever the oil price is. And that’s a Board level discussion I quoted ongoing including yesterday.

It’s not any single.

Okay, but that semi forecast on oil price I think it probably too close. Thank you very much for being here today.

We do the first results on the 30th of April and Simon will be talking to you about that. I suggest we retire to the whole next door and continue to composition if you want to Simon and I again Hardy will be there to answer any sort of questions that you have.

Thank you very much.