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ROYAL DUTCH SHELL PLC 2ND QUARTER AND HALF YEAR 2014 UNAUDITED RESULTS * Royal Dutch Shell's second quarter 2014 earnings, on a current cost of supplies (CCS) basis (see Note 2), were $5.1 billion compared with $2.4 billion for the same quarter a year ago. Earnings included an identified net charge of $1.0 billion after tax, mainly reflecting impairments which were partly offset by divestment gains (see page 6). * Second quarter 2014 CCS earnings excluding identified items (see page 6) were $6.1 billion compared with $4.6 billion for the second quarter 2013, an increase of 33%. * Compared with the second quarter 2013, CCS earnings excluding identified items benefited from higher liquids production volumes and prices, the impact of the strengthening Australian dollar on a deferred tax liability, and higher contributions from Manufacturing. These items were partly offset by increased depreciation, higher costs, and the phasing of a dividend from an LNG venture into the third quarter of 2014. * Basic CCS earnings per share excluding identified items increased by 33% versus the same quarter last year. * Cash flow from operating activities for the second quarter 2014 was $8.6 billion, compared with $12.4 billion for the same quarter last year. Excluding working capital movements, cash flow from operating activities for the second quarter 2014 was $11.0 billion, compared with $8.4 billion for the second quarter 2013. * Capital investment for the second quarter 2014 was $8.5 billion. Net capital investment (see Note 2) for the second quarter 2014 was $1.1 billion, compared with $10.9 billion for the same period a year ago. * Total dividends distributed in the quarter were $3.0 billion, of which $1.0 billion were settled under the Scrip Dividend Programme. During the second quarter some 8.6 million A shares were bought back for cancellation for a consideration of $0.3 billion. Shell has now cancelled the Scrip Dividend Programme and scrip dividends will not be offered for the second quarter 2014 dividend. * Gearing at the end of the second quarter 2014 was 13.4%. * A second quarter 2014 dividend has been announced of $0.47 per ordinary share and $0.94 per American Depositary Share ("ADS"), an increase of 4% compared with the second quarter 2013. SUMMARY OF UNAUDITED RESULTS Quarters $ million Half year Q22014 Q1 2014 Q2 2013 %1 2014 2013 % Income attributable to Royal5,307 4,509 1,737 +206 Dutch Shell plc shareholders 9,816 9,913 -1 Current cost of supplies (CCS)(160) (44) 657 adjustment for Downstream (204) 432 5,147 4,465 2,394 +115 CCS earnings 9,612 10,345 -7 (979) (2,862) (2,206) Identified items2 (3,841) (1,775) CCS earnings excluding identified6,126 7,327 4,600 +33 items 13,453 12,120 +11 Of which: 4,722 5,710 3,526 Upstream 10,432 9,174 1,347 1,575 1,168 Downstream 2,922 3,016 Corporate and Non-controlling57 42 (94) interest 99 (70) Cash flow from operating8,641 13,984 12,444 -31 activities 22,625 24,003 -6 0.81 0.71 0.38 +113 Basic CCS earnings per share ($) 1.52 1.64 -7 1.62 1.42 0.76 Basic CCS earnings per ADS ($) 3.04 3.28 Basic CCS earnings per share0.97 1.17 0.73 +33 excl. identified items ($) 2.13 1.92 +11 Basic CCS earnings per ADS excl.1.94 2.34 1.46 identified items ($) 4.26 3.84 0.47 0.47 0.45 +4 Dividend per share ($) 0.94 0.90 +4 0.94 0.94 0.90 Dividend per ADS ($) 1.88 1.80 1 Q2 on Q2 change 2 See page 6 Royal Dutch Shell Chief Executive Officer Ben van Beurden commented: "We are making progress with the priorities I set out at the start of 2014: tobalance growth and returns by focusing on better financial performance,enhanced capital efficiency, and continued strong project delivery. Shell's strategy is founded on technological expertise, disciplined capitalinvestment, integrated operations, and large scale. This is underpinned by anunrelenting focus on safety. We aim to grow cash flow through the cycle anddeliver competitive shareholder returns. I am determined to get a tighter grip on business performance management in thecompany, and improve the balance between growth and returns. Our financial performance for the second quarter of 2014 was more robust thanyear-ago levels but I want to see stronger, more competitive results rightacross the company, particularly in Oil Products and North America resourcesplays. Improvement of financial performance in these two parts of the businesswill take time, but I see early momentum, which we must maintain. Sharper accountability in the company means that we are targeting our growthinvestment more effectively, focusing on areas of the business whereperformance improvement is most needed, and driving asset sales innon-strategic positions. The impairments we have announced today in Upstream Americas reflect therestructuring of Shell's resources plays portfolio. We see attractive growthopportunities there such as natural gas integration and liquids-rich shales. We are taking firm actions to improve Shell's capital efficiency by sellingselected assets and making tougher project decisions. We have completed some $8billion of asset sales so far in 2014. This represents good progress towardsour targets to focus the portfolio, and to maintain the financial framework inrobust health. We've continued to ramp up production at Mars B in the Gulf of Mexico - part ofShell's industry-leading deep-water portfolio - and our exploration programmeis delivering, with new finds in the Gulf of Mexico and Malaysia. Our dividend for the second quarter of 2014 is 4% up from year-ago levels. Weare expecting some $7 - $8 billion of share buybacks for 2014 and 2015combined, of which $1.6 billion were completed in the first half of this year.These expected buybacks and dividend distributions are expected to exceed $30billion over the two-year period. All of this underlines the company's recentimproved performance and future potential." SECOND QUARTER 2014 PORTFOLIO DEVELOPMENTS1 Upstream Shell continued to divest non-strategic Upstream positions during the secondquarter of 2014 with divestment proceeds totalling some $6.5 billion. During the quarter Shell completed a sell-down of 78.27 million shares inWoodside Petroleum Limited ("Woodside") in Australia for a consideration of $3billion, reducing Shell's interest from 23% to approximately 14%. Also in Australia, Shell completed the sale of its 8% interest in theWheatstone-lago joint venture and its 6.4% interest in the 8.9 million tonnesper annum ("mtpa") Wheatstone LNG project, which is under development, to theKuwait Foreign Petroleum Exploration Company for $1.5 billion. In Brazil, Shell completed the sale of its 23% interest in the Shell-operateddeep-water project BC-10 to Qatar Petroleum International for a considerationof $1.2 billion. In Canada, Shell agreed to divest its 100% interest in the Orion Steam AssistedGravity Drainage ("SAGD") project, currently producing approximately sixthousand barrels of oil equivalent per day ("boe/d"), to Osum Oil Sands Corpfor a consideration of some $0.3 billion, subject to closing. The deal isexpected to close in the third quarter 2014. Also in Canada, Shell signed a binding agreement to sell its entire interest inthe Burnt Timber, Hunter Valley and Panther River gas fields and associatedinfrastructure (current production of approximately four thousand boe/d) to CQEnergy Partnership for a consideration of some $50 million. The Burnt TimberGas Plant is not included in the sale and ceased operations in the secondquarter 2014. Shell also agreed to sell its interest in a portion of its dry gas Deep Basinassets in Canada (current production of some seven thousand boe/d) to MapanEnergy Ltd. for a consideration of some $0.1 billion, subject to closing. In Japan, Shell announced that it will begin supplying liquefied natural gas("LNG") to one of Japan's leading electric companies from October 2014. Thedeal, with Chubu Electric, includes an agreement to supply up to 12 cargoes ofLNG a year (0.7 mtpa) for the next 20 years. In the United States, Shell completed the divestment of its 100% interest inapproximately 106,000 net acres of the Eagle Ford liquids-rich shale ("LRS")asset (current production of some 20 thousand boe/d) to Sanchez EnergyCorporation for a consideration of some $0.6 billion. The agreement iseffective from January 1, 2014. Also in the United States, Shell completed the sale of its 50% interest inapproximately 312,000 net acres in the Niobrara and Sandwash basins for aconsideration of some $90 million. In the United Kingdom North Sea, Shell is considering the sale of the Anasuria,Nelson and Sean late-life assets, currently producing some 14 thousand boe/d. During the quarter, in Shell's heartlands exploration programme Shell announcedan oil discovery in the Norphlet play in the deep waters of the Gulf of Mexicowith the successful Rydberg exploration well (Shell interest 57.2%). Aspreviously reported, Shell participated in the non-operated Rosmari-1 discovery(Shell interest 85%) offshore Malaysia during the quarter, adding new gasresources. Shell had continued success with near-field exploration discoveries in a numberof countries. As part of its global exploration programme, Shell added new acreage positionsfollowing successful bidding results in New Zealand, the Netherlands and theGulf of Mexico in the United States. During the second quarter Shell entered the front end engineering and design("FEED") phase on the key non-operated project Val d'Agri Phase 2 (Shellinterest 39%) in Italy. This project is expected to deliver peak production ofsome 65 thousand boe/d after coming on-stream. In Upstream Americas resources plays (shale oil and gas), we have completed anew bottom-up review of our portfolio and strategy. The majority of near-terminvestments will be directed at North America liquids-rich shales, focused onappraisal in Western Canada and the Permian. Major divestments of non-coreliquids-rich shales positions are now complete. In Western Canada dry gas, thecompany has long-term growth potential related to LNG opportunities. Shell'sLower 48 dry gas positions, where we have established production and furtherexploration potential, remain under review and could potentially be the subjectof further impairments and/or asset sales. Downstream Downstream divestment proceeds totalled some $0.9 billion for the secondquarter 2014. In the United States, Shell announced that its wholly-owned subsidiary, ShellMidstream Partners, L.P., has filed a Registration Statement on Form S-1 withthe U.S. Securities and Exchange Commission related to the proposed initialpublic offering of common units representing limited partner interests. Shellintends to apply to list the common units on the New York Stock Exchange underthe ticker symbol "SHLX". The offering is expected to occur in the second halfof 2014. In July, Shell signed an agreement to become the first customer of new,dedicated LNG for transport infrastructure planned at the Port of Rotterdam inthe Netherlands. Shell has committed to buy capacity from the Gate terminal,which has enabled investment in the terminal expansion. This agreement isexpected to increase availability of LNG as a transport fuel for vessels innorthwest Europe. 1 See pages 20 and 21 for first quarter 2014 portfolio developments. KEY FEATURES OF THE SECOND QUARTER 2014 * Second quarter 2014 CCS earnings (see Note 2) were $5,147 million, 115% higher than for the same quarter a year ago. Second quarter 2014 earnings included an identified net charge of $1.0 billion after tax, mainly reflecting impairments which were partly offset by divestment gains (see page 6). * Second quarter 2014 CCS earnings excluding identified items (see page 6) were $6,126 million compared with $4,600 million for the second quarter 2013, an increase of 33%. * Compared with the second quarter 2013, CCS earnings excluding identified items benefited from higher liquids production volumes and prices, the impact of the strengthening Australian dollar on a deferred tax liability, and higher contributions from Manufacturing. These items were partly offset by increased depreciation, higher costs, and the phasing of a dividend from an LNG venture into the third quarter of 2014. * Basic CCS earnings per share increased by 113% versus the same quarter a year ago. * Basic CCS earnings per share excluding identified items increased by 33% versus the same quarter a year ago. * Cash flow from operating activities for the second quarter 2014 was $8.6 billion, compared with $12.4 billion for the same quarter last year. Excluding working capital movements, cash flow from operating activities for the second quarter 2014 was $11.0 billion, compared with $8.4 billion for the same quarter last year. * Net capital investment (see Note 2) for the second quarter 2014 was $1.1 billion. Capital investment for the second quarter 2014 was $8.5 billion and divestment proceeds were $7.4 billion. * Total dividends distributed in the second quarter 2014 were $3.0 billion, of which $1.0 billion were settled by issuing some 26.6 million A shares under the Scrip Dividend Programme for the first quarter 2014 dividend. * Under our share buyback programme some 8.6 million A shares were bought back for cancellation during the second quarter 2014 for a consideration of $0.3 billion. * Return on average capital employed on a reported income basis (see Note 8) was 7.9% at the end of the second quarter 2014, versus 12.1% at the end of the second quarter 2013. * Gearing was 13.4% at the end of the second quarter 2014 versus 10.3% at the end of the second quarter 2013. * Oil and gas production for the second quarter 2014 was 3,077 thousand boe/ d, in line with the second quarter 2013. Excluding the impact of divestments, Abu Dhabi license expiry, PSC price effects, and security impacts in Nigeria, second quarter 2014 production was 4% higher than for the same period last year. * Equity sales of LNG of 6.00 million tonnes for the second quarter 2014 were 28% higher than for the same quarter a year ago. * Oil products sales volumes for the second quarter 2014 were 4% higher than for the second quarter 2013. Chemicals sales volumes for the second quarter 2014 increased by 4% compared with the same quarter a year ago. * Supplementary financial and operational disclosure for the second quarter 2014 is available at www.shell.com/investor. SUMMARY OF IDENTIFIED ITEMS Earnings for the second quarter 2014 reflected the following items, which inaggregate amounted to a net charge of $979 million (compared with a net chargeof $2,206 million for the second quarter 2013), as summarised in the tablebelow: * Upstream earnings included a net charge of $902 million, reflecting impairments of $1,943 million, predominantly related to dry gas properties in the United States, triggered by a reduced capital allocation to these assets. These were partly offset by divestment gains of $1,230 million mainly related to Wheatstone and the sell-down of 78.27 million shares in Woodside. Identified items also included a net charge on fair value accounting of commodity derivatives and certain gas contracts of $44 million and a net charge of $145 million for other items, mainly comprised of a tax charge on an asset transfer. Upstream earnings for the second quarter 2013 included a net charge of $1,845 million. * Downstream earnings included a net charge of $76 million, reflecting a net charge on fair value accounting of commodity and derivatives of $50 million, a net impairment charge of $35 million, and a net charge of $119 million for other items, mainly related to a prior-year sale obligation. These items were partly offset by gains on divestments of $128 million. Downstream earnings for the second quarter 2013 included a net charge of $365 million. * Corporate results and Non-controlling interest included a net charge of $1 million. Earnings for the second quarter 2013 included a net gain of $4 million. SUMMARY OF IDENTIFIED ITEMS Quarters $ million Half year Q2 2014 Q1 20141 Q2 2013 2014 2013 Segment earnings impact of identified items: (902) (283) (1,845) Upstream (1,185) (1,672) (76) (2,580) (365) Downstream (2,656) (525) Corporate and Non-controlling(1) 1 4 interest 0 422 (979) (2,862) (2,206) Earnings impact (3,841) (1,775) 1 See page 21 These identified items are shown to provide additional insight into segmentearnings and income attributable to shareholders. They include the full impacton Shell's CCS earnings of the following items: * Divestment gains and losses * Impairments * Fair value accounting of commodity derivatives and certain gas contracts (see Note 7) * Redundancy and restructuring Further items may be identified in addition to the above. EARNINGS BY BUSINESS SEGMENT UPSTREAM Quarters $ million Half year Q2 2014 Q1 2014 Q2 2013 %1 2014 2013 % Upstream earnings excluding4,722 5,710 3,526 +34 identified items 10,432 9,174 +14 3,820 5,427 1,681 +127 Upstream earnings 9,247 7,502 +23 Upstream cash flow from8,919 9,075 8,143 +10 operating activities 17,994 17,848 +1 562 9,340 9,549 -94 Upstream net capital investment 9,902 16,919 -41 Liquids production available for1,499 1,481 1,502 0 sale (thousand b/d) 1,490 1,570 -5 Natural gas production available9,153 10,227 9,050 +1 for sale (million scf/d) 9,687 10,085 -4 Total production available for3,077 3,245 3,062 0 sale (thousand boe/d) 3,160 3,309 -5 Equity sales of LNG (million6.00 6.09 4.68 +28 tonnes) 12.09 9.83 +23 1 Q2 on Q2 change Second quarter Upstream earnings excluding identified items were $4,722 millioncompared with $3,526 million a year ago. Identified items were a net charge of$902 million, compared with a net charge of $1,845 million for the secondquarter 2013 (see page 6). Compared with the second quarter 2013, earnings excluding identified itemsbenefited from higher liquids production volumes and prices, includingcontributions from Deepwater in the Americas, Iraq, and Integrated Gas, as wellas the impact of the strengthening Australian dollar on a deferred taxliability. These items were partly offset by increased depreciation, highercosts, and the phasing of a dividend from an LNG venture into the third quarterof 2014. Global liquids realisations were 3% higher than for the second quarter 2013.Global natural gas realisations were 8% lower than for the same quarter a yearago, with a 16% increase in the Americas and a 15% decrease outside theAmericas. Second quarter 2014 production was 3,077 thousand boe/d compared with 3,062thousand boe/d a year ago. Liquids production was in line with the secondquarter 2013 and natural gas production increased by 1%. Excluding the impactof divestments, Abu Dhabi license expiry, PSC price effects, and securityimpacts in Nigeria, second quarter 2014 production was 4% higher than for thesame period last year. The continuing ramp-up of fields and new field start-ups, in particular Majnoonin Iraq and Mars B in the Gulf of Mexico, contributed some 140 thousand boe/dto production for the second quarter 2014, more than offsetting the impact offield declines. Production also benefited from a number of new wells inexisting fields and improved well performance in the Gulf of Mexico. Equity sales of LNG of 6.00 million tonnes increased by 28% compared to thesame quarter a year ago, mainly reflecting the contribution from theacquisition of Repsol's LNG business and decreased feedgas disruptions inNigeria. Half year Upstream earnings excluding identified items were $10,432 millioncompared with $9,174 million for the first half year 2013. Identified itemswere a net charge of $1,185 million, compared with a net charge of $1,672million for the first half year 2013 (see page 6). Compared with the first half year 2013, Upstream earnings excluding identifieditems reflected increased liquids production volumes and prices, includingcontributions from Iraq, Deepwater in the Americas, and Integrated Gas, gastrading results as well as the strengthening Australian dollar on a deferredtax liability. Earnings were impacted by increased depreciation, higher costsand well write-offs. Global liquids realisations were in line with the first half year 2013. Globalnatural gas realisations were 2% lower than for the first half year 2013, witha 32% increase in the Americas and a 9% decrease outside the Americas. Half year 2014 production was 3,160 thousand boe/d compared with 3,309 thousandboe/d for the same period a year ago. Liquids production was down 5% andnatural gas production decreased by 4% compared with the first half year 2013.Excluding the impact of divestments, Abu Dhabi license expiry, PSC priceeffects, security impacts in Nigeria and the NAM curtailment, first half year2014 production was in line with the same period last year. Equity sales of LNG of 12.09 million tonnes were 23% higher than for the firsthalf year 2013, reflecting the contribution from the acquisition of Repsol'sLNG business and decreased feedgas disruptions in Nigeria, partly offset byhigher planned maintenance at some LNG plants. DOWNSTREAM Quarters $ million Half year Q2 2014 Q1 2014 Q2 2013 %1 2014 2013 % Downstream CCS earnings1,347 1,575 1,168 +15 excluding identified items 2,922 3,016 -3 1,271 (1,005) 803 +58 Downstream CCS earnings 266 2,491 -89 Downstream cash flow from262 3,145 3,761 -93 operating activities 3,407 4,126 -17 Downstream net capital543 776 1,328 -59 investment 1,319 2,148 -39 Refinery processing intake3,034 2,965 2,914 +4 (thousand b/d) 3,000 2,902 +3 Oil products sales volumes6,453 6,319 6,212 +4 (thousand b/d) 6,386 6,109 +5 Chemicals sales volumes4,387 4,285 4,211 +4 (thousand tonnes) 8,672 8,354 +4 1 Q2 on Q2 change Second quarter Downstream earnings excluding identified items were $1,347million compared with $1,168 million for the second quarter 2013. Identifieditems were a net charge of $76 million, compared with a net charge of $365million for the second quarter 2013 (see page 6). Compared with the second quarter 2013, Downstream earnings excluding identifieditems benefited from higher contributions from Manufacturing. This was despiteweaker refining industry conditions, in particular in Asia and Europe. Earningswere impacted by increased costs resulting from one-off provisions, and lowercontributions from trading and supply activities. Contributions from Chemicalswere higher as a result of improved base chemicals industry conditions mainlyin North America as well as lower planned maintenance, partly offset by weakerintermediates industry conditions. Downstream cash flow from operating activities was impacted by negative workingcapital movements in Oil Products primarily driven by inventory effects. Refinery intake volumes were 4% higher compared with the same quarter lastyear, mainly as a result of improved operational performance. Refineryavailability increased to 94% compared with 92% in the second quarter 2013. Oil products sales volumes increased by 4% compared with the same period a yearago reflecting higher trading volumes partly offset by lower marketing volumes. Chemicals sales volumes increased by 4% compared with the same quarter lastyear, mainly as a result of higher utilisation. Chemicals manufacturing plantavailability increased to 90% from 88% for the second quarter 2013, as a resultof lower planned maintenance, partly offset by higher unplanned maintenance. Half year Downstream earnings excluding identified items were $2,922 millioncompared with $3,016 million for the first half year 2013. Identified itemswere a net charge of $2,656 million, compared with a net charge of $525 millionfor the first half year 2013 (see page 6). Compared with the first half year 2013, Downstream earnings excludingidentified items were impacted by lower contributions from trading and supplyand weaker refining industry conditions in Asia and Europe. These items werepartly offset by a stronger refining margin environment in the United StatesGulf Coast and improved refining operational performance. Contributions fromChemicals were higher as a result of improved base chemicals industryconditions primarily in North America as well as lower planned maintenance,partly offset by weaker intermediates industry conditions. Refinery intake volumes were 3% higher compared with the first half year 2013,mainly as a result of improved operational performance. Refinery availabilityincreased to 93% from 92% for the same period a year ago. Oil products sales volumes increased by 5% compared with the same period a yearago, mainly as a result of higher trading volumes partly offset by lowermarketing volumes. Chemicals sales volumes increased by 4% compared with the first half year 2013,mainly as a result of higher utilisation. Chemicals manufacturing plantavailability increased to 93% from 90% for the first half year 2013, as aresult of lower planned maintenance, partly offset by higher unplannedmaintenance. CORPORATE AND NON-CONTROLLING INTEREST Quarters $ million Half year Q2 2014 Q1 2014 Q2 2013 2014 2013 Corporate and Non-controlling interest57 42 (94) excl. identified items 99 (70) Of which: 101 76 (77) Corporate 177 11 (44) (34) (17) Non-controlling interest (78) (81) 56 43 (90) Corporate and Non-controlling interest 99 352 Second quarter Corporate results and Non-controlling interest excludingidentified items were a gain of $57 million, compared with a loss of $94million for the same period last year. Identified items for the second quarter2014 were a net charge of $1 million, whereas earnings for the second quarter2013 included a net gain of $4 million (see page 6). Compared with the second quarter 2013, Corporate results excluding identifieditems mainly reflected favourable currency exchange rate effects, higher taxcredits, and lower costs, partly offset by increased net interest expense. Half year Corporate results and Non-controlling interest excluding identifieditems were a gain of $99 million compared with a loss of $70 million for thefirst half year 2013. Identified items for the first half year 2014 offset tonil, compared with a net gain of $422 million for the first half year 2013 (seepage 6). Compared with the first half year 2013, Corporate results excluding identifieditems mainly reflected favourable currency exchange rate effects and lowercosts, partly offset by higher net interest expense. FORTHCOMING EVENTS On September 5, 2014 an Investor Day will be held in New York, United States. Third quarter 2014 results and third quarter 2014 dividend are scheduled to beannounced on October 30, 2014. UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF INCOME Quarters $ million Half year Q2 2014 Q1 2014 Q2 2013 %1 2014 2013 % 111,222 109,658 112,669 Revenue 220,880 225,479 Share of profit of joint1,716 2,070 1,433 ventures and associates 3,786 3,736 2,336 351 246 Interest and other income 2,687 647 Total revenue and other115,274 112,079 114,348 income 227,353 229,862 85,296 83,835 88,901 Purchases 169,131 175,504 Production and manufacturing7,839 7,179 7,000 expenses 15,018 13,458 Selling, distribution and3,755 3,434 3,661 administrative expenses 7,189 7,248 274 283 305 Research and development 557 599 1,128 927 1,228 Exploration 2,055 1,876 Depreciation, depletion and7,354 7,424 7,502 amortisation 14,778 11,727 505 452 379 Interest expense 957 780 9,123 8,545 5,372 +70 Income before taxation 17,668 18,670 -5 3,778 4,003 3,631 Taxation 7,781 8,703 5,345 4,542 1,741 +207 Income for the period 9,887 9,967 -1 Income attributable to38 33 4 non-controlling interest 71 54 Income attributable to Royal5,307 4,509 1,737 +206 Dutch Shell plc shareholders 9,816 9,913 -1 1 Q2 on Q2 change EARNINGS PER SHARE Quarters $ Half year Q2 2014 Q1 2014 Q2 2013 2014 2013 0.84 0.72 0.28 Basic earnings per share 1.56 1.57 0.84 0.72 0.27 Diluted earnings per share 1.56 1.57 SHARES1 Quarters Millions Half year Q2 2014 Q1 2014 Q2 2013 2014 2013 Weighted average number of shares as the basis for: 6,323.0 6,287.8 6,313.7 Basic earnings per share 6,305.5 6,311.3 6,323.4 6,288.9 6,316.9 Diluted earnings per share 6,305.8 6,314.6 Shares outstanding at the end of6,341.7 6,321.8 6,296.0 the period 6,341.7 6,296.0 1 Royal Dutch Shell plc ordinary shares of euro 0.07 each Notes 1 to 6 are an integral part of these unaudited Condensed ConsolidatedInterim Financial Statements. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Quarters $ million Half year Q2 2014 Q1 2014 Q2 2013 2014 2013 5,345 4,542 1,741 Income for the period 9,887 9,967 Other comprehensive income net of tax: Items that may be reclassified to income in later periods: 591 (551) (1,024) -Currency translation differences 40 (2,676) -Unrealised (losses)/gains on(182) 28 (71) securities (154) (40) (18) 19 142 -Cash flow hedging (losses)/gains 1 155 -Share of other comprehensive income /(loss) of joint ventures and5 (7) (29) associates (2) (85) 396 (511) (982) Total (115) (2,646) Items that are not reclassified to income in later periods: (253) (546) 584 -Retirement benefits remeasurements (799) 2,020 (253) (546) 584 Total (799) 2,020 Other comprehensive income/(loss)143 (1,057) (398) for the period (914) (626) 5,488 3,485 1,343 Comprehensive income for the period 8,973 9,341 Comprehensive income/(loss) attributable to non-controlling48 29 (22) interest 77 3 Comprehensive income attributable to Royal Dutch Shell plc5,440 3,456 1,365 shareholders 8,896 9,338 Notes 1 to 6 are an integral part of these unaudited Condensed ConsolidatedInterim Financial Statements. CONDENSED CONSOLIDATED BALANCE SHEET $ million Jun 30, 2014 Mar 31, 2014 Dec 31, 2013 Assets Non-current assets: Intangible assets1 7,423 7,482 4,394 Property, plant and equipment 193,069 194,608 191,897 Joint ventures and associates 34,455 35,909 34,613 Investments in securities 4,647 4,761 4,715 Deferred tax 6,557 6,177 5,785 Retirement benefits 3,439 3,197 3,574 Trade and other receivables 9,121 10,036 9,191 258,711 262,170 254,169 Current assets: Inventories 31,361 28,829 30,009 Trade and other receivables 65,225 63,670 63,638 Cash and cash equivalents1 15,419 11,924 9,696 112,005 104,423 103,343 Total assets 370,716 366,593 357,512 Liabilities Non-current liabilities: Debt1 38,901 41,236 36,218 Trade and other payables 4,167 4,281 4,065 Deferred tax 11,950 11,882 11,943 Retirement benefits 11,967 11,385 11,182 Decommissioning and other provisions 22,714 22,298 19,698 89,699 91,082 83,106 Current liabilities: Debt1 5,221 4,493 8,344 Trade and other payables 72,495 70,738 70,112 Taxes payable 13,542 13,488 11,173 Retirement benefits 389 387 382 Decommissioning and other provisions 3,257 3,275 3,247 94,904 92,381 93,258 Total liabilities 184,603 183,463 176,364 Equity attributable to Royal Dutch Shellplc shareholders 185,015 182,028 180,047 Non-controlling interest 1,098 1,102 1,101 Total equity 186,113 183,130 181,148 Total liabilities and equity 370,716 366,593 357,512 1 See Note 6 Notes 1 to 6 are an integral part of these unaudited Condensed ConsolidatedInterim Financial Statements. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Equity attributable to Royal Dutch Shell plc shareholders Shares Share held in Other Retained Non-controlling Total$ million capital trust reserves earnings Total interest equity At January 1, 2014 542 (1,932) (2,037) 183,474 180,047 1,101 181,148 Comprehensiveincome for theperiod - - (920) 9,816 8,896 77 8,973 Capitalcontributions from,and other changesin, non-controllinginterest - - - 3 3 (7) (4) Dividends paid - - - (5,862) (5,862) (73) (5,935) Scrip dividends1 6 - (6) 2,399 2,399 - 2,399 Repurchases ofshares2 (4) - 4 (1,028) (1,028) - (1,028) Shares held intrust: net sales/(purchases) anddividends received - 809 - 56 865 - 865 Share-basedcompensation - - (305) - (305) - (305) At June 30, 2014 544 (1,123) (3,264) 188,858 185,015 1,098 186,113 At January 1, 2013 542 (2,287) (3,752) 180,246 174,749 1,433 176,182 Comprehensiveincome for theperiod - - (575) 9,913 9,338 3 9,341 Capitalcontributions from,and other changesin, non-controllinginterest - - - - - (2) (2) Dividends paid - - - (5,598) (5,598) (80) (5,678) Scrip dividends1 4 - (4) 1,647 1,647 - 1,647 Repurchases ofshares2 (6) - 6 (3,077) (3,077) - (3,077) Shares held intrust: net sales/(purchases) anddividends received - 559 - 59 618 - 618 Share-basedcompensation - - (430) (380) (810) - (810) At June 30, 2013 540 (1,728) (4,755) 182,810 176,867 1,354 178,221 1 Under the Scrip Dividend Programme some 64.6 million A shares, equivalent to$2.4 billion, were issued during the first half year 2014 and some 49.2 millionA shares, equivalent to $1.6 billion, were issued during the first half year2013. On May 22, 2014, Shell announced the cancellation of its Scrip DividendProgramme with effect from the second quarter 2014 interim dividend onwards. 2 Includes shares committed to repurchase and repurchases subject to settlementat the end of the quarter Notes 1 to 6 are an integral part of these unaudited Condensed ConsolidatedInterim Financial Statements. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Quarters $ million Half year Q2 2014 Q1 2014 Q2 2013 2014 2013 Cash flow from operating activities 5,345 4,542 1,741 Income for the period 9,887 9,967 Adjustment for: 4,336 4,400 4,048 - Current taxation 8,736 8,940 468 378 301 - Interest expense (net) 846 658 - Depreciation, depletion and7,355 7,424 7,502 amortisation 14,779 11,727 - Net (gains)/losses on sale of(2,203) 41 (44) assets (2,162) (257) - (Increase)/decrease in working(2,335) 875 4,085 capital (1,460) 4,119 - Share of profit of joint(1,716) (2,070) (1,433) venture and associates (3,786) (3,736) - Dividends received from joint1,768 1,507 2,703 ventures and associates 3,275 3,945 - Deferred taxation, retirement benefits, decommissioning (396) (308) (845) and other provisions (704) (856) 399 529 784 - Other 928 811 Net cash from operating13,021 17,318 18,842 activities (pre-tax) 30,339 35,318 (4,380) (3,334) (6,398) Taxation paid (7,714) (11,315) Net cash from operating8,641 13,984 12,444 activities 22,625 24,003 Cash flow from investing activities (7,872) (7,397) (8,987) Capital expenditure1 (15,269) (16,849) Investments in joint ventures and(493) (889) (291) associates (1,382) (663) 3,539 306 319 Proceeds from sales of assets 3,845 701 Proceeds from sales of joint3,671 56 63 ventures and associates 3,727 217 188 152 (347) Other investments (net) 340 (327) 31 58 71 Interest received 89 107 Net cash used in investing(936) (7,714) (9,172) activities (8,650) (16,814) Cash flow from financing activities Net decrease in debt with maturity period within three(1,397) (1,297) (370) months (2,694) (237) 140 3,195 198 Other debt: New borrowings 3,335 378 (251) (2,933) (3,556) Repayments (3,184) (5,741) (398) (368) (176) Interest paid (766) (334) Change in non-controlling(13) - 8 interest (13) 1 Cash dividends paid to: - Royal Dutch Shell plc(1,964) (1,499) (2,043) shareholders (3,463) (3,951) (45) (28) (59) - Non-controlling interest (73) (80) (346) (1,241) (1,934) Repurchases of shares (1,587) (2,479) Shares held in trust: net (purchases)/sales and dividends90 123 (432) received 213 (442) Net cash used in financing(4,184) (4,048) (8,364) activities (8,232) (12,885) Currency translation differences relating to cash and (26) 6 18 cash equivalents (20) (314) Increase/(decrease) in cash and3,495 2,228 (5,074) cash equivalents 5,723 (6,010) Cash and cash equivalents at11,924 9,696 17,614 beginning of period 9,696 18,550 Cash and cash equivalents at end15,419 11,924 12,540 of period 15,419 12,540 1 See Note 6 Notes 1 to 6 are an integral part of these unaudited Condensed ConsolidatedInterim Financial Statements. NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS 1. Basis of preparation These unaudited Condensed Consolidated Interim Financial Statements ("InterimStatements") of Royal Dutch Shell plc and its subsidiaries (collectivelyreferred to as Shell) have been prepared in accordance with IAS 34 InterimFinancial Reporting as adopted by the European Union and as issued by theInternational Accounting Standards Board and on the basis of the sameaccounting principles as, and should be read in conjunction with, the AnnualReport and Form 20-F for the year ended December 31, 2013 (pages 105 to 110) asfiled with the U.S. Securities and Exchange Commission. Shell's operating plan for the foreseeable future demonstrates its ability tooperate its cash-generating activities, selling products to a diversifiedcustomer base. These activities are expected to generate sufficient cash toenable Shell to service its financing requirements, pay dividends and fund itsinvesting activities. As a result, the Directors have a reasonable expectationthat Shell has adequate resources to continue in operational existence for theforeseeable future and continue to adopt the going concern basis of accountingin preparing the financial statements contained in this Report. The financial information presented in the Interim Statements does notconstitute statutory accounts within the meaning of section 434(3) of theCompanies Act 2006. Statutory accounts for the year ended December 31, 2013were published in Shell's Annual Report and a copy was delivered to theRegistrar of Companies in England and Wales. The auditors' report on thoseaccounts was unqualified, did not include a reference to any matters to whichthe auditors drew attention by way of emphasis without qualifying the reportand did not contain a statement under sections 498(2) or 498(3) of theCompanies Act 2006. 2. Segment information Segment earnings are presented on a current cost of supplies basis (CCSearnings). On this basis, the purchase price of volumes sold during the periodis based on the current cost of supplies during the same period after makingallowance for the tax effect. CCS earnings therefore exclude the effect ofchanges in the oil price on inventory carrying amounts. Net capital investment (see Note 9) is defined as capital expenditure asreported in the Condensed Consolidated Statement of Cash Flows, adjusted for:proceeds from disposals (excluding other investments (net) in the Corporatesegment); exploration expense excluding exploration wells written off;investments in joint ventures and associates; and leases and other items. CCS earnings and net capital investment information are the dominant measuresused by the Chief Executive Officer for the purposes of making decisions aboutallocating resources and assessing performance. Information by business segment: Quarters $ million Half year Q2 2014 Q2 2013 2014 2013 Third-party revenue 10,658 12,085 Upstream 23,671 24,461 100,548 100,534 Downstream 197,151 200,943 16 50 Corporate 58 75 111,222 112,669 Total third-party revenue 220,880 225,479 Inter-segment revenue 12,621 10,353 Upstream 24,872 22,495 463 158 Downstream 1,071 401 - - Corporate - - Segment earnings 3,820 1,681 Upstream1 9,247 7,502 1,271 803 Downstream2 266 2,491 100 (73) Corporate 177 418 5,191 2,411 Total segment earnings 9,690 10,411 1 Second quarter 2014 Upstream earnings included an impairment charge of $1,943million after taxation, partly offset by divestment gains of $1,230 millionafter taxation. Second quarter 2013 Upstream earnings included an impairmentcharge of $2,071 million after taxation. 2 First quarter 2014 Downstream earnings included an impairment charge of $2,284million related to refineries in Asia and Europe. Quarters $ million Half year Q2 2014 Q2 2013 2014 2013 5,191 2,411 Total segment earnings 9,690 10,411 Current cost of supplies adjustment: 151 (794) Purchases 143 (681) (42) 218 Taxation (43) 190 Share of profit of joint ventures and45 (94) associates 97 47 5,345 1,741 Income for the period 9,887 9,967 3. Share capital Issued and fully paid Sterling deferred Ordinary shares of euro 0.07 each shares Number of shares A B of £1 each At January 1, 2014 3,898,011,213 2,472,839,187 50,000 Scrip dividends 64,568,758 - - Repurchases of shares (8,620,000) (32,428,573) - At June 30, 2014 3,953,959,971 2,440,410,614 50,000 At January 1, 2013 3,772,388,687 2,617,715,189 50,000 Scrip dividends 49,223,025 - - Repurchases of shares - (72,247,018) - At June 30, 2013 3,821,611,712 2,545,468,171 50,000 Nominal value Ordinary shares of euro 0.07 each $ million A B Total At January 1, 2014 333 209 542 Scrip dividends 6 - 6 Repurchases of shares (1) (3) (4) At June 30, 2014 338 206 544 At January 1, 2013 321 221 542 Scrip dividends 4 - 4 Repurchases of shares - (6) (6) At June 30, 2013 325 215 540 The total nominal value of sterling deferred shares is less than $1 million. At Royal Dutch Shell plc's Annual General Meeting on May 20, 2014, the Boardwas authorised to allot ordinary shares in Royal Dutch Shell plc, and to grantrights to subscribe for or to convert any security into ordinary shares inRoyal Dutch Shell plc, up to an aggregate nominal amount of euro 147 million(representing 2,100 million ordinary shares of euro 0.07 each), and to listsuch shares or rights on any stock exchange. This authority expires at theearlier of the close of business on August 20, 2015, and the end of the AnnualGeneral Meeting to be held in 2015, unless previously renewed, revoked orvaried by Royal Dutch Shell plc in a general meeting. 4. Other reserves Accumulated Share Capital Share other Merger premium redemption plan comprehensive$ million reserve1 reserve1 reserve2 reserve income Total At January 1, 2014 3,411 154 75 1,871 (7,548) (2,037) Other comprehensiveloss attributable toRoyal Dutch Shell plcshareholders - - - - (920) (920) Scrip dividends (6) - - - - (6) Repurchases of shares - - 4 - - 4 Share-basedcompensation - - - (305) - (305) At June 30, 2014 3,405 154 79 1,566 (8,468) (3,264) At January 1, 2013 3,423 154 63 2,028 (9,420) (3,752) Other comprehensiveloss attributable toRoyal Dutch Shell plcshareholders - - - - (575) (575) Scrip dividends (4) - - - - (4) Repurchases of shares - - 6 - - 6 Share-basedcompensation - - - (430) - (430) At June 30, 2013 3,419 154 69 1,598 (9,995) (4,755) 1 The merger reserve and share premium reserve were established as aconsequence of Royal Dutch Shell plc becoming the single parent company ofRoyal Dutch Petroleum Company and The "Shell" Transport and Trading Company,plc, now The Shell Transport and Trading Company Limited, in 2005. 2 The capital redemption reserve was established in connection with repurchasesof shares of Royal Dutch Shell plc. 5. Derivative contracts The table below provides the carrying amounts of derivatives contracts held,disclosed in accordance with IFRS 13 Fair Value Measurement. $ million Jun 30, 2014 Mar 31, 2014 Dec 31, 2013 Included within: Trade and other receivables - non-current 1,587 1,761 1,772 Trade and other receivables - current 8,393 7,577 6,445 Trade and other payables - non-current 497 569 587 Trade and other payables - current 8,949 7,944 6,474 As disclosed in the Consolidated Financial Statements for the year endedDecember 31, 2013, presented in the Annual Report and Form 20-F for that year,Shell is exposed to the risks of changes in fair value of its financial assetsand liabilities. The fair values of the financial assets and liabilities aredefined as the price that would be received to sell an asset or paid totransfer a liability in an orderly transaction between market participants atthe measurement date. Methods and assumptions used to estimate the fair valuesat June 30, 2014 are consistent with those used in the year ended December 31,2013, and the carrying amounts of derivative contracts measured usingpredominantly unobservable inputs has not changed materially since that date. The fair value of debt excluding finance lease liabilities at June 30, 2014,was $39,047 million (March 31, 2014: $39,967 million; December 31, 2013:$40,569 million). Fair value is determined from the prices quoted for thosesecurities. 6. Acquisition of Repsol LNG businesses On January 1, 2014, Shell completed the acquisition from Repsol S.A. of its LNGoperations located in Trinidad and Tobago and Peru and related shipping andmarketing activities, as reported in the Annual Report and Form 20-F for theyear ended December 31, 2013 (page 139). Cash consideration was $4.1 billion, of which $3.4 billion was transferred onDecember 31, 2013 and $0.7 billion on January 2, 2014. After taking account ofcash balances of $0.3 billion in the entities acquired, the impact on capitalexpenditure in the Condensed Consolidated Statement of Cash Flows was $3.4billion and $0.4 billion in the fourth quarter 2013 and the first quarter 2014respectively. The impact on net capital investment, which also reflected theinclusion of finance lease liabilities assumed on January 1, 2014, was $3.4billion and $2.0 billion in the fourth quarter 2013 and the first quarter 2014respectively. The updated fair values of the net assets acquired at January 1, 2014 and thefair value of the consideration paid were as follows: $ million Fair value1 Net assets acquired: Intangible assets 3,273 Property, plant and equipment 1,198 Joint ventures and associates 531 Cash and cash equivalents 329 Other assets 424 Debt (1,601) Other liabilities (39) Consideration paid 4,115 1 The determination of the fair values of the net assets acquired isprovisional and will be subject to further review during the 12 months from theacquisition date. 7. Impacts of accounting for derivatives In the ordinary course of business Shell enters into contracts to supply orpurchase oil and gas products, and also enters into derivative contracts tomitigate resulting economic exposures (generally price exposure). Derivativecontracts are carried at period-end market price (fair value), with movementsin fair value recognised in income for the period. Supply and purchasecontracts entered into for operational purposes are, by contrast, recognisedwhen the transaction occurs (see also below); furthermore, inventory is carriedat historical cost or net realisable value, whichever is lower. As a consequence, accounting mismatches occur because: (a) the supply orpurchase transaction is recognised in a different period; or (b) the inventoryis measured on a different basis. In addition, certain UK gas contracts held by Upstream are, due to pricing ordelivery conditions, deemed to contain embedded derivatives or written optionsand are also required to be carried at fair value even though they are enteredinto for operational purposes. The accounting impacts of the aforementioned are reported as identified itemsin this Report. 8. Return on average capital employed Return on average capital employed (ROACE) measures the efficiency of Shell'sutilisation of the capital that it employs and is a common measure of businessperformance. In this calculation, ROACE is defined as the sum of income for thecurrent and previous three quarters, adjusted for after-tax interest expense,as a percentage of the average capital employed for the same period. Capitalemployed consists of total equity, current debt and non-current debt. 9. Liquidity and capital resources Second quarter net cash from operating activities was $8.6 billion comparedwith $12.4 billion for the same period last year. Total current and non-current debt decreased to $44.1 billion at June 30, 2014from $45.7 billion at March 31, 2014 while cash and cash equivalents increasedto $15.4 billion at June 30, 2014 from $11.9 billion at March 31, 2014. No newdebt was issued under the US shelf registration or under the euro medium-termnote programme during the second quarter of 2014. Net capital investment for the second quarter 2014 was $1.1 billion, of which$0.6 billion in Upstream and $0.5 billion in Downstream. Net capital investmentfor the same period of 2013 was $10.9 billion, of which $9.5 billion inUpstream, $1.3 billion in Downstream and $0.1 billion in Corporate. Dividends of $0.47 per share are announced on July 31, 2014 in respect of thesecond quarter. These dividends are payable on September 25, 2014. In the caseof B shares, the dividends will be payable through the dividend accessmechanism and are expected to be treated as UK-source rather than Dutch-source.See the Annual Report and Form 20-F for the year ended December 31, 2013 foradditional information on the dividend access mechanism. On May 22, 2014, Shell announced the cancellation of its Scrip DividendProgramme with effect from the second quarter 2014 interim dividend onwards. Half year net cash from operating activities was $22.6 billion compared with$24.0 billion for the same period last year. Total current and non-current debt decreased to $44.1 billion at June 30, 2014from $44.6 billion at December 31, 2013 while cash and cash equivalentsincreased to $15.4 billion at June 30, 2014 from $9.7 billion at December 31,2013. New debt was issued under the euro medium-term note programme during thefirst half 2014. Net capital investment for the first half 2014 was $11.3 billion, of which $9.9billion in Upstream, $1.3 billion in Downstream and $0.1 billion in Corporate.Net capital investment for the same period of 2013 was $19.1 billion, of which$16.9 billion in Upstream, $2.1 billion in Downstream and $0.1 billion inCorporate. PRINCIPAL RISKS AND UNCERTAINTIES The principal risks and uncertainties affecting Shell are described in the RiskFactors section of the Annual Report and Form 20-F for the year ended December31, 2013 (pages 11 to 14) and are summarised below. There are no materialchanges in those Risk Factors for the remaining 6 months of the financial year. * We are exposed to fluctuating prices of crude oil, natural gas, oil products and chemicals. * Our ability to achieve strategic objectives depends on how we react to competitive forces. * As our business model involves treasury and trading risks, we are affected by the global macroeconomic environment as well as financial and commodity market conditions. * Our future hydrocarbon production depends on the delivery of large and complex projects, as well as on our ability to replace proved oil and gas reserves. * An erosion of our business reputation would have a negative impact on our brand, our ability to secure new resources and our licence to operate. * Our future performance depends on the successful development and deployment of new technologies. * Rising climate change concerns could lead to additional regulatory measures that may result in project delays and higher costs. * The nature of our operations exposes us to a wide range of health, safety, security and environment risks. * Shell mainly self-insures its risk exposures. * A further erosion of the business and operating environment in Nigeria would adversely impact Shell. * We operate in more than 70 countries that have differing degrees of political, legal and fiscal stability. This exposes us to a wide range of political developments that could result in changes to laws and regulations. In addition, Shell and its joint ventures and associates face the risk of litigation and disputes worldwide. * Our operations expose us to social instability, civil unrest, terrorism, acts of war, piracy and government sanctions that could have an adverse impact on our business. * We rely heavily on information technology systems for our operations. * We have substantial pension commitments, whose funding is subject to capital market risks. * The estimation of proved oil and gas reserves involves subjective judgements based on available information and the application of complex rules, so subsequent downward adjustments are possible. * Many of our major projects and operations are conducted in joint arrangements or associates. This may reduce our degree of control, as well as our ability to identify and manage risks. * Violations of antitrust and competition law carry fines and expose us and/ or our employees to criminal sanctions and civil suits. * Violations of anti-bribery and corruption law carry fines and expose us and /or our employees to criminal sanctions and civil suits. * Violations of data protection laws carry fines and expose us and/or our employees to criminal sanctions and civil suits. * The Company's Articles of Association determine the jurisdiction for shareholder disputes. This might limit shareholder remedies. FIRST QUARTER 2014 PORTFOLIO DEVELOPMENTS Upstream In Brazil, Shell announced an agreement to sell a 23% interest in theShell-operated deep-water project BC-10 to Qatar Petroleum International for aconsideration of some $1 billion. Subject to regulatory approval, thetransaction is expected to close in 2014. In Brunei, final investment decision ("FID") was taken on the Maharaja LelaSouth ("ML South") development (Shell interest 35%). The development isexpected to deliver peak production of 35 thousand barrels of oil equivalentper day ("boe/d"). Shell successfully commenced export of its first crude from the Majnoon oilfield in Iraq, where production exceeded the 175,000 barrels per day (b/d)First Commercial Production target which initiated the commencement of costrecovery. In the United Kingdom, Shell entered into an agreement with the government toprogress the Peterhead Carbon Capture and Storage ("CCS") project to the nextphase of front-end engineering and design ("FEED"). The project aims to captureand store 10 million tonnes of CO2 over 10 years. If successful, the projectcould represent the first industrial-scale application of CCS technology at agas-fired power station anywhere in the world. In the United States, Shell announced first production from the Mars Bdeep-water development (Shell interest 71.5%) in the Gulf of Mexico. TheOlympus platform was completed and installed more than six months ahead ofschedule, allowing for early production. Olympus is Shell's seventh, andlargest, floating deep-water platform in the Gulf of Mexico and extends thelife of the overall Mars basin to around 2050. It is expected that the projectwill ramp up to a peak production of 100 thousand boe/d in 2016. Also in the United States, Shell reached an agreement to sell its 50% interestin approximately 312,000 acres in the Niobrara and Sandwash basins for aconsideration of some $90 million. Subject to regulatory approval, the deal isexpected to close in May, 2014. Shell commenced FEED on the Appomattox deep-water development project (Shellinterest 80%) in the Gulf of Mexico, United States. Including the Vicksburg Adiscovery (Shell interest 75%), the resources associated with this developmentare estimated to be greater than 600 million barrels of oil equivalent ("boe").The project is expected to deliver peak production of 150 thousand boe/d. The Siakap North-Petai development (Shell interest 21%) offshore Malaysiacommenced production. The development is expected to deliver peak production ofaround 30 thousand boe/d. During the quarter, in Shell's heartlands exploration programme, aShell-operated oil discovery at the Limbayong prospect (Shell interest 35%)offshore Malaysia was announced. Shell participated in the non-operatedLympstone gas discovery (Shell interest 50%) offshore Australia, and in Aprilin the Rosmari-1 discovery (Shell interest 85%) offshore Malaysia, adding newgas resources. In addition during the quarter, we had a successful appraisal ofthe Pegaga gas discovery (Shell interest 20%) offshore Malaysia. Shell had continued success with near-field exploration discoveries in a numberof countries. As part of its global exploration programme, Shell added new acreage positionsfollowing successful bidding results in Namibia, Norway, and Russia. Upstream divestment proceeds totalled some $0.3 billion for the first quarter2014 and included among others proceeds from the completed sale of Shell'sinterest in Mississippi Lime acreage in Kansas, United States. In April, Shell approved to move into FEED for an LNG facility in Canada. Thefacility is expected to have capacity of approximately 12 million tonnes perannum ("mtpa") with expansion potential to approximately 24 mtpa. In Upstream Americas resources plays (shale oil and gas), insights from ongoingexploration and appraisal drilling results and production information, andShell's ongoing restructuring of this portfolio, could potentially lead tofuture asset sales and/or impairments. Downstream In Australia, Shell announced a binding agreement to sell its Downstreambusinesses (excluding Aviation) to Vitol for a total transaction value ofapproximately $2.6 billion. The sale covers Shell's Geelong Refinery and870-site Retail business, along with its Bulk Fuels, Bitumen, Chemicals andpart of its Lubricants businesses. It also includes a brand licence arrangementand an exclusive distributor arrangement in Australia for Shell Lubricants. Thedeal is subject to regulatory approvals and is expected to close in 2014. In Italy, Shell reached an agreement with Kuwait Petroleum International forthe sale of its Retail, Supply & Distribution Logistics and Aviationbusinesses. Under this agreement, Shell's Retail network will be re-branded toQ8 in the country. The sale is subject to regulatory approvals and is expectedto close in 2014. Consistent with Shell's strategic intent to concentrate its Downstream globalfootprint and businesses where it can be most competitive, Shell announced theintent to sell its Downstream Refining and Marketing businesses in Denmark. Shell is also considering the sale of certain of its Marketing assets inNorway. Downstream divestment proceeds totalled some $0.2 billion for the first quarter2014 and included among others proceeds from the divestment of Shell's 16.3%interest in Ceska Rafinerska in the Czech Republic. FIRST QUARTER 2014 SUMMARY OF IDENTIFIED ITEMS Earnings for the first quarter 2014 reflected the following items, which inaggregate amounted to a net charge of $2,862 million (compared with a net gainof $431 million in the first quarter 2013), as summarised in the table below: * Upstream earnings included a net charge of $283 million, mainly reflecting charges related to asset impairments of $168 million. Identified items also included net charges related to the fair value accounting of commodity derivatives and certain gas contracts, the impact of a reduction in the discount rate used for provisions, and divestments. Earnings for the first quarter 2013 included a net gain of $173 million. * Downstream earnings included a net charge of $2,580 million, including impairments of $2,284 million related to refineries in Asia and Europe. The refining-related impairments, equivalent to 14% of Shell's refinery asset base, reflect the latest insight into margins based on feedstock supply and product demand outlook. This charge includes the write-off of the Bukom oil refinery, at Shell's integrated refinery and chemicals facility in Singapore, and excludes the Bukom chemicals plant. The company has initiatives underway to improve the profitability of the integrated facilities at Bukom. Earnings for the first quarter 2013 included a net charge of $160 million. * Corporate and Non-controlling interest earnings included a net gain of $1 million. Earnings for the first quarter 2013 included a net gain of $418 million. RESPONSIBILITY STATEMENT It is confirmed that to the best of our knowledge: (a) the CondensedConsolidated Interim Financial Statements have been prepared in accordance withIAS 34 Interim Financial Reporting as adopted by the European Union; (b) theinterim management report includes a fair review of the information required byDisclosure and Transparency Rule (DTR) 4.2.7R (indication of important eventsduring the first six months of the financial year, and their impact on theCondensed Consolidated Interim Financial Statements, and description ofprincipal risks and uncertainties for the remaining six months of the financialyear); and (c) the interim management report includes a fair review of theinformation required by DTR 4.2.8R (disclosure of related parties transactionsand changes thereto). The Directors of Royal Dutch Shell plc are as shown on pages 58-59 in theAnnual Report and Form 20-F for the year ended December 31, 2013 except thatJosef Ackermann stepped down as a Director on May 20, 2014, and Patricia A.Woertz was appointed a Director with effect from June 1, 2014. On behalf of the Board Ben van Beurden Simon Henry Chief Executive Officer Chief Financial Officer July 31, 2014 July 31, 2014 INDEPENDENT REVIEW REPORT TO ROYAL DUTCH SHELL PLC REPORT ON THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS Our conclusion We have reviewed the Condensed Consolidated Interim Financial Statements,defined below, in the half-yearly financial report of Royal Dutch Shell plc forthe six months ended June 30, 2014. Based on our review, nothing has come toour attention that causes us to believe that the Condensed Consolidated InterimFinancial Statements are not prepared, in all material respects, in accordancewith International Accounting Standard 34 as adopted by the European Union andthe Disclosure and Transparency Rules of the United Kingdom's Financial ConductAuthority. This conclusion is to be read in the context of what we say in theremainder of this report. What we have reviewed The Condensed Consolidated Interim Financial Statements, which are prepared byRoyal Dutch Shell plc, comprise: * the Consolidated Statement of Income and Consolidated Statement of Comprehensive Income for the six months ended June 30, 2014; * the Condensed Consolidated Balance Sheet as at June 30, 2014; * the Consolidated Statement of Changes in Equity and Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2014; and * the explanatory notes to the Condensed Consolidated Interim Financial Statements. The annual financial statements of Royal Dutch Shell plc are prepared inaccordance with applicable law and International Financial Reporting Standards(IFRSs) as adopted by the European Union. The Condensed Consolidated InterimFinancial Statements included in this half-yearly financial report have beenprepared in accordance with International Accounting Standard 34, 'InterimFinancial Reporting', as adopted by the European Union and the Disclosure andTransparency Rules of the United Kingdom's Financial Conduct Authority. What a review of the Condensed Consolidated Financial Statements involves We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, 'Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity' issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) and,consequently, does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly,we do not express an audit opinion. We have read the other informationcontained in the half-yearly financial report and considered whether itcontains any apparent misstatements or material inconsistencies with theinformation in the Condensed Consolidated Interim Financial Statements. RESPONSIBILITIES FOR THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTSAND THE REVIEW Our responsibilities and those of the directors The half-yearly financial report, including the Condensed Consolidated InterimFinancial Statements, is the responsibility of, and has been approved by, thedirectors. The directors are responsible for preparing the half-yearlyfinancial report in accordance with the Disclosure and Transparency Rules ofthe United Kingdom's Financial Conduct Authority. Our responsibility is toexpress to the company a conclusion on the Condensed Consolidated InterimFinancial Statements in the half-yearly financial report based on our review.This report, including the conclusion, has been prepared for and only for thecompany for the purpose of complying with the Disclosure and Transparency Rulesof the Financial Conduct Authority and for no other purpose. We do not, ingiving this conclusion, accept or assume responsibility for any other purposeor to any other person to whom this report is shown or into whose hands it maycome save where expressly agreed by our prior consent in writing. PricewaterhouseCoopers LLP Chartered Accountants London July 31, 2014 a) The maintenance and integrity of the Royal Dutch Shell plc website (www.shell.com ) are the responsibility of the directors; the work carried outby the auditors does not involve consideration of these matters and,accordingly, the auditors accept no responsibility for any changes that mayhave occurred to the Condensed Consolidated Interim Financial Statements sincethey were initially presented on the website. b) Legislation in the United Kingdom governing the preparation and disseminationof financial statements may differ from legislation in other jurisdictions. CAUTIONARY STATEMENT All amounts shown throughout this Report are unaudited. The companies in which Royal Dutch Shell plc directly and indirectly ownsinvestments are separate entities. In this document "Shell", "Shell group" and"Royal Dutch Shell" are sometimes used for convenience where references aremade to Royal Dutch Shell plc and its subsidiaries in general. Likewise, thewords "we", "us" and "our" are also used to refer to subsidiaries in general orto those who work for them. These expressions are also used where no usefulpurpose is served by identifying the particular company or companies.''Subsidiaries'', "Shell subsidiaries" and "Shell companies" as used in thisdocument refer to companies over which Royal Dutch Shell plc either directly orindirectly has control. Companies over which Shell has joint control aregenerally referred to as "joint ventures" and companies over which Shell hassignificant influence but neither control nor joint control are referred to as"associates". The term "Shell interest" is used for convenience to indicate thedirect and/or indirect ownership interest held by Shell in a venture,partnership or company, after exclusion of all third-party interest. This document contains forward-looking statements concerning the financialcondition, results of operations and businesses of Royal Dutch Shell. Allstatements other than statements of historical fact are, or may be deemed tobe, forward-looking statements. Forward-looking statements are statements offuture expectations that are based on management's current expectations andassumptions and involve known and unknown risks and uncertainties that couldcause actual results, performance or events to differ materially from thoseexpressed or implied in these statements. Forward-looking statements include,among other things, statements concerning the potential exposure of Royal DutchShell to market risks and statements expressing management's expectations,beliefs, estimates, forecasts, projections and assumptions. Theseforward-looking statements are identified by their use of terms and phrasessuch as ''anticipate'', ''believe'', ''could'', ''estimate'', ''expect'',''goals'', ''intend'', ''may'', ''objectives'', ''outlook'', ''plan'',''probably'', ''project'', ''risks'', "schedule", ''seek'', ''should'',''target'', ''will'' and similar terms and phrases. There are a number offactors that could affect the future operations of Royal Dutch Shell and couldcause those results to differ materially from those expressed in theforward-looking statements included in this document, including (withoutlimitation): (a) price fluctuations in crude oil and natural gas; (b) changesin demand for Shell's products; (c) currency fluctuations; (d) drilling andproduction results; (e) reserves estimates; (f) loss of market share andindustry competition; (g) environmental and physical risks; (h) risksassociated with the identification of suitable potential acquisition propertiesand targets, and successful negotiation and completion of such transactions;(i) the risk of doing business in developing countries and countries subject tointernational sanctions; (j) legislative, fiscal and regulatory developmentsincluding regulatory measures addressing climate change; (k) economic andfinancial market conditions in various countries and regions; (l) politicalrisks, including the risks of expropriation and renegotiation of the terms ofcontracts with governmental entities, delays or advancements in the approval ofprojects and delays in the reimbursement for shared costs; and (m) changes intrading conditions. All forward-looking statements contained in this documentare expressly qualified in their entirety by the cautionary statementscontained or referred to in this section. Readers should not place unduereliance on forward-looking statements. Additional risk factors that may affectfuture results are contained in Royal Dutch Shell's Form 20-F for the yearended December 31, 2013 (available at www.shell.com/investor and www.sec.gov).These risk factors also expressly qualify all forward-looking statementscontained in this document and should be considered by the reader. Eachforward-looking statement speaks only as of the date of this document, July 31,2014. Neither Royal Dutch Shell plc nor any of its subsidiaries undertake anyobligation to publicly update or revise any forward-looking statement as aresult of new information, future events or other information. In light ofthese risks, results could differ materially from those stated, implied orinferred from the forward-looking statements contained in this document. We may have used certain terms, such as resources, in this document that theUnited States Securities and Exchange Commission (SEC) strictly prohibits usfrom including in our filings with the SEC. U.S. investors are urged toconsider closely the disclosure in our Form 20-F, File No 1-32575, available onthe SEC website www.sec.gov. You can also obtain this form from the SEC bycalling 1-800-SEC-0330. July 31, 2014 The information in this Report reflects the unaudited consolidated financialposition and results of Royal Dutch Shell plc. The information in this Reportalso represents Royal Dutch Shell plc's half-yearly financial report for thepurposes of the Disclosure and Transparency Rules of the UK Financial ConductAuthority. As such: (1) the interim management report can be found on pages 3to 9 and 18 to 21; (2) the condensed set of financial statements on pages 10 to17; and (3) the directors' responsibility statement on page 22 and theauditors' independent review on page 23. Company No. 4366849, RegisteredOffice: Shell Centre, London, SE1 7NA, England, UK. Contacts: - Investor Relations: International + 31 (0) 70 377 4540; North America +1 832337 2034 - Media: International +44 (0) 207 934 5550; USA +1 713 241 4544