28 Jul 2016 09:01
ROYAL DUTCH SHELL PLC - 2nd Quarter and Half Year 2016 unaudited resultsROYAL DUTCH SHELL PLC - 2nd Quarter and Half Year 2016 unaudited results
PR Newswire
London, July 28
ROYAL DUTCH SHELL PLC 2ND QUARTER AND HALF YEAR 2016 UNAUDITED RESULTS SUMMARY OF UNAUDITED RESULTS Quarters $ million Half year Q2 2016 Q1 2016 Q2 %1 2016 2015 % 2015 1,175 484 3,986 -71 Income attributable to 1,659 8,416 -80 shareholders (936) 330 (625) Current cost of supplies (CCS) (606) (294) adjustment for Downstream2 239 814 3,361 -93 CCS earnings attributable to 1,053 8,122 -87 shareholders3 (806) (739) (399) Identified items2,4 (1,545) 624 1,045 1,553 3,760 -72 CCS earnings attributable to 2,598 7,498 -65 shareholders excluding identified items Of which: 868 994 1,403 Integrated Gas 1,862 2,894 (1,325) (1,437) (469) Upstream (2,762) (664) 1,816 2,010 2,961 Downstream 3,826 5,607 (314) (14) (135) Corporate and Non-controlling (328) (339) interest 2,292 661 6,050 -62 Cash flow from operating 2,953 13,156 -78 activities 0.03 0.11 0.53 -94 Basic CCS earnings per share ($) 0.14 1.29 -89 0.06 0.22 1.06 Basic CCS earnings per ADS ($) 0.28 2.58 0.13 0.22 0.60 -78 Basic CCS earnings per share excl. 0.34 1.19 -71 identified items4 ($) 0.26 0.44 1.20 Basic CCS earnings per ADS excl. 0.68 2.38 identified items4 ($) 0.47 0.47 0.47 - Dividend per share ($) 0.94 0.94 - 0.94 0.94 0.94 - Dividend per ADS ($) 1.88 1.88 - 1. Q2 on Q2 change 2. Attributable to shareholders 3. CCS earnings are defined in Note 3 and CCS earnings attributable to shareholders in Definition A. 4. See page 5 and Definition C. Comparative information has been restated. * Following the acquisition on February 15, 2016, BG Group plc ("BG") has been consolidated within Royal Dutch Shell's results. * Royal Dutch Shell's second quarter 2016 CCS earnings attributable to shareholders were $0.2 billion compared with $3.4 billion for the same quarter a year ago. * Second quarter 2016 CCS earnings attributable to shareholders excluding identified items were $1.0 billion compared with $3.8 billion for the second quarter 2015, a decrease of 72%. * Compared with the second quarter 2015, CCS earnings attributable to shareholders excluding identified items were impacted by the decline in oil, gas and LNG prices, the depreciation step-up resulting from the BG acquisition, weaker refining industry conditions, and increased taxation. Earnings benefited from increased production volumes from BG assets. * Second quarter 2016 basic CCS earnings per share excluding identified items decreased by 78% versus the second quarter 2015. * Cash flow from operating activities for the second quarter 2016 was $2.3 billion, which included negative working capital movements of $2.5 billion. * Total dividends distributed to shareholders in the quarter were $3.7 billion, of which $1.2 billion were settled by issuing 50.5 million A shares under the Scrip Dividend Programme. * Gearing at the end of the second quarter 2016 was 28.1% versus 12.7% at the end of the second quarter 2015. This increase mainly reflects the impact of the acquisition of BG. * A second quarter 2016 dividend has been announced of $0.47 per ordinary share and $0.94 per American Depositary Share ("ADS"). Royal Dutch Shell Chief Executive Officer Ben van Beurden commented: "Downstream and Integrated Gas businesses contributed strongly to the results,alongside Shell's self-help programme. However, lower oil prices continue to bea significant challenge across the business, particularly in the Upstream. We are managing the company through the down-cycle by reducing costs, bydelivering on lower and more predictable investment levels, executing our assetsales plans and starting up profitable new projects. At the same time,integration of Shell and BG is making strong progress, and our operatingperformance continues to further improve. We are making significant and lasting changes to Shell's working practices andcost structure. Shell is firmly on track to deliver a $40 billion underlyingoperating cost run rate at the end of 2016. Looking through the cycle, our investment plans and portfolio actions arefocused firmly on reshaping Shell into a world-class investment case throughstronger, sustained and growing free cash flow per share." SUMMARY OF CCS EARNINGS EXCLUDING IDENTIFIED ITEMS Quarters $ million Half year Q2 2016 Q1 2016 Q2 %1 2016 2015 % 2015 239 814 3,361 -93 CCS earnings attributable to 1,053 8,122 -87 shareholders Of which: 982 905 1,335 -26 Integrated Gas 1,887 2,474 -24 (1,974) (1,350) (561) -252 Upstream (3,324) 839 -496 1,717 1,700 2,746 -37 Downstream 3,417 5,260 -35 1,490 1,294 2,243 -34 Oil Products 2,784 4,357 -36 227 406 503 -55 Chemicals 633 903 -30 (486) (441) (159) -206 Corporate and Non-controlling (927) (451) -106 interest (806) (739) (399) Identified items2 (1,545) 624 Of which: 114 (89) (68) Integrated Gas 25 (420) (649) 87 (92) Upstream (562) 1,503 (99) (310) (215) Downstream (409) (347) (78) (339) (155) Oil Products (417) (278) (21) 29 (60) Chemicals 8 (69) (172) (427) (24) Corporate and Non-controlling (599) (112) interest 1,045 1,553 3,760 -72 CCS earnings attributable to 2,598 7,498 -65 shareholders excluding identified items Of which: 868 994 1,403 -38 Integrated Gas 1,862 2,894 -36 (1,325) (1,437) (469) -183 Upstream (2,762) (664) -316 1,816 2,010 2,961 -39 Downstream 3,826 5,607 -32 1,568 1,633 2,398 -35 Oil Products 3,201 4,635 -31 248 377 563 -56 Chemicals 625 972 -36 (314) (14) (135) -133 Corporate and Non-controlling (328) (339) +3 interest 1. Q2 on Q2 change 2. See page 5. Comparative information has been restated. SECOND QUARTER 2016 PORTFOLIO DEVELOPMENTS Integrated Gas During the quarter, Mahanagar Gas Limited (MGL), a joint venture between BGAsia Pacific Holdings (a Shell subsidiary) and GAIL (India) Limited, completedan initial public offering (IPO) for 25% of the equity for a total of around$154 million (Shell share $77 million). The IPO was an obligation under theoriginal approval/ licensing permits granted by the Government of India'sForeign Investment Promotion Board in 1994. Immediately prior to the IPO, theGovernment of Maharashtra increased its interest to 10% as a result of theconversion of the Compulsory Convertible Debentures resulting in a dilution foreach of Shell and GAIL to 45%. After completion of both transactions, Shell andGAIL each hold a 32.5% interest in MGL (previously 49.75% each), with a 10%interest held by the Government of Maharashtra (previously 0.5%) and 25% heldby public shareholders (previously 0%). During the quarter, the M?ui joint venture (Shell interest 83.75%) completedthe sale of the M?ui onshore natural gas pipeline in New Zealand, toinfrastructure funds managed by First State Investments for a consideration of$0.2 billion. In July, the LNG Canada joint venture announced that the joint ventureparticipants - Shell, PetroChina, Mitsubishi Corporation and Kogas - decided todelay final investment decision on the LNG Canada project (Shell interest 50%)that was planned for the end of 2016. Also in July, Shell decided to delay final investment decision on the LakeCharles LNG project (Shell capacity interest 100%) that was planned for 2016,in the United States. The Lake Charles LNG project is proposed to convert theexisting Lake Charles LNG regasification facility owned by Energy Transfer to aliquefaction facility. Upstream Shell had continued success in its exploration programme with 2 discoveries inOman and the United States. This included a notable oil discovery in the UnitedStates with the Shell-operated Fort Sumter well (Shell interest 100%) in theGulf of Mexico. The initial estimated recoverable resources for the Fort Sumterwell are more than 125 million barrels of oil equivalent. In July, the non-operated ML South development (Shell interest 35%) in Bruneireached first production. The expected peak production from this development isaround 35 thousand barrels of oil equivalent per day ("boe/d"). Also in July, the non-operated Lula Central production system was started upwith the interconnection of the first production well to FPSO Cidade deSaquarema (Shell interest 25%), the eighth FPSO in the Santos Basin pre-saltoffshore Brazil. FPSO Cidade de Saquarema has a processing capacity of 150thousand barrels of oil and compressing capacity of up to 212 million standardcubic feet of gas per day. Downstream During the quarter, Shell announced a final investment decision to build amajor petrochemical complex, comprising an ethylene cracker with polyethylenederivatives unit in Pennsylvania, USA. Main construction will startapproximately 18 months from the decision date in order to manage capitalspending, with commercial production expected to begin early in the nextdecade. Shell announced that it has completed the sale of Dansk Fuels in Denmark for aconsideration of $0.3 billion. Dansk Fuels comprises retail, commercial fuels,commercial fleet and aviation businesses, and products trading and supplyactivities associated with those businesses. In the United States, Shell Midstream Partners, L.P. acquired additionalinterests in Zydeco Pipeline Company, Colonial Pipeline Company, and BengalPipeline Company for $700 million from Shell Pipeline Company. The acquisitionincreased Shell Midstream Partners' ownership interest in Zydeco from 62.5% to92.5%, in Colonial from 3% to 6%, and in Bengal from 49% to 50%. Shell also completed the sale of an additional 3.59% interest in ShellMidstream Partners, L.P. to public investors via the issuance of an additional12,075,000 LP units for net proceeds of $398 million. KEY FEATURES OF THE SECOND QUARTER 2016 * Second quarter 2016 CCS earnings attributable to shareholders were $239 million, 93% lower than for the same quarter a year ago. * Second quarter 2016 CCS earnings attributable to shareholders excluding identified items were $1,045 million compared with $3,760 million for the second quarter 2015, a decrease of 72%. * Basic CCS earnings per share for the second quarter 2016 decreased by 94% versus the same quarter a year ago. * Basic CCS earnings per share excluding identified items for the second quarter 2016 decreased by 78% versus the same quarter a year ago. * Cash flow from operating activities for the second quarter 2016 was $2.3 billion, which included negative working capital movements of $2.5 billion, compared with $6.1 billion for the same quarter last year. * Capital investment (see Definition C) for the second quarter 2016 was $6.3 billion. Half year 2016 capital investment was $65.3 billion, which included $52.9 billion related to the acquisition of BG. Organic capital investment for the full year 2016 is expected to be $29 billion, compared with combined capital investment of $47 billion in 2014. * Divestments (see Definition D) for the second quarter 2016 were $1.0 billion. * Operating expenses (see Definition G) for the second quarter 2016 increased by $1.7 billion versus the same quarter a year ago, and included $1.4 billion related to redundancy and restructuring charges and $0.4 billion related to a provision for onerous contracts. Compared with the second quarter 2015, operating expenses excluding identified items decreased by $0.9 billion before the increase of $1.0 billion due to the consolidation of BG. Operating expenses are trending towards an underlying run rate of $40 billion by the end of 2016. * Total dividends distributed to shareholders in the second quarter 2016 were $3.7 billion, of which $1.2 billion were settled by issuing 50.5 million A shares under the Scrip Dividend Programme. * Return on average capital employed on a reported income basis (see Definition E) was a negative -1.4% at the end of the second quarter 2016 compared with 6.3% at the end of the second quarter 2015. Return on average capital employed on a CCS basis excluding identified items was 2.5% at the end of the second quarter 2016 compared with 7.6% at the end of the second quarter 2015. * Gearing (see Definition F) was 28.1% at the end of the second quarter 2016 versus 12.7% at the end of the second quarter 2015. This increase mainly reflects the impact of the BG acquisition including 1.6% related to the recognition of associated finance leases in the first quarter of 2016. * Global liquids realisations were 29% lower and global natural gas realisations were 28% lower than for the same quarter a year ago. * Oil and gas production for the second quarter 2016 was 3,508 thousand boe/ d, an increase of 28% compared with the second quarter 2015. The impact of BG on the second quarter 2016 production was an increase of 768 thousand boe/d. Excluding the impact of divestments, curtailment and underground storage utilisation at NAM in the Netherlands, a Malaysia PSC expiry, PSC price effects, the Woodside accounting change (see page 12), and security impacts in Nigeria, second quarter 2016 production increased by 30% compared with the same period last year, or 2% excluding BG. * LNG liquefaction volumes of 7.57 million tonnes for the second quarter 2016, of which BG contributed 2.42 million tonnes, were 39% higher than for the same quarter a year ago. * LNG sales volumes of 14.25 million tonnes for the second quarter 2016 were 52% higher than for the same quarter a year ago, mainly reflecting Shell's enlarged portfolio after the acquisition of BG. * Oil products sales volumes for the second quarter 2016 were 1% higher than for the second quarter 2015. * Chemicals sales volumes for the second quarter 2016 decreased by 2% compared with the same quarter a year ago. * Supplementary financial and operational disclosure for this quarter is available at www.shell.com/investor. SUMMARY OF IDENTIFIED ITEMS With effect from 2016, identified items include the impact of exchange ratemovements on certain deferred tax balances, as set out in Definition B. Thecomparative information in this Report has been restated following this change. CCS earnings attributable to shareholders for the second quarter 2016 reflectedthe following items, which in aggregate amounted to a net charge of $806million (compared with a net charge of $399 million for the second quarter2015), as summarised below: * Integrated Gas earnings included a net gain of $114 million, primarily reflecting the impact of some $580 million following a change in accounting classification for Woodside (see page 12), from an associate to an investment in securities. As a consequence, SEC proved reserves of 103 million boe at December 31, 2015, have been de-booked and production decreases by 25 thousand boe/d. Earnings were also impacted by divestment gains of some $200 million. This was partly offset by redundancy and restructuring charges of some $250 million, a charge of some $220 million related to the impact of the weakening Australian dollar on a deferred tax position, and a net charge on fair value accounting of certain commodity derivatives and gas contracts of some $190 million. Integrated Gas earnings for the second quarter 2015 included a net charge of $68 million. * Upstream earnings included a net charge of $649 million, primarily reflecting redundancy and restructuring charges of some $570 million, other items including a provision for onerous contracts of some $240 million, impairments of some $140 million and a net charge on fair value accounting of certain commodity derivatives and gas contracts of some $80 million. These charges were partly offset by a gain of some $360 million related to the impact of the strengthening Brazilian real on a deferred tax position. Upstream earnings for the second quarter 2015 included a net charge of $92 million. * Downstream earnings included a net charge of $99 million, primarily reflecting redundancy and restructuring charges of some $250 million and impairment charges of some $50 million, partly offset by other tax-related credits of some $150 million. Downstream earnings for the second quarter 2015 included a net charge of $215 million. * Corporate results and Non-controlling interest included a net charge of $172 million, mainly reflecting the impact of the strengthening Brazilian real on deferred tax positions related to financing of the Upstream business. Earnings for the second quarter 2015 included a net charge of $24 million. Identified items for the first quarter 2016 and 2015 can be found on page 27. EARNINGS BY SEGMENT INTEGRATED GAS Quarters $ million Half year Q2 Q1 Q2 %1 2016 2015 %2016 2016 2015 868 994 1,403 -38 Integrated Gas earnings excluding 1,862 2,894 -36 identified items 982 905 1,335 -26 Integrated Gas earnings 1,887 2,474 -24 2,730 2,657 1,444 +89 Integrated Gas cash flow from operating 5,387 3,978 +35 activities 1,153 1,051 1,313 -12 Integrated Gas capital investment 2,204 2,614 -16 excluding BG acquisition impact - 21,773 - Integrated Gas BG-related capital 21,773 - investment 219 224 199 +10 Liquids production available for sale 222 200 +11 (thousand b/d) 3,831 3,532 2,350 +63 Natural gas production available for 3,682 2,398 +54 sale (million scf/d) 880 833 604 +46 Total production available for sale 856 613 +40 (thousand boe/d) 7.57 7.04 5.46 +39 LNG liquefaction volumes (million 14.61 11.63 +26 tonnes) 14.25 12.29 9.40 +52 LNG sales volumes (million tonnes) 26.54 19.21 +38 1. Q2 on Q2 change Second quarter Integrated Gas earnings excluding identified items were $868million compared with $1,403 million a year ago. Identified items were a netgain of $114 million, compared with a net charge of $68 million for the secondquarter 2015 (see page 5). Compared with the second quarter 2015, earnings excluding identified items wereimpacted by the decline in oil and LNG prices, and increased depreciationincluding a step-up resulting from the BG acquisition. The consolidation of BGresulted in higher operating expenses. This was partly offset by higher LNG andliquids production volumes, related to the contribution of BG assets. Second quarter 2016 production was 880 thousand boe/d compared with 604thousand boe/d a year ago. Liquids production increased by 10% and natural gasproduction increased by 63% compared with the second quarter 2015. LNG liquefaction volumes of 7.57 million tonnes increased by 39% compared withthe same quarter a year ago, mainly reflecting the impact of the acquisition ofBG, including an increase associated with Queensland Curtis LNG in Australiaand Atlantic LNG in Trinidad and Tobago. LNG sales volumes of 14.25 million tonnes increased by 52% compared with thesame quarter a year ago, mainly reflecting Shell's enlarged portfolio after theacquisition of BG. Half year Integrated Gas earnings excluding identified items were $1,862million compared with $2,894 million for the first half year 2015. Identifieditems were a net gain of $25 million, compared with a net charge of $420million for the first half year 2015 (see page 5). Compared with the first half year 2015, Integrated Gas earnings excludingidentified items were impacted by the decline in oil and LNG prices and theMalaysia LNG Dua JVA expiry. The consolidation of BG resulted in higheroperating expenses and a step-up in depreciation. This was partly offset byincreased production volumes mainly as a result of the contribution of BGassets and higher uptime at Pearl GTL in Qatar, and lower well write-offs. Half year 2016 production was 856 thousand boe/d compared with 613 thousand boe/d for the same period a year ago. Liquids production increased by 11% andnatural gas production increased by 54% compared with the first half year 2015. LNG liquefaction volumes of 14.61 million tonnes were 26% higher than for thefirst half year 2015, mainly reflecting the impact of the acquisition of BG,including an increase associated with Queensland Curtis LNG in Australia,partly offset by lower feedgas availability and the expiry of the Malaysia LNGDua JVA. LNG sales volumes of 26.54 million tonnes increased by 38% compared with thefirst half year 2015, mainly reflecting Shell's enlarged portfolio after theacquisition of BG. UPSTREAM Quarters $ million Half year Q2 2016 Q1 2016 Q2 %1 2016 2015 % 2015 (1,325) (1,437) (469) -183 Upstream earnings excluding (2,762) (664) -316 identified items (1,974) (1,350) (561) -252 Upstream earnings (3,324) 839 -496 (297) 448 648 -146 Upstream cash flow from operating 151 2,243 -93 activities 3,700 3,907 4,603 -20 Upstream capital investment 7,607 9,245 -18 excluding BG acquisition impact - 31,131 - Upstream BG-related capital 31,131 - investment 1,526 1,557 1,233 +24 Liquids production available for 1,541 1,287 +20 sale (thousand b/d) 6,395 7,373 5,184 +23 Natural gas production available 6,884 6,075 +13 for sale (million scf/d) 2,628 2,828 2,127 +24 Total production available for 2,728 2,335 +17 sale (thousand boe/d) 1. Q2 on Q2 change Second quarter Upstream earnings excluding identified items were a loss of$1,325 million compared with a loss of $469 million a year ago. Identifieditems were a net charge of $649 million compared with a net charge of $92million for the second quarter 2015 (see page 5). Compared with the second quarter 2015, earnings excluding identified items wereimpacted by the decline in oil and gas prices and depreciation step-upresulting from the BG acquisition. This was partly offset by increasedproduction volumes, mainly from BG assets and improved operational performance.Operating expenses and exploration expenses were lower, as steps taken by thecompany to reduce these costs more than offset the increases due to theconsolidation of BG. Second quarter 2016 production was 2,628 thousand boe/d compared with 2,127thousand boe/d a year ago. Liquids production increased by 24% and natural gasproduction increased by 23% compared with the second quarter 2015, driven bythe impact of BG. New field start-ups and the continuing ramp-up of existing fields, inparticular the Corrib gas field in Ireland, and Erha North ph2 in Nigeria,contributed some 53 thousand boe/d to production compared with the secondquarter 2015. Half year Upstream earnings excluding identified items were a loss of $2,762million compared with a loss of $664 million for the same period a year ago.Identified items were a net charge of $562 million compared with a net gain of$1,503 million for the first half year 2015 (see page 5). Compared with the first half year 2015, earnings excluding identified itemswere impacted by the decline in oil and gas prices, and increased depreciationmainly related to a step-up resulting from the BG acquisition. This was partlyoffset by increased production volumes mainly from BG assets. Explorationexpense and operating expenses were lower, as steps taken by the company toreduce these costs more than offset the increases due to the consolidation ofBG. Half year 2016 production was 2,728 thousand boe/d compared with 2,335 thousandboe/d for the same period last year. Liquids production increased by 20% andnatural gas production increased by 13% compared with the first half year 2015. New field start-ups and the continuing ramp-up of existing fields, inparticular Erha North ph2 in Nigeria, the Corrib gas field in Ireland, andNorth American shales, contributed some 58 thousand boe/d to productioncompared with the first half year 2015. DOWNSTREAM Quarters $ million Half year Q2 Q1 2016 Q2 %1 2016 2015 % 2016 2015 1,816 2,010 2,961 -39 Downstream earnings excluding 3,826 5,607 -32 identified items2 Of which: 1,568 1,633 2,398 -35 Oil Products 3,201 4,635 -31 248 377 563 -56 Chemicals 625 972 -36 1,717 1,700 2,746 -37 Downstream earnings2 3,417 5,260 -35 571 (1,434) 3,816 -85 Downstream cash flow from operating (863) 5,370 -116 activities 1,389 1,092 1,085 +28 Downstream capital investment 2,481 1,934 +28 2,648 2,645 2,944 -10 Refinery processing intake (thousand 2,646 2,908 -9 b/d) 6,595 6,225 6,531 +1 Oil products sales volumes (thousand 6,410 6,423 - b/d) 4,248 4,050 4,326 -2 Chemicals sales volumes (thousand 8,298 8,518 -3 tonnes) 1. Q2 on Q2 change 2. Earnings are presented on a CCS basis Second quarter Downstream earnings excluding identified items were $1,816million compared with $2,961 million for the second quarter 2015. Identifieditems were a net charge of $99 million, compared with a net charge of $215million for the second quarter 2015 (see page 5). Compared with the second quarter 2015, Downstream earnings excluding identifieditems were mainly impacted by weaker refining industry conditions, increasedtaxation, and lower Chemicals margins. Downstream earnings benefited from lowercosts, including the impact of favourable exchange rate effects anddivestments. Oil Products * Refining & Trading earnings excluding identified items were $459 million in the second quarter 2016 compared with $1,313 million for the same period last year. Second quarter 2016 earnings were impacted by lower realised refining margins, reflecting the weaker global refining industry conditions due to oversupply and high inventory levels, and weaker operating performance, and increased taxation. Refinery intake volumes were 10% lower compared with the same quarter lastyear. Excluding portfolio impacts, refinery intake volumes were 9% lowercompared with the same period a year ago. Refinery availability decreased to89% compared with 95% in the second quarter 2015, mainly as a result ofincreased maintenance. * Marketing earnings excluding identified items were $1,109 million in the second quarter 2016 compared with $1,085 million for the same period a year ago. Second quarter 2016 earnings benefited from lower costs and stronger underlying unit margins, offsetting the impact of adverse exchange rate effects and divestments. Oil products sales volumes increased by 1% compared with the same period a yearago, reflecting higher trading volumes partly offset by lower marketingvolumes. Chemicals * Chemicals earnings excluding identified items were $248 million in the second quarter 2016 compared with $563 million for the same period last year. Second quarter 2016 earnings were mainly impacted by weaker base chemicals industry conditions in the United States and the impact of unit shutdowns at the Bukom chemical site in Singapore, partly offset by recovery at the Moerdijk chemical site in the Netherlands. Chemicals sales volumes decreased by 2% compared with the same quarter lastyear, mainly as a result of weaker intermediates demand and reducedavailability driven by unit shutdowns at Bukom, partly offset by recovery atMoerdijk. Chemicals manufacturing plant availability decreased to 85% from 86%in the second quarter 2015, mainly reflecting unit shutdowns at Bukom, partlyoffset by recovery at Moerdijk. Half year Downstream earnings excluding identified items were $3,826 millioncompared with $5,607 million for the same period a year ago. Identified itemswere a net charge of $409 million, compared with a net charge of $347 millionfor the first half year 2015 (see page 5). Compared with the first half year 2015, Downstream earnings excludingidentified items were mainly impacted by weaker refining industry conditions,increased taxation, and lower Chemicals margins. Downstream earnings benefitedfrom lower costs, including the impact of favourable exchange rate effects anddivestments. Oil Products * Refining & Trading earnings excluding identified items were $1,121 million in the first half year 2016 compared with $2,575 million for the same period last year. Half year 2016 earnings were impacted by lower realised refining margins, reflecting the weaker global refining industry conditions due to oversupply and high inventory levels, and weaker operating performance. Refinery intake volumes were 9% lower compared with the first half year 2015.Excluding portfolio impacts, refinery intake volumes were 7% lower comparedwith the same period a year ago. Refinery availability decreased to 89%compared with 95% for the first half year 2015, mainly as a result of increasedmaintenance. * Marketing earnings excluding identified items were $2,080 million in the first half year 2016 compared with $2,060 million for the same period a year ago. Half year 2016 earnings benefited from stronger underlying unit margins and lower costs, offsetting the impact of adverse exchange rate effects and divestments. Earnings were impacted by increased taxation. Oil products sales volumes were in line with the first half year 2015. Chemicals * Chemicals earnings excluding identified items were $625 million in the first half year 2016 compared with $972 million for the same period last year. Half year 2016 earnings were primarily impacted by weaker base chemicals industry conditions in the US and the impact of unit shutdowns at the Bukom chemical site in Singapore, partly offset by recovery at the Moerdijk chemical site in the Netherlands. Half year Chemicals sales volumes decreased by 3% compared with the same periodlast year, mainly as a result of weaker intermediates demand and reducedavailability driven by unit shutdowns at Bukom, partly offset by recovery atMoerdijk. Chemicals manufacturing plant availability increased to 86% from 85%in the first half year 2015, mainly reflecting recovery at Moerdijk, partlyoffset by unit shutdowns at Bukom. CORPORATE AND NON-CONTROLLING INTEREST Quarters $ million Half year Q2 Q1 Q2 2016 20152016 2016 2015 (314) (14) (135) Corporate and Non-controlling interest earnings (328) (339) excl. identified items Of which: (234) 69 (41) Corporate (165) (124) (80) (83) (94) Non-controlling interest (163) (215) (486) (441) (159) Corporate and Non-controlling interest earnings (927) (451) Second quarter Corporate results and Non-controlling interest excludingidentified items were a loss of $314 million, compared with a loss of $135million for the same period last year. Identified items for the second quarter2016 were a net charge of $172 million, and earnings for the second quarter2015 included a net charge of $24 million (see page 5). Compared with the second quarter 2015, Corporate results excluding identifieditems mainly reflected higher net interest expense and adverse exchange rateeffects, partly offset by higher tax credits. Half year Corporate results and Non-controlling interest excluding identifieditems were a loss of $328 million, compared with a loss of $339 million for thesame period last year. Identified items for the first half year 2016 were a netcharge of $599 million, and earnings for the first half year 2015 included anet charge of $112 million (see page 5). Compared with the first half year 2015, Corporate results excluding identifieditems mainly reflected favourable exchange rate effects, offset by higher netinterest expense and costs, and lower tax credits. OUTLOOK FOR THE THIRD QUARTER 2016 Compared with the third quarter 2015, Integrated Gas earnings are expected tobe negatively impacted by a reduction of some 15 thousand boe/d associated withthe impact of maintenance. Compared with the third quarter 2015, Upstream earnings are expected to benegatively impacted by a reduction of some 35 thousand boe/d associated withsabotage incidents and repairs in Nigeria. Earnings could be further impactedif the security conditions continue to deteriorate. Refinery availability is expected to marginally increase in the third quarter2016 as a result of lower planned maintenance compared with the same period ayear ago. Chemicals manufacturing plant availability is expected to increase inthe third quarter 2016 driven by the planned restart of the Bukom chemical sitein Singapore compared with the third quarter 2015, which was heavily impactedby unit shutdowns at the Moerdijk chemical site in the Netherlands. As a result of divestments in Denmark, Norway and France, Oil products salesvolumes are expected to decrease by some 200 thousand barrels per day comparedwith the third quarter 2015. Compared with the third quarter 2015, the BG purchase price allocation isexpected to increase depreciation by up to $0.3 billion. Following the completion of the BG acquisition, the sensitivities to earningshave been updated: * Integrated Gas - around $2 billion per annum for every $10 per barrel movement in Brent * Upstream - around $3 billion per annum for every $10 per barrel movement in Brent FORTHCOMING EVENTS Third quarter 2016 results and third quarter 2016 dividend are scheduled to beannounced on November 1, 2016. Shell will host a North America Investor Day onNovember 8, 2016 in New York City. UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF INCOME Quarters $ million Half year Q2 Q1 2016 Q2 2016 2015 2016 2015 58,415 48,554 72,402 Revenue1 106,969 138,108 946 789 1,136 Share of profit of joint ventures and 1,735 2,541 associates 910 389 412 Interest and other income 1,299 2,147 60,271 49,732 73,950 Total revenue and other income 110,003 142,796 40,362 33,286 52,441 Purchases 73,648 99,866 8,076 6,765 6,506 Production and manufacturing expenses 14,841 13,161 3,227 3,106 3,076 Selling, distribution and administrative 6,333 5,970 expenses 243 243 252 Research and development 486 505 535 457 964 Exploration 992 1,764 6,097 6,147 4,673 Depreciation, depletion and amortisation 12,244 9,277 770 370 466 Interest expense 1,140 842 59,310 50,374 68,378 Total expenditure 109,684 131,385 961 (642) 5,572 Income/(loss) before taxation 319 11,411 (319) (1,097) 1,458 Taxation charge/(credit) (1,416) 2,760 1,280 455 4,114 Income/(loss) for the period1 1,735 8,651 105 (29) 128 Income/(loss) attributable to 76 235 non-controlling interest 1,175 484 3,986 Income/(loss) attributable to Royal 1,659 8,416 Dutch Shell plc shareholders 0.15 0.07 0.63 Basic earnings per share2 0.22 1.34 0.15 0.07 0.62 Diluted earnings per share2 0.22 1.32 1. See Note 3 "Segment information" 2. See Note 4 "Earnings per share" CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Quarters $ million Half year Q2 2016 Q1 2016 Q2 2016 2015 2015 1,280 455 4,114 Income/(loss) for the period 1,735 8,651 Other comprehensive income net of tax: Items that may be reclassified to income in later periods: (434) 2,319 1,668 * Currency translation differences 1,885 (2,531) (128) (12) (129) * Unrealised gains/(losses) on (140) (264) securities (538) 324 133 * Cash flow hedging gains/(losses) (214) 124 (863) 136 - * Net investment hedging gains/ (727) - (losses)1 (77) 8 (25) * Share of other comprehensive income (69) (18) /(loss) of joint ventures and associates (2,040) 2,775 1,647 Total 735 (2,689) Items that are not reclassified to income in later periods: (2,795) (1,634) 5,496 * Retirement benefits remeasurements (4,429) 4,180 (4,835) 1,141 7,143 Other comprehensive income/(loss) for (3,694) 1,491 the period (3,555) 1,596 11,257 Comprehensive income/(loss) for the (1,959) 10,142 period 96 4 161 Comprehensive income/(loss) 100 224 attributable to non-controlling interest (3,651) 1,592 11,096 Comprehensive income/(loss) (2,059) 9,918 attributable to Royal Dutch Shell plc shareholders 1. See Note 1 "Basis of preparation" CONDENSED CONSOLIDATED BALANCE SHEET $ million Jun 30, Mar 31, 20161 Dec 31, 2015 20161 Assets Non-current assets Intangible assets 21,093 21,327 6,283 Property, plant and equipment 242,907 245,133 182,838 Joint ventures and associates2 33,850 35,654 30,150 Investments in securities2 5,709 3,474 3,416 Deferred tax 15,812 15,311 11,033 Retirement benefits 1,645 3,108 4,362 Trade and other receivables3 11,030 11,047 8,717 332,046 335,054 246,799 Current assets Inventories 20,626 17,396 15,822 Trade and other receivables3,4 49,547 47,872 45,784 Cash and cash equivalents 15,222 11,019 31,752 85,395 76,287 93,358 Total assets 417,441 411,341 340,157 Liabilities Non-current liabilities Debt5 79,466 73,005 52,849 Trade and other payables3 4,393 3,917 4,528 Deferred tax 15,904 16,677 8,976 Retirement benefits 15,882 13,516 12,587 Decommissioning and other provisions 31,825 32,710 26,148 147,470 139,825 105,088 Current liabilities Debt 10,863 7,868 5,530 Trade and other payables3,4 52,669 51,069 52,770 Taxes payable 8,291 10,387 8,233 Retirement benefits 392 401 350 Decommissioning and other provisions 5,250 3,777 4,065 77,465 73,502 70,948 Total liabilities 224,935 213,327 176,036 Equity attributable to Royal Dutch Shell 190,670 196,521 162,876plc shareholders Non-controlling interest 1,836 1,493 1,245 Total equity 192,506 198,014 164,121 Total liabilities and equity 417,441 411,341 340,157 1. See Note 2 "Acquisition of BG Group plc" 2. During the second quarter 2016, management concluded that a change in Shell's level of involvement over Woodside's financial and operating policy decisions resulted in no longer having significant influence. Its classification was therefore changed from an associate (carrying amount: $2,144 million) to an investment in securities (carrying amount at fair value: $2,442 million). The consequential revaluation and related release of cumulative currency translation differences were reported in interest and other income in the Consolidated Statement of Income. 3. See Note 7 "Derivative contracts" 4. The amounts at March 31, 2016 have been reduced by $4,963 million in order to appropriately reflect certain contracts on a net basis which were previously presented gross. 5. During the second quarter 2016, debt of $9,246 million was issued under the US shelf registration and EMTN programme. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Equity attributable to Royal Dutch Shell plc shareholders $ million Share Shares Other Retained Total Non- Total capital1 held in reserves2 earnings controlling equity trust interest At January 1, 546 (584) (17,186) 180,100 162,876 1,245 164,1212016 Comprehensive - - (3,718) 1,659 (2,059) 100 (1,959)income/(loss)for the period Dividends paid - - - (7,411) (7,411) (69) (7,480) Scrip dividends 9 - (9) 2,717 2,717 - 2,717 Shares issued 120 - 33,930 - 34,050 - 34,050for theacquisition ofBG Group plc3 Repurchases of - - - - - - -shares Share-based - (168) 266 133 231 - 231compensation4 Capital - - - 266 266 560 826contributionsfrom, and otherchangesin,non-controllinginterest At June 30, 675 (752) 13,283 177,464 190,670 1,836 192,5062016 At January 1, 540 (1,190) (14,365) 186,981 171,966 820 172,7862015 Comprehensive - - 1,502 8,416 9,918 224 10,142income/(loss)for the period Dividends paid - - - (5,957) (5,957) (45) (6,002) Scrip dividends 2 - (2) 731 731 - 731 Repurchases of (1) - 1 1 1 - 1shares Share-based - 634 - 39 673 - 673compensation Capital - - - (98) (98) 222 124contributionsfrom, and otherchangesin,non-controllinginterest At June 30, 541 (556) (13,285) 190,087 176,787 1,221 178,0082015 1. See Note 5 "Share capital" 2. See Note 6 "Other reserves" 3. See Note 2 "Acquisition of BG Group plc" 4. Includes a reclassification of $534 million between Shares held in trust and Other reserves, with no impact on total equity, in order to appropriately reflect the carrying amount of Shares held in trust at cost. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Quarters $ million Half year Q2 2016 Q1 2016 Q2 2015 2016 2015 Cash flow from operating activities 1,280 455 4,114 Income/(loss) 1,735 8,651 for the period Adjustment for: 119 753 1,753 - Current tax 872 4,700 671 272 395 - Interest 943 698 expense (net) 6,097 6,147 4,673 - Depreciation, 12,244 9,277 depletion and amortisation (535) (175) (247) - Net (gains)/ (710) (1,859) losses on sale of non-current assets and businesses1 (2,474) (3,909) (1,588) - Decrease/ (6,383) (1,960) (increase) in working capital (946) (789) (1,136) - Share of (1,735) (2,541) (profit)/loss of joint ventures and associates 964 688 1,071 - Dividends 1,652 2,148 received from joint ventures and associates (533) (1,755) (90) - Deferred tax, (2,288) (1,593) retirement benefits, decommissioning and other provisions (346) (292) 255 - Other (638) 349 4,297 1,395 9,200 Net cash from 5,692 17,870 operating activities (pre-tax) (2,005) (734) (3,150) Tax paid (2,739) (4,714) 2,292 661 6,050 Net cash from 2,953 13,156 operating activities Cash flow from investing activities (5,796) (5,324) (6,205) Capital expenditure (11,120) (12,420) - (11,421) - Acquisition of BG (11,421) - Group plc, net of cash and cash equivalents acquired2 (216) (332) (208) Investments in joint (548) (617) ventures and associates 516 46 206 Proceeds from sale of 562 2,409 property, plant and equipment and businesses 23 16 165 Proceeds from sale of 39 169 joint ventures and associates 93 136 59 Interest received 229 115 (70) (37) (80) Other (107) (159) (5,450) (16,916) (6,063) Net cash used in (22,366) (10,503) investing activities Cash flow from financing activities 1,870 873 1,072 Net increase/ 2,743 817 (decrease) in debt with maturity period within three months Other debt: 9,472 264 10,045 - New borrowings 9,736 10,797 (972) (1,969) (2,188) - Repayments (2,941) (2,818) (725) (534) (317) Interest paid (1,259) (726) 397 422 424 Change in 819 419 non-controlling interest Cash dividends paid to: (2,436) (2,258) (2,294) - Royal Dutch Shell (4,694) (5,226) plc shareholders (34) (35) (27) - Non-controlling (69) (45) interest - - - Repurchases of shares - (409) 6 (4) (5) Shares held in trust: 2 (45) net sales/(purchases) and dividends received 7,578 (3,241) 6,710 Net cash from/(used 4,337 2,764 in) financing activities (217) (1,237) 417 Currency translation (1,454) (43) differences relating to cash and cash equivalents 4,203 (20,733) 7,114 Increase/(decrease) (16,530) 5,374 in cash and cash equivalents 11,019 31,752 19,867 Cash and cash 31,752 21,607 equivalents at beginning of period 15,222 11,019 26,981 Cash and cash 15,222 26,981 equivalents at end of period 1. Includes the increase to fair value in the carrying amount of Woodside in the second quarter 2016 (see page12). 2. See Note 2 "Acquisition of BG Group plc" 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 ("the Company") and its subsidiaries(collectively referred to as "Shell") have been prepared in accordance with IAS34 Interim Financial Reporting as issued by the International AccountingStandards Board and as adopted by the European Union, and on the basis of thesame accounting principles as, and should be read in conjunction with, theAnnual Report and Form 20-F for the year ended December 31, 2015 (pages 120 to125) as filed with the U.S. Securities and Exchange Commission. In addition tothose accounting policies, following the acquisition of BG Group plc, Shellaccounts for net investment hedges where the effective portion of gains andlosses arising on hedging instruments that are used to hedge net investments inforeign operations are recognised in other comprehensive income until therelated investment is disposed of. The Directors consider it appropriate to continue to adopt the going concernbasis of accounting in preparing these Interim Statements. The financial information presented in the Interim Statements does notconstitute statutory accounts within the meaning of section 434(3) of theCompanies Act 2006 ("the Act"). Statutory accounts for the year ended December31, 2015 were published in Shell's Annual Report and a copy was delivered tothe Registrar 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 the Act. 2. Acquisition of BG Group plc On February 15, 2016, the Company acquired all the voting rights in BG by meansof a Scheme of Arrangement under Part 26 of the Act for a purchaseconsideration of $54,034 million. This included cash of $19,036 million and thefair value ($34,050 million) of 218.7 million A shares and 1,305.1 million Bshares issued in exchange for all BG shares. The fair value of the sharesissued was calculated using the market price of the Company's A and B shares of1,545.0 and 1,538.5 pence respectively on the London Stock Exchange at itsopening of business on February 15, 2016. BG's activities mainly comprise exploration, development, production,liquefaction and marketing of hydrocarbons, the development and use of LNGimport facilities, and the purchase, shipping and sale of LNG and regasifiednatural gas. The acquisition is expected to accelerate Shell's growth strategyin global LNG and deep water. It is expected to add material proved oil and gasreserves and production volumes, and provides Shell with enhanced positions incompetitive new oil and gas projects, particularly in Australia LNG and Brazildeep water. Goodwill of $9,024 million was recognised on the acquisition, being the excessof the purchase consideration over the fair value of net assets acquired as setout below. The net asset value, in line with accounting standards, isdetermined by reference to oil and gas prices, as reflected in the prevailingmarket view on the day of completion. Oil and gas prices are based on theforward price curve for the first two years, and subsequent years based on themarket consensus price view. The fair values of the net assets, and therefore the resultant goodwill, areprovisional. FAIR VALUE OF NET ASSETS ACQUIRED (PROVISIONAL) $ million Assets Non-current assets Intangible assets 6,178 Property, plant and equipment 58,444 Joint ventures and associates 4,702 Deferred tax 2,432 Other 2,181 73,937 Current assets Inventories 417 Trade and other receivables 4,202 Cash and cash equivalents 6,803 11,422 Total assets 85,359 Liabilities Non-current liabilities Debt 18,949 Deferred tax 8,393 Decommissioning and other provisions 6,401 Other 665 34,408 Current liabilities Debt 1,345 Trade and other payables 3,926 Other 670 5,941 Total liabilities 40,349 Total 45,010 Acquisition costs of $391 million were recognised in the Consolidated Statementof Income in production and manufacturing and selling, distribution andadministrative expenses ($47 million in 2015 and $344 million in the firstquarter 2016). The acquired activities of BG are now significantly integrated with those ofother Shell entities and therefore it is impracticable to identify separatelyeither the amounts of revenue and income since the date of acquisition that BGhas contributed to the Consolidated Statement of Comprehensive Income, or therevenue and income of Shell for the half year 2016 as though the acquisitiondate of BG had been as at January 1, 2016. 3. Segment information Segmental reporting has been changed with effect from 2016, in line with achange in the way Shell's businesses are managed. Shell now reports itsbusiness through the segments Integrated Gas (previously part of Upstream),Upstream, Downstream and Corporate. Comparative information has beenreclassified. Integrated Gas is engaged in the liquefaction and transportation of gas, andthe conversion of natural gas to liquids to provide fuels and other products,as well as projects with an integrated activity from producing tocommercialising gas. Upstream combines the operating segments Upstream, whichis engaged in the exploration for and extraction of crude oil, natural gas andnatural gas liquids, the transportation of oil and wind energy, and Oil Sands,which is engaged in the extraction of bitumen from oil sands that is convertedinto synthetic crude oil. These operating segments have similar economiccharacteristics because their earnings are significantly dependent on crude oiland natural gas prices and production volumes, and because their projectsgenerally require significant investment, are complex and generate revenues formany years. Segment earnings are presented on a current cost of supplies basis (CCSearnings), which is the earnings measure used by the Chief Executive Officerfor the purposes of making decisions about allocating resources and assessingperformance. On this basis, the purchase price of volumes sold during theperiod is based on the current cost of supplies during the same period aftermaking allowance for the tax effect. CCS earnings therefore exclude the effectof changes in the oil price on inventory carrying amounts. Sales betweensegments are based on prices generally equivalent to commercially availableprices. INFORMATION BY SEGMENT Quarters $ million Half year Q2 2016 Q1 2016 Q2 2015 2016 2015 Third-party revenue 5,373 5,679 4,807 Integrated Gas 11,052 10,756 1,711 1,922 1,489 Upstream 3,633 3,306 51,315 40,929 66,082 Downstream 92,244 123,998 16 24 24 Corporate 40 48 58,415 48,554 72,402 Total third-party revenue 106,969 138,108 Inter-segment revenue 896 743 1,167 Integrated Gas1 1,639 2,144 6,049 5,037 7,507 Upstream1 11,086 14,301 1,993 1,455 271 Downstream 3,448 633 - - - Corporate - - CCS earnings 982 905 1,335 Integrated Gas 1,887 2,474 (1,974) (1,350) (561) Upstream (3,324) 839 1,717 1,700 2,746 Downstream 3,417 5,260 (423) (456) (68) Corporate (879) (239) 302 799 3,452 Total CCS earnings2 1,101 8,334 1. Inter-segment revenue for the first quarter 2016 has been amended for Integrated Gas and Upstream to include revenue previously accounted for as intra-segment revenue. 2. See pages 5 and 27 for a summary of significant items, including redundancy and restructuring charges, impacting segment earnings. RECONCILIATION OF CCS EARNINGS TO INCOME FOR THE PERIOD Quarters $ million Half year Q2 2016 Q1 2016 Q2 2015 2016 2015 302 799 3,452 Total CCS earnings 1,101 8,334 Current cost of supplies adjustment: 1,158 (398) 765 Purchases 760 413 (323) 120 (219) Taxation (203) (117) 143 (66) 116 Share of profit/(loss) of joint 77 21 ventures and associates 1,280 455 4,114 Income/(loss) for the period 1,735 8,651 4. Earnings per share EARNINGS PER SHARE Quarters Half year Q2 2016 Q1 2016 Q2 2015 2016 2015 1,175 484 3,986 Income attributable to Royal Dutch 1,659 8,416 Shell plc shareholders ($ million) Weighted average number of shares as the basis for: 8,000.0 7,173.4 6,304.6 Basic earnings per share (million) 7,586.7 6,298.4 8,053.3 7,230.4 6,383.9 Diluted earnings per share (million) 7,641.8 6,380.5 5. Share capital ISSUED AND FULLY PAID Ordinary shares of �0.07 Sterling each deferred shares Number of shares A B of �1 each At January 1, 2016 3,990,921,569 2,440,410,614 50,000 Scrip dividends 116,249,778 - - Shares issued for the acquisition 218,728,308 1,305,076,117 -of BG Group plc1 Repurchases of shares - - - At June 30, 2016 4,325,899,655 3,745,486,731 50,000 At January 1, 2015 3,907,302,393 2,440,410,614 50,000 Scrip dividends 23,430,143 - - Repurchases of shares (12,717,512) - - At June 30, 2015 3,918,015,024 2,440,410,614 50,000 1. See Note 2 "Acquisition of BG Group plc" NOMINAL VALUE Ordinary shares of �0.07 each $ million A B Total At January 1, 2016 340 206 546 Scrip dividends 9 - 9 Shares issued for the acquisition 17 103 120of BG Group plc1 Repurchases of shares - - - At June 30, 2016 366 309 675 At January 1, 2015 334 206 540 Scrip dividends 2 - 2 Repurchases of shares (1) - (1) At June 30, 2015 335 206 541 1. See Note 2 "Acquisition of BG Group plc" The total nominal value of sterling deferred shares is less than $1 million. At Royal Dutch Shell plc's Annual General Meeting on May 24, 2016, 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 �185 million(representing 2,643 million ordinary shares of �0.07 each), and to list suchshares or rights on any stock exchange. This authority expires at the earlierof the close of business on August 24, 2017, and the end of the Annual GeneralMeeting to be held in 2017, unless previously renewed, revoked or varied byRoyal Dutch Shell plc in a general meeting. 6. Other reserves OTHER RESERVES $ million Merger Share Capital Share Accumulated Total reserve premium redemption plan other reserve reserve reserve comprehensive income At January 1, 2016 3,398 154 84 1,658 (22,480) (17,186) Other comprehensive - - - - (3,718) (3,718)income/(loss)attributable to RoyalDutch Shell plcshareholders Scrip dividends (9) - - - - (9) Shares issued for the 33,930 - - - - 33,930acquisition of BGGroup plc1 Repurchases of shares - - - - - - Share-based - - - (268) 534 266compensation At June 30, 2016 37,319 154 84 1,390 (25,664) 13,283 At January 1, 2015 3,405 154 83 1,723 (19,730) (14,365) Other comprehensive - - - - 1,502 1,502income/(loss)attributable to RoyalDutch Shell plcshareholders Scrip dividends (2) - - - - (2) Repurchases of shares - - 1 - - 1 Share-based - - - (421) - (421)compensation At June 30, 2015 3,403 154 84 1,302 (18,228) (13,285) 1. See Note 2 "Acquisition of BG Group plc" The merger reserve and share premium reserve were established as a consequenceof Royal Dutch Shell plc becoming the single parent company of Royal DutchPetroleum Company and The "Shell" Transport and Trading Company, p.l.c., nowThe Shell Transport and Trading Company Limited, in 2005. The increase in themerger reserve in the first half year 2016 in respect of the shares issued forthe acquisition of BG represents the difference between the fair value and thenominal value of the shares. The capital redemption reserve was established inconnection with repurchases of shares of Royal Dutch Shell plc. The share planreserve is in respect of equity-settled share-based compensation plans. 7. Derivative contracts The table below provides the carrying amounts of derivatives contracts held,disclosed in accordance withIFRS 13 Fair Value Measurement. DERIVATIVE CONTRACTS $ million Jun 30, 2016 Mar 31, 2016 Dec 31, 2015 Included within: Trade and other receivables - 1,143 1,250 744non-current Trade and other receivables - current1 9,188 12,297 13,114 Trade and other payables - non-current 1,742 1,369 1,687 Trade and other payables - current1 9,493 11,026 10,757 1. The amounts at March 31, 2016 have been reduced by $4,963 million in order to appropriately reflect certain contracts on a net basis which were previously presented gross. As disclosed in the Consolidated Financial Statements for the year endedDecember 31, 2015, 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, 2016 are consistent with those used in the year ended December 31,2015, and the carrying amounts of derivative contracts measured usingpredominantly unobservable inputs have not changed materially since that date. The fair value of debt excluding finance lease liabilities at June 30, 2016 was$83,367 million (March 31, 2016: $71,903 million; December 31, 2015: $53,480million). Fair value is determined from the prices quoted for those securities. DEFINITIONS A. Earnings on a current cost of supplies basis attributable to shareholders Segment earnings are presented on a current cost of supplies basis (CCSearnings), which is the earnings measure used by the Chief Executive Officerfor the purposes of making decisions about allocating resources and assessingperformance. On this basis, the purchase price of volumes sold during theperiod is based on the current cost of supplies during the same period aftermaking allowance for the tax effect. CCS earnings therefore exclude the effectof changes in the oil price on inventory carrying amounts. The current cost ofsupplies adjustment does not impact net cash from operating activities in theCondensed Consolidated Statement of Cash Flows. The reconciliation of CCSearning to net income is as follows. Quarters $ million Half year Q2 Q1 Q2 2016 20152016 2016 2015 302 799 3,452 Earnings on a current cost of supplies basis 1,101 8,334 (CCS earnings) (63) 15 (91) Attributable to non-controlling interest (48) (212) 239 814 3,361 Earnings on a current cost of supplies basis 1,053 8,122 attributable to Royal Dutch Shell plc shareholders 978 (344) 662 Current cost of supplies adjustment 634 317 (42) 14 (37) Non-controlling interest (28) (23) 1,175 484 3,986 Income attributable to Royal Dutch Shell plc 1,659 8,416 shareholders 105 (29) 128 Non-controlling interest 76 235 1,280 455 4,114 Income for the period 1,735 8,651 B. Identified items Identified items are shown to provide additional insight into segment earningsand income attributable to shareholders. They include the full impact onShell's CCS earnings of the following items: Divestment gains and losses,impairments, fair value accounting of commodity derivatives and certain gascontracts (see below), and redundancy and restructuring. Further items may beidentified in addition to the above. Impacts of accounting for derivatives In the ordinary course of business Shell enters into contracts to supply orpurchase oil and gas products as well as power and environmental products.Derivative contracts are entered into for mitigation of resulting economicexposures (generally price exposure) and these derivative contracts are carriedat period-end market price (fair value), with movements in fair valuerecognised in income for the period. Supply and purchase contracts entered intofor operational purposes are, by contrast, recognised when the transactionoccurs (see also below); furthermore, inventory is carried at historical costor 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. Impacts of exchange rate movements on deferred tax balances With effect from 2016, identified items include the impact on deferred taxbalances of exchange rate movements arising on: The conversion to dollars of the local currency tax base of non-monetary assetsand liabilities, as well as losses. This primarily impacts the Integrated Gasand Upstream segments. The conversion of dollar-denominated inter-segment loans to local currency.This primarily impacts the Corporate segment. The comparative information presented in this Report has been restated for thisdefinition change. The following table sets out the impact of the definitionchange on the identified items for the year 2015. RESTATED IDENTIFIED ITEMS BY SEGMENT $ million Quarters Q1 2015 Q2 2015 Q3 2015 Q4 2015 Identified items as previously reported Integrated Gas 15 (117) (878) (347) Upstream 1,849 (146) (7,340) (479) Downstream (132) (215) (136) 978 Corporate and Non-controlling interest (217) 4 464 (137) Impact of definition change Integrated Gas (367) 50 (469) 227 Upstream (254) 53 (292) 30 Downstream - - - - Corporate and Non-controlling interest 129 (28) 155 (4) Identified items as restated Integrated Gas (352) (67) (1,347) (120) Upstream 1,595 (93) (7,632) (449) Downstream (132) (215) (136) 978 Corporate and Non-controlling interest (88) (24) 619 (141) C. Capital investment Capital investment is a measure used to make decisions about allocatingresources and assessing performance. It is defined as the sum of capitalexpenditure, acquisition of BG, exploration expense (excluding wellwrite-offs), new investments in joint ventures and associates, new financeleases and other adjustments. The reconciliation of Capital expenditure toCapital investment is as follows. Quarters $ million Half year Q2 Q1 2016 Q2 2016 20152016 2015 Capital investment: 1,153 22,824 1,313 Integrated Gas 23,977 2,614 3,700 35,038 4,603 Upstream 38,738 9,245 1,389 1,092 1,085 Downstream 2,481 1,934 42 21 49 Corporate 63 99 6,284 58,975 7,050 Total 65,259 13,892 - (52,904) - Capital investment related to the (52,904) - acquisition of BG Group plc (216) (332) (208) Investments in joint ventures and (548) (617) associates (336) (224) (643) Exploration expense, excluding (560) (1,145) exploration wells written off 9 (414) (18) Finance leases (405) (24) 55 223 24 Other 278 314 5,796 5,324 6,205 Capital expenditure 11,120 12,420 D. Divestments "Divestments" is a measure used to monitor the progress of Shell's divestmentprogramme. This measure comprises proceeds from sale of property, plant andequipment and businesses, joint ventures and associates, and other IntegratedGas, Upstream and Downstream investments, adjusted onto an accruals basis, andproceeds from sale of interests in an entity while retaining control (forexample, proceeds from sale of interest in Shell Midstream Partners, L.P.). Quarters $ million Half year Q2 2016 Q1 2016 Q2 2015 2016 2015 516 46 206 Proceeds from sale of property, plant and 562 2,409 equipment and businesses 23 16 165 Proceeds from sale of joint ventures and 39 169 associates (70) (37) (80) Other (in Cash flow from investing (107) (159) activities) 398 421 298 Proceeds from sale of interests in Shell 819 298 Midstream Partners, L.P. 135 39 93 Other1 174 129 1,002 485 682 Total 1,487 2,846 1. Mainly changes in non-current receivables included within Other (in Cash flow from investing activities), which are not considered to be divestments. E. 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. $ million Jun 30, 2016 Jun 30, 2015 Income for current and previous three quarters (4,716) 13,494 Interest expense after tax 1,139 1,033 Income before interest expense (3,576) 14,527 Capital employed - opening 230,949 230,235 Capital employed - closing 282,835 230,949 Capital employed - average 256,892 230,592 ROACE -1.4% 6.3% Return on average capital employed on a CCS basis excluding identified items isdefined as the sum of CCS earnings attributable to shareholders excludingidentified items for the current and previous three quarters, as a percentageof the average capital employed for the same period. $ million Jun 30, Jun 30, 2016 2015 CCS earnings excluding identified items for current and 6,546 17,474previous three quarters Capital employed - opening 230,949 230,235 Capital employed - closing 282,835 230,949 Capital employed - average 256,892 230,592 ROACE on a CCS basis excluding identified items 2.5% 7.6% F. Gearing Gearing, calculated as net debt (total debt less cash and cash equivalents) asa percentage of total capital (net debt plus total equity), is a key measure ofShell's capital structure. $ million Jun 30, Mar 31, Dec 31, Jun 30, 2016 2016 2015 2015 Current debt 10,863 7,868 5,530 7,366 Non-current debt 79,466 73,005 52,849 45,575 Less: Cash and cash (15,222) (11,019) (31,752) (26,981)equivalents Net debt 75,107 69,854 26,624 25,960 Add: Total equity 192,506 198,014 164,121 178,008 Total capital 267,613 267,868 190,748 203,968 Gearing 28.1% 26.1% 14.0% 12.7% G. Operating expenses Operating expenses comprise production and manufacturing expenses; selling,distribution and administrative expenses; and research and developmentexpenses. 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, 2015 (pages 8 to 12) 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 deliver competitive returns and pursue commercial opportunities depends in part on the robustness and, ultimately, the accuracy of our price assumptions. * Our ability to achieve strategic objectives depends on how we react to competitive forces. * The acquisition of BG Group plc exposes us to integration risks and other challenges. * Following the acquisition of BG, we seek to execute divestments in the pursuit of our strategy. We may not be able to successfully divest these assets in line with our strategy. * 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. * 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. * 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 contractual terms, laws and regulations. For example, the outcome of the United Kingdom's (UK) recent referendum to leave the European Union (EU) could have a material effect on us depending on the impact of future changes in UK and EU laws and regulations. In addition, we and our joint arrangements and associates face the risk of litigation worldwide. * Our operations expose us to social instability, civil unrest, terrorism, piracy, acts of war and risks of pandemic diseases that could have a material adverse effect on our business. * A further erosion of the business and operating environment in Nigeria could have a material adverse effect on us. * Rising climate change concerns have led and could lead to additional legal and/or regulatory measures which could result in project delays or cancellations, a decrease in demand for fossil fuels and additional compliance obligations, and therefore could adversely impact our costs and/ or revenue. * The nature of our operations exposes us, and the communities in which we work, to a wide range of health, safety, security and environment risks. * The operation of the Groningen asset in the Netherlands continues to expose communities to earth tremor risks. * Our future performance depends on the successful development and deployment of new technologies and new products. * We are exposed to treasury and trading risks, including liquidity risk, interest rate risk, foreign exchange risk, commodity price risk and credit risk. We are affected by the global macroeconomic environment as well as financial and commodity market conditions. * We have substantial pension commitments, whose funding is subject to capital market risks. * We mainly self-insure our risk exposure. We could incur significant losses from different types of risks that are not covered by insurance from third-party insurers. * An erosion of our business reputation could have a material adverse effect on our brand, our ability to secure new resources and our licence to operate. * Many of our major projects and operations are conducted in joint arrangements or associates. This could reduce our degree of control, as well as our ability to identify and manage risks. * We rely heavily on information technology systems for our operations. * Violations of antitrust and competition laws carry fines and expose us and/ or our employees to criminal sanctions and civil suits. * Violations of anti-bribery and corruption laws and anti-money laundering laws 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. * Violations of trade controls, including sanctions, carry fines and expose us and our employees to criminal sanctions and civil suits. * The Company's Articles of Association determine the jurisdiction for shareholder disputes. This could limit shareholder remedies. FIRST QUARTER 2016 PORTFOLIO DEVELOPMENTS During the quarter, Shell completed the acquisition of BG for a purchaseconsideration of $54,034 million. This includes cash of $19,036 million, andthe fair value ($34,050 million) of 1,523.8 million shares issued in exchangefor all BG shares. Following completion of the acquisition on February 15,2016, BG was consolidated within Shell's results. For practical purposes, thisincludes February and March 2016, as the impact for the first half of Februaryis deemed immaterial. The consolidation of BG resulted in an increase to first quarter 2016 cash flowfrom operating activities of $0.8 billion and an increase to CCS earningsattributable to shareholders excluding identified items of $0.2 billion. Goodwill of $9,024 million was recognised on the acquisition, being the excessof the purchase consideration over the fair value of net assets acquired (seeNote 2). Shell completed the United Kingdom office footprint review announced during thefinal stages of the BG combination. The outcomes of the review are subject toappropriate engagement with employees and employee representatives. The reviewrecommended a consolidation of all Shell's London and South East basedoperations into Central London with the intention to close the Thames ValleyPark office in Reading by the end of 2016. The review also recommended that allAberdeen-based onshore operations move to the Shell Aberdeen Tullos office,with BG's offices at Albyn Place closing by 2016 and the closure of Shell'sBrabazon House office in Manchester by the end of 2017. Integrated Gas During the quarter, first LNG production was achieved at the non-operatedGorgon project (Shell interest 25%) on Barrow Island, offshore Australia.Subsequent to first LNG cargo delivery, LNG production was temporarily halteddue to mechanical issues with the propane refrigerant compressor on Train 1. In Australia, the Browse Joint Venture participants (Shell interest 27%)decided not to progress with the development concept being studied for theresource as it did not meet commercial requirements for a positive finalinvestment decision ("FID"), considering the current economic and marketenvironment. In Indonesia, INPEX as operator of the Abadi field (Shell interest 35%)received a notification from the Indonesian government authorities instructingto re-propose a plan of development based on onshore LNG for the Abadi LNGproject. Shell and INPEX remain committed to work together with the Governmentof Indonesia to ensure that the Abadi project moves forward to optimallydevelop the Abadi gas reserves in a manner that benefits all. Upstream In Brazil, Shell announced the start of oil production from the third phase ofthe deep-water Parque das Conchas BC-10 development (Shell interest 50%) in theCampos basin. Also in Brazil, the seventh non-operated FPSO, Cidade de Maric�, (Shellinterest 25%) reached first oil in the BM-S-11 block of the Santos Basin,offshore Brazil. The FPSO has a production capacity of 150 thousand barrels perday. Shell announced that it has decided to exit the joint development of the Babsour gas reservoirs (Shell interest 40%) with ADNOC in the emirate of AbuDhabi, United Arab Emirates, and to stop further joint work on the project.This reflects the economic climate prevailing in the energy industry. In the United Kingdom, Shell has agreed to sell its 7.59% interest in theMaclure oil and gas field in the North Sea for a purchase consideration of some$24 million. Completion is subject to necessary approvals. Shell had continued success in its exploration programme with 10 discoveriesand appraisals in Brunei, Egypt, Malaysia, Nigeria, Oman, and the UnitedStates. This included a notable oil discovery in the United States with thenon-operated Kepler North well (Shell interest 50%) in the Gulf of Mexico, anda notable gas discovery with the non-operated Jerun-1 well (Shell interest 30%)in Malaysia. Upstream divestments totalled some $38 million for the first quarter 2016 andreflected, among others, the first tranche of the sale proceeds of the Anasuriadevelopment in the North Sea. Downstream During the quarter, Shell announced a conditional agreement for the sale of its51% shareholding in the Shell Refining Company in Malaysia for $66 million. Thetransaction is expected to complete in 2016, subject to regulatory approval. In the United States, Shell announced that it has signed a non-binding Letterof Intent to divide the assets of Motiva Enterprises LLC. The Motiva jointventure was formed in 1998 and has operated as a 50/50 refining and marketingjoint venture between Saudi Arabian Oil Company and Shell since 2002. In theproposed division of assets, Shell will assume sole ownership of the Norco,Louisiana refinery (where Shell operates a chemicals plant), the Convent,Louisiana refinery, nine distribution terminals, and Shell branded markets inFlorida, Louisiana, and the Northeastern region. Saudi Refining Inc. willretain the Motiva name, assume sole ownership of the Port Arthur refinery inTexas, retain 26 distribution terminals, and have an exclusive licence to usethe Shell brand for gasoline and diesel sales in Texas, and in the majority ofthe Mississippi Valley, the Southeast and Mid-Atlantic markets. Also in the United States, Shell completed the sale of an additional 4.66%interest in Shell Midstream Partners, L.P. to public investors via the issuanceof an additional 13,400,000 LP units for net proceeds of $421 million. Shell announced FID on a project to expand China National Offshore OilCorporation ("CNOOC") and Shell Petrochemical Company's ("CSPC") existing 50/50joint venture in Huizhou, Guangdong Province, China. Subject to regulatoryapprovals, Shell and CNOOC have agreed that CSPC will take over CNOOC's ongoingproject to build additional chemical facilities next to CSPC's petrochemicalcomplex. The project includes the ongoing construction of a new ethylenecracker and ethylene derivatives units, which will increase ethylene capacityby more than 1 million tonnes per year, about double the current capacity. Itwill also include a styrene monomer and propylene oxide plant. In May, Shell announced that it completed the sale of Dansk Fuels in Denmarkfor a consideration of $0.3 billion. Dansk Fuels comprises retail, commercialfuels, commercial fleet and aviation businesses, and products trading andsupply activities associated with those businesses. FIRST QUARTER SUMMARY OF IDENTIFIED ITEMS With effect from 2016, identified items include the impact of exchange ratemovements on certain deferred tax balances, as set out in Definition A. Thecomparative information in this Report has been restated following this change. CCS earnings attributable to shareholders for the first quarter 2016 reflectedthe following items, which in aggregate amounted to a net charge of $739million (compared with a net gain of $1,023 million for the first quarter2015), as summarised below: * Integrated Gas earnings included a net charge of $89 million, primarily reflecting a gain of some $400 million related to the impact of the strengthening Australian dollar on a deferred tax position, offset by a net charge on fair value accounting of certain commodity derivatives and gas contracts of some $170 million, asset impairments of some $130 million, and other items including a litigation provision. Integrated Gas earnings for the first quarter 2015 included a net charge of $352 million. * Upstream earnings included a net gain of $87 million, primarily reflecting a gain of some $360 million related to the impact of the strengthening Brazilian real on a deferred tax position, partly offset by asset impairments of some $300 million. Upstream earnings for the first quarter 2015 included a net gain of $1,595 million. * Downstream earnings included a net charge of $310 million, primarily reflecting the net impact of fair value accounting of commodity derivatives of some $240 million and impairments of some $190 million, partly offset by gains on divestments of some $130 million. Downstream earnings for the first quarter 2015 included a net charge of $132 million. * Corporate results and Non-controlling interest included a net charge of $427 million, mainly reflecting a charge of $266 million related to the payment of stamp duty in the United Kingdom for the acquisition of BG, and a charge of some $190 million related to the impact of the strengthening Brazilian real on deferred tax positions related to financing of the Upstream business, partly offset by $100 million for the non-controlling interest share of an impairment of a Downstream asset. Earnings for the first quarter 2015 included a net charge of $88 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 Guidance and Transparency Rule (DTR) 4.2.7R (indication of importantevents during the first six months of the financial year, and their impact onthe Condensed 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 shown on pages 62-64 in the AnnualReport and Form 20-F for the year ended December 31, 2015. On behalf of the Board Ben van Beurden Simon Henry Chief Executive Officer ChiefFinancial Officer July 28, 2016 July 28,2016 INDEPENDENT REVIEW REPORT TO ROYAL DUTCH SHELL PLC Introduction We have been engaged by Royal Dutch Shell plc to review the CondensedConsolidated Interim Financial Statements in the half-yearly financial reportfor the six months ended June 30, 2016, which comprise the ConsolidatedStatement of Income, the Consolidated Statement of Comprehensive Income, theCondensed Consolidated Balance Sheet, the Consolidated Statement of Changes inEquity, the Condensed Consolidated Statement of Cash Flows and Notes 1 to 7. Wehave read the other information contained in the half-yearly financial reportand considered whether it contains any apparent misstatements or materialinconsistencies with the information in the condensed set of financialstatements. This report is made solely to Royal Dutch Shell plc in accordance with guidancecontained in the International Standard on Review Engagements 2410 (UK andIreland) "Review of Interim Financial Information Performed by the IndependentAuditor of the Entity" issued by the Auditing Practices Board. To the fullestextent permitted by law, we do not accept or assume responsibility to anyoneother than Royal Dutch Shell plc, for our work, for this report, or for theconclusions we have formed. Directors' responsibilities The half-yearly financial report is the responsibility of, and has beenapproved by, the Directors. The Directors are responsible for preparing thehalf-yearly financial report in accordance with the Disclosure Guidance andTransparency Rules of the United Kingdom's Financial Conduct Authority. The annual Consolidated Financial Statements of Royal Dutch Shell plc and itssubsidiaries are prepared in accordance with International Financial ReportingStandards as issued by the International Accounting Standards Board (IASB) andas adopted by the European Union (EU). The condensed set of financialstatements included in the half-yearly financial report has been prepared inaccordance with International Accounting Standard 34 Interim FinancialReporting, as issued by the IASB and as adopted by the EU. Our responsibility Our responsibility is to express to Royal Dutch Shell plc a conclusion on theCondensed Consolidated Interim Financial Statements in the half-yearlyfinancial report based on our review. Scope of review We conducted our review in accordance with International Standard on ReviewEngagements 2410 (UK and Ireland), "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) andconsequently 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. Conclusion Based on our review, nothing has come to our attention that causes us tobelieve that the Condensed Consolidated Interim Financial Statements in thehalf-yearly financial report for the six months ended June 30, 2016 are notprepared, in all material respects, in accordance with International AccountingStandard 34 as issued by the IASB and as adopted by the EU and the DisclosureGuidance and Transparency Rules of the United Kingdom's Financial ConductAuthority. Ernst & Young LLP London July 28, 2016 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. 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 announcement are unaudited. All peakproduction figures in Portfolio Developments are quoted at 100% expectedproduction. The companies in which Royal Dutch Shell plc directly and indirectly ownsinvestments are separate legal entities. In this announcement "Shell", "Shellgroup" and "Royal Dutch Shell" are sometimes used for convenience wherereferences are made to Royal Dutch Shell plc and its subsidiaries in general.Likewise, the words "we", "us" and "our" are also used to refer to subsidiariesin general or to those who work for them. These expressions are also used whereno useful purpose is served by identifying the particular company or companies.''Subsidiaries'', "Shell subsidiaries" and "Shell companies" as used in thisannouncement refer to companies over which Royal Dutch Shell plc eitherdirectly or indirectly has control. Entities and unincorporated arrangementsover which Shell has joint control are generally referred to as "jointventures" and "joint operations" respectively. Entities 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 announcement 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 announcement, 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. There can be no assurance that future dividend paymentswill match or exceed previous dividend payments. All forward-looking statementscontained in this announcement are expressly qualified in their entirety by thecautionary statements contained or referred to in this section. Readers shouldnot place undue reliance on forward-looking statements. Additional risk factorsthat may affect future results are contained in Royal Dutch Shell's Form 20-Ffor the year ended December 31, 2015 (available at www.shell.com/investor andwww.sec.gov). These risk factors also expressly qualify all forward-lookingstatements contained in this announcement and should be considered by thereader. Each forward-looking statement speaks only as of the date of thisannouncement, July 28, 2016. Neither Royal Dutch Shell plc nor any of itssubsidiaries undertake any obligation to publicly update or revise anyforward-looking statement as a result of new information, future events orother information. In light of these risks, results could differ materiallyfrom those stated, implied or inferred from the forward-looking statementscontained in this announcement. This Report contains references to Shell's website. These references are forthe readers' convenience only. Shell is not incorporating by reference anyinformation posted on www.shell.com We may have used certain terms, such as resources, in this announcement thatthe United States Securities and Exchange Commission (SEC) strictly prohibitsus from 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. This announcement contains inside information. July 28, 2016 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 Guidance and Transparency Rules of the UK FinancialConduct Authority. As such: (1) the interim management report can be found onpages 2 to 10 and 21 to 27; (2) the condensed set of financial statements onpages 11 to 20; and (3) the directors' responsibility statement on page 28 andthe auditors' independent review on page 29. Company No. 4366849, RegisteredOffice: Shell Centre, London, SE1 7NA, England, UK. Contacts: - Michiel Brandjes, Company Secretary - 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 END