Welcome to the Royal Dutch Shell 2016 Q2 Results Announcement. There will be a presentation followed by a Q&A session. I would like to introduce the first speaker, Mr. Ben van Beurden. Please go ahead. Ben van Beurden - Chief Executive Officer & Executive Director: Thank you very much, operator. Ladies and gentlemen, welcome to Shell's second quarter 2016 results call. I'd start, as usual, with the disclaimer statement. And then, it's been just two months since we had a Capital Markets Day where we gave an update on Shell's transformation strategy, which is to create a world-class investment case for shareholders. So what I want to do is recap on that a bit and then Simon will take you through the results and the progress that we are making with the financial framework. Let me say that our Downstream and our Integrated Gas businesses delivered strong results this quarter, although the lower oil prices do continue to be a significant challenge across the business and particularly, of course, in the Upstream. I think, overall, when we look at Shell's results, we are in a transitional stage in 2016 where we – there have been life movements in our figures for the BG purchase and consolidation, the restructuring charges, and the buildup of debt amplified, of course, by lower oil prices. And all of this comes in a period where we have substantial cost savings, spending reduction programs underway, combined with a large divestment program and a strong development pipeline. So, altogether, this is a very complex period for the company. But as these actions all come together in the next several years, we are reshaping the company to create a world-class investment case for shareholders. We are firmly on track for $40 billion underlying operating cost run rate at…

Thank you. We'll now begin the question-and-answer session. We'll take our first question from Oswald Clint from Bernstein. Please go ahead.

Yes. Thank you very much. Maybe, Ben, first off, just talking about Brazil and the progress you're having there. Obviously, as we look forward to the next phase of the growth that's coming from the replicant FPSOs in Brazil, so I'm curious just to understand what you're seeing there, your comfort level with the progress of those FPSOs coming onstream starting in 2017 onwards. I think an update there would be quite useful. And then, Simon, please, in terms of trying to get to as clean as possible cash flow number for the second quarter if I get this $12.8 billion (19:40) adding back working capital, but if we start to add back the restructuring, redundancy, onerous contracts, and maybe there's something for Canadian costs in the quarter for fires, just trying to get back to a cash flow number that might be as clean as possible for the quarter. I'm just wondering if you could help us get there, please. Thank you. Ben van Beurden - Chief Executive Officer & Executive Director: Okay. Thanks, Oswald. Simon, you want to start with the cash flow? Simon P. Henry - Chief Financial Officer & Executive Director: Sure. Thanks, Oswald. Maybe a question of interest to everybody. We all know quarterly cash flow can be a no-easy number. Particularly when we bring the two companies together, there is some movement around working capital, et cetera. So, the $2.3 billion headline can be adjusted clearly for working capital, $2.5 billion. We will probably adjust slightly downwards then for the cost of sales adjustment, but back up again for a $700 million charge tax on divestments. That is unique to the quarter, tax on the prior-year divestments. And there are one or two other moving pieces as well. But, fundamentally, the last three quarters,…

The next question comes from Iain Reid form Macquarie. Iain Reid - Macquarie Capital (Europe) Ltd.: Yeah. Hi, Simon. Just a quick confirmation on your sensitivity data you gave us on page 10 of the earnings release on the Upstream. When we're looking at this $3 billion per annum for every $10 movement in Brent on a year-on-year basis, I presume we have to include in that comparison the BG earnings from the year previously when we're trying to do a kind of quarterly estimate of how these numbers are moving on an annual basis, is that correct? Simon P. Henry - Chief Financial Officer & Executive Director: Yes, because the volumes are moving as well. But in the first instance, the simple answer is yes. I'll just put on record; I do not often have sympathy with you guys on the modeling. But just at the moment, I do, on the grounds that there are quite a lot of moving parts and this indeed is one of them. We've tried to help around it. The $3 billion, you're absolutely accurate on the Upstream, and also $2 billion sensitivity within Integrated Gas, which is overall a $5 billion sensitivity. But, of course, Integrated Gas has the added complexity of most of it being time lagged by four to six months on average. So, just to reiterate in Q2, our gas price variance was impacted more by Q1 oil prices and by Q2 oil prices. So, it was probably at a low or at least in the recent trend, the gas prices would have been low. And so, we'll do what we can to help, Iain, but you're absolutely correct that it does include the BG volumes. Ben van Beurden - Chief Executive Officer & Executive Director: Thanks very much, Simon. Thanks, Iain. Can I have the next question please, operator?

The next question comes from Brendan Warn from BMO Capital Markets.

Yes. Thanks, gentlemen. I'll just skip the one question, I guess, similar – along the lines of what just Iain asked. Just in terms of this transition period that you talked about, the deal effect, working capital and tax and if we just focus in on upstream, if I would think forward a year, so let's say Q2 2017, and if we kept oil price out of it, what sort of benefits are we going to see in the Upstream because of synergies and just sort of trying to understand what would be a clean result projecting for the year? Ben van Beurden - Chief Executive Officer & Executive Director: That's a tough question, Brendan, but let's see how much we can help you with it. Simon? Simon P. Henry - Chief Financial Officer & Executive Director: It maybe too tough for me, Brendan, but let me try. I think the – you need to watch three things, though. The costs are coming down in pretty much a straight line. We've had $40 billion total for the year. On an underlying basis, by the end of the year, that probably came down a little bit in an absolute term next year as well. So, it's going at a run rate of around 10% on the cost and that's across all the three businesses in which the Downstream is just below 50% of the total and I guess, Iain, the Integrated Gas is about a quarter. So, you can take that. And so, Integrated Gas is more like around 15%, 12% to 15% depending on the quarter. So, that's an indication. The synergies will kick in, for example, on exploration almost all in the Upstream and they – pretty much the $2 billion would be delivered by the end of this…

We'll now take the next question from Lydia Rainforth from Barclays.

Thanks and good afternoon. I'll stick to one question as well. I know you hate to come back to the Upstream side again, but just in terms of when you're looking at the results from the first half of the year and the question comes back to the idea, are you happy with where you are on the cost side or are you looking at those results and going actually maybe we need to go back to that at the beginning and see if we can take out even more than we have done already, but we need to have another look at how we're doing things? Thanks. Ben van Beurden - Chief Executive Officer & Executive Director: Thanks, Lydia. Let me make a few general comments and then maybe Simon wants to fill in on a bit more detail. Okay. I think, no, we are not happy on the cost takeout where we are at the moment. We are on a journey of cost takeout that will take us, as I've said, by the end of the year to a underlying run rate of $40 billion per year. I think it is fair to say that we have made a lot of progress in all areas. Probably in Upstream, we have made, relatively speaking, most of the progress. The Downstream has been on a longer cost journey, and of course, has never really had the comfort that a very profitable Upstream business had, where the focus was indeed on delivering value even if it involves somewhat more marginal cost. And Integrated Gas, of course, has a smaller cost base to start off with. So, yes, the focus is very much on the Upstream. But if I just look at where we are right now, and I now talk about…

The next question comes from Martijn Rats from Morgan Stanley. Martijn P. Rats - Morgan Stanley & Co. International Plc: Yeah. Hi. Good afternoon. I wanted to ask you two things. First, I'm still trying to figure out why the results were so weak as they were. And one area where, at least relative to our forecast there seems to be some differences, is in terms of price realizations. So the oil and gas prices that you report relative to what we expected based on benchmark crude and gas prices seemed quite low. Now, on the one hand, you can say, Martijn, your model wasn't very good. But at the other hand, we weren't very different from what others were forecasting. So, perhaps there is more general point to it. Would you say that conclusion is correct, that price realizations were relatively low relative to benchmarks? And if so, is there anything that explains that? And the second question I wanted to ask relates to the debt, because the debt did increase by a decent amount during the quarter, from $69 billion to $75 billion. And I know on the last call, you said that the debt would continue to be on an upward slope for a bit. But would you still say that it will trend up from here on? Yeah. Those are the two questions. Ben van Beurden - Chief Executive Officer & Executive Director: Thanks, Martijn. Simon, why don't you take them? Simon P. Henry - Chief Financial Officer & Executive Director: Obviously, I can't comment on either individual or aggregate models, but do you remember on price realizations, the North American gas prices that we quote? We're quite heavily exposed to Alberta AECO prices, which were lower than Henry Hub and we also take first of…

Next question comes from Jon Rigby from UBS.

Yeah. Thank you. Two questions. The first is on Upstream. I take your point that you can't infer too much of the future from quarter to quarter, but you have given sensitivity for your Upstream business. And if we look 1Q to 2Q, there seems almost no leverage for the $10 rise in the oil price in the Upstream now. I know it's post-tax, some of that is some moving parts. But I'd just like to understand a little better what those moving parts might have been that would offset the sort of nominally $750 million gain or improvement that perhaps we ought to have seen in that quarter sequential. Second, just on, you mentioned the dropdown since the MLP. Could you just go through the decision (37:41) mechanism for that? Would that involve equity raises in the MLP rather than debt so that you're not reconsolidating MLP debt? And is that $800 million a net number? So, obviously, it would be higher, the growth figure that's being dropped down. Thanks. Ben van Beurden - Chief Executive Officer & Executive Director: Thanks, Jon. Simon? Simon P. Henry - Chief Financial Officer & Executive Director: Just on the MLP equity first, it's new equity raise, Jon. If we raised debt, then it wouldn't show in what we comment upon. But the entire MLP is consolidated. We actually own more than 50% of the LP units anyway still.

Yeah. Simon P. Henry - Chief Financial Officer & Executive Director: But as long as we control the GP units, it will remain consolidated. It remains possible that we sell them LP units over time and they potentially count as divestments as well. On the Upstream Q1/Q2, let me try. We reclassified Woodside. Therefore, it's held available for sale. Its price went down. There's $100 million negative that happens to be in the Integrated Gas results. NAM, $100 million reduction between Q1 and Q2 simply because lower production. Fires in oil sands, $70 million. We all know that happened. Majnoon, we spend less money, reduces the earnings in Majnoon from a drilling effect. We had a plant shutdown in (39:04), $50 million. Italy, Val d'Agri shutdown, that's known in the public domain. It's been now $50 million. So, it's a very long list, Jon. And there are at least four others, $100 million or so, associated – got several $100 million in total associated with BG. There's an FX movement on a not-entirely-hedged sterling holding. They are all individually in the wrong direction from both your viewpoint and our viewpoint. They are not – none of those things I've just stated is relevant longer term, except I would actually like the cash in the back pocket today, but that's not how it is. Going forward, they won't get repeated. Sorry, I can't. There's no more I can say on that. It's just a long list of individual items that are different. And just to repeat what I think the guys now all have been saying, sequentially, it's not always a good basis to look at Shell, although I do fully appreciate that you can go back to last year and easily translate BG. The one thing I would just reiterate is that the PPA step-up on the depreciation remains $300 million a quarter, so $100 million a month. And that is a factor that you won't get if you just add Shell and BG. Ben van Beurden - Chief Executive Officer & Executive Director: Okay. Thanks for that, Simon. Thanks very much, Jon. I'm sure a question that was on the mind of many of you. Can I have the next question, please, operator?

The next question will come from Thomas Adolff from Credit Suisse. Thomas Y. Adolff - Credit Suisse Securities (Europe) Ltd.: Hi, Ben. Hi, Simon. I hope you're well. I've got only questions for Simon this time. Simon, I've got a feeling that you might be – I'm probably the wrong person to say that you're being a bit conservative on the underlying cash flow during the quarter if you ex out the restructuring changes. Yes, cost savings cost money, but they're, at the same time, structural in nature. There's a good chunk of it. So, I believe at least I think you've – when you make these adjustments ex the restructuring charges, actually cash flow was more than $5 billion. And should we be using that as underlying cash flow of the business as it stands today? And following on from that, if you think about restructuring and redundancy charges, how much of that has already been cured or impacted? How much have impacted your cash flow and how much more is there to go? And my final question on working capital in the first half of the year. If you ex out Iran, how much of that is reversible? Thank you. Ben van Beurden - Chief Executive Officer & Executive Director: Thomas, good questions. We all had to smile at your first one because we have debated that one as well. So, Simon, why don't you kindly take them? Simon P. Henry - Chief Financial Officer & Executive Director: If I do the similar breakdown of the smaller items, you're right, Thomas, it is above $5 billion for the quarter. But I deliberately gave average over the last three quarters. They're reasonable and it's a reasonable basis, but there is an underlying uptick in Q2. Although as with the…

The next question comes from Alastair Syme from Citi.

Hi. Thanks. Can I just quickly follow up on that last question, actually? So, all the restructuring charges you're taking are being accrued or are you putting anything straight through to cash flow, i.e., is there anything sort of bypassing working capital we need to think about? And secondly, can I just clarify what you've done on Woodside? There's note in the statement that you've reclassified the way you're counting it. Thank you. Ben van Beurden - Chief Executive Officer & Executive Director: Yeah. Both questions for Simon. Simon P. Henry - Chief Financial Officer & Executive Director: All right. There's some cash effect from the restructuring, but it's relatively small. Let me pick the two items. The idle rig and the – what essentially is redundancy payments and restructuring for the office leases, where there is certain office buildings that we will vacate before we can subcontract or otherwise go with the lease, but we're taking the payment there into the P&L but not the cash payment. So, it will play out. Most of it will play out in the next six to nine months, but it is likely, to reiterate, that there will be further redundancy changes because we do not yet reflect all of the 12,500 changes that we've previously made. At Woodside, the shareholding is 13%, give or take. It has long been effectively as an asset with not a long-term strategic intent to hold. We have recently seen one of the Shell-appointed directors retire and we do not have the right to replace. So, we've gone effectively from two to one director. We, therefore – the influence level has fallen below that at which we can recognize the investment as an equity associate. It is now held as an asset for sale. So, there will be quarterly volatility in the earnings that we see. But, importantly, there is a production and a reserves impact because we no longer will recognize the 25,000 barrels a day of production, that is the 13% share equivalent, and about 100,000 barrels of reserves will be de-booked because we no longer have sufficient influence to continue booking them. So, there will be ongoing volatility until such time as we actually sell the asset, but it is, in accounting terms, regarded as an available-for-sale financial asset and mark-to-market in practice every quarter. Ben van Beurden - Chief Executive Officer & Executive Director: Thanks, Simon. Thanks, Alastair. Can I have the next question please, operator?

The next question comes from Irene Himona from Société Générale. Irene Himona - Société Générale SA (Broker): Good afternoon, gentlemen. Just one question please on – concerning marketing product sales. Obviously, the recent oil price weakness has been driven by concerns about demand. You are the largest marketer in the world. Your product sales show some quite sharp declines year-on-year, but some of that is obviously your disposals. So can you clarify on a like-on-like basis what is happening to your product sales? And is there anything, any conclusions you can draw regarding trends in global demand please? Thank you. Ben van Beurden - Chief Executive Officer & Executive Director: Yeah. Thanks, Irene. I'm sure Simon will have the precise numbers to hand in a moment. But of course, it is the margin that we make on the product that is more important than the absolute number. What we have seen, if I just decompose your question to two parts, first of all, we still see total oil demand robustly grow this year. As a matter of fact, in quite a few of the markets where we are, ourselves, pursuing a growth strategy, we have seen very, very significant increase in gasoline and diesel sales, also in places like China, but particularly also in markets like India where we have re-established a growth strategy. And if I look at how our retail business and our global commercial, so predominantly lubricants business, with some aspect of specialities and aviation as well, how they have been doing, they have been very, very stable and ratable even at the sort of changes in volumes that you have been mentioning here. So, quarter-to-quarter, that business hasn't really changed very much. And neither do I expect that to be the case. Simon, any specific details…

Yes. The next question comes from Christopher Kuplent from Bank of America.

Thank you. Very quick from me. I just – last quarter, you actually gave us your earnings contribution from BG on a pro forma basis. I can't find that comment anywhere this quarter. Do you have a number in mind? Thank you. Ben van Beurden - Chief Executive Officer & Executive Director: Chris (51:04) Simon? Simon P. Henry - Chief Financial Officer & Executive Director: We have a number in mind. The reason we didn't share is we – it's becoming blurred at the edges or more than the edges now because, in particular, the trading activity has already moved over into Shell and Shell volumes. So, as we go forward, it's not a clean view. It is, however, a small loss and it's impacted by some of the one-off factors I spoke about earlier. And also note, the comment on EPS accretion at $65 that was in the original, and so step down from Q1, it's one of the contributions, the Q1 to Q2 trend, but nothing particularly significant in value terms. Ben van Beurden - Chief Executive Officer & Executive Director: Thanks, Chris. Thanks, Simon. Next question please, operator.

The next question will come from Asit Sen from CLSA.

Thanks. Good afternoon, guys. I have two questions, one in Brazil and I was thinking LNG. Ben, in Brazil, if pre-salt rules were relaxed, what would Shell's appetite be to double down in the country? So that's on Brazil. And on LNG, Simon, wondering if you could provide any early thoughts on second half integrated gas profitability relative to, say a little below $2 billion in the first half? There would be some volume growth and appreciate the sensitivity comments, but it's a black box given trading, so any thoughts will be appreciated. Ben van Beurden - Chief Executive Officer & Executive Director: Okay. Thanks, Asit. Let me take the Brazil one. Yeah, I think I said it before, if we see a relaxation of the participation rules in Brazil, so relaxing the 30% ownership, the operatorship rules, I think, yes, we would take a look at it. But at the same time, of course, you have bear in mind we would have to make sure that whatever we do in Brazil, stays within the capital constraints that we have set to ourselves. That we have been very, very clear on that. Going forward, no more than $30 billion of capital investment per year. And if oil prices stay at the level that we are seeing today, we will be actually ramping that number further down towards the bottom of the range that we have set, so closer to $25 billion. If they really stay as they are today, we will go below $25 billion. So the competition for capital would become of course more intense. So there would have to be of course a more attractive proposition than some of the other things that we'll be completing. Because believe me, if we hadn't put that ceiling in place, there…

Yes. The next question comes from Rob West from Redburn. Rob West - Redburn (Europe) Ltd.: Hi, there. Thanks very much for taking my question. You've given us some really useful numbers today, that $5 billion cash flow per quarter, I think it's around $40 oil you mentioned and you've got the long-term target of $20 billion to $25 billion of free cash flow by 2020. Obviously, this quarter, there's been disruptions that have hit the cash flow. But I was wondering with those two numbers I just mentioned, what level of disruption due to that, that kind of ongoing inevitable disruption that happens in the oil business, what contingency is there in those numbers for that to continue? I'm really interested if you could make a comment on that. And then, also in terms of some of the uncertainty arising from today, can you just comment on your attitude towards giving a bit of nearer-term cash flow guidance. I think, clearly, enormous amount of change under way at Shell. And we all understand that takes time, hence, your free cash flow targets being 2020 targets. But maybe could you give us your attitude around giving a 2017 operating cash flow number, what you might expect? Give us just a very, very broad range. Thanks very much. Ben van Beurden - Chief Executive Officer & Executive Director: Thanks very much, Rob. Well, let me just reiterate what Simon said a little bit earlier on. First of all, I also understand that this is a very difficult quarter for you to reconcile the numbers to get your estimates right. And it's very difficult to go off what should be indeed a quarter two to quarter two comparison. So I can imagine that it has not been an easy process. Let me…

Yes. The next question comes from Biraj Borkhataria from Royal Bank of Canada.

Hi. Thanks for taking my question. I had a couple please. The first one on pensions on the balance sheet, you've got a fairly large pension deficit and given the way bond yields have moved, that deficit seems to have widened further. I was wondering how we should think about that and if I tie that into your 30% gearing limit, is there a scenario where gearing maybe – or net debt doesn't necessarily increase as much as you thought it might, but for mechanical purposes on the ratio, that you might breach that 30% limit? That would be my first question. And the second question is on commentary from the service companies recently is all focused on the fact that they're no longer offering discounts and they're trying to push back in contracts. I know it doesn't really tie in with the continued cost reduction story for the majors. I was wondering if you had any comment on that or maybe recent conversations and how that relationship is going. Thanks Ben van Beurden - Chief Executive Officer & Executive Director: Thanks, Biraj. Let me tackle the second one and Simon will take the pension deficit one. No, I think we still see a continued cost takeout both in terms of capital cost, as well as our running cost in the upstream. Some of it is indeed through the competitive pressure that exists in a supply chain that sees just lower activity levels, so that is one. Secondly, with quite a few service companies, we're also reworking the way we work together. So it is genuine waste elimination, duplication of activities that if you really work very hard together with our on-well site staff and well site staff of service companies, you can find significant ways and means to reduce activity. And in terms of capital projects, also significant ways to either simplify, apply more common standards, or actually scope down some of the activities that we – or some of the aspects of projects that we would not do in a world with where we believed in higher oil prices to stay forever. So I don't see that effect that you described, but I'd probably see it for the right reasons which is that we actually take out activity and scope in addition to just applying the usual commercial pressure that is available to us now.

Pension? Simon P. Henry - Chief Financial Officer & Executive Director: Yeah. Hi. Thanks for the question, Biraj. Indeed, there's been a significant increase in the accounting version of liabilities as a result of the reduction in bond rates, and therefore, the discount rate that we apply to the liabilities, it was around $2.5 billion uptick in the quarter and over $4 billion in the year-to-date. Because pension funds, mostly they are funded. There are a couple of unfunded funds out there in Germany in some of the post retirement medical benefit in North America. But, fundamentally, the funded funds are funded if that makes sense to you. But you will see accounting movements that go through the comprehensive income statement and on the balance sheet and the lower for longer interest rate scenario that we effectively are looking at now, may lead to further increases in the liabilities. But the actual funds remain pretty solid The balance sheet impact and the impact on gearing. Well, when I quote 28.1%, it does not include the pension fund liability. When the rating agencies and ourselves look at it, we look very much at the liability, we look at the actual cash cost of servicing the pension which is between $1.5 billion and $2 billion a year typically. And we look at the P&L charge and how this all hangs together in terms of the ratios and effectively adjust the credit rating agency ratios accordingly. So it is a factor that impacts the way we think about cash flow over the balance sheet. It's not directly related to the 28% gearing number that we stated. Ben van Beurden - Chief Executive Officer & Executive Director: Thanks, Simon. Thanks, Biraj. Can I have next question please, operator?

Yes. The next question comes from Anish Kapadia from TPH. Please go ahead. Your line is open. Anish Kapadia - Tudor, Pickering, Holt & Co. International LLP: Hi. Three questions from me. Firstly, on the cash tax on disposals, I was wondering if you could just give us some guidance on what's remaining from previously announced disposals to be booked through the cash flow? And also in terms of your $30 billion disposal target, what's your base case assumption in terms of cash tax that will be paid on those disposals? And then the second question on the Lakes Charles postponement FID, I understand that you wouldn't be putting your own capital into that project. It would be [ECP] (01:06:40) that would be putting the capital in. So I'm just wondering the rationale for not going ahead with that project. Is it more that you're not as keen on the LNG market when those basically coming onstream or is there something else? And then just a very quick one on refining. If we see July refining margins persisting for the rest of the quarter, would it be reasonable to assume a loss for the net income line in refining? Thank you. Ben van Beurden - Chief Executive Officer & Executive Director: Okay. Thanks very much, Anish. I think we're making predictions on future income and refining as something I would like to stay away from. Refining is indeed a very cyclical business. We do – or rather we have seen, of course, quite a few cycles already in the last 12 months or so. We come off a second quarter 2015 that was pretty strong, then a drop off, then a recovery, and a drop off again. Now so in principle, we see the refining sector globally still being long.…

That's correct. There's no further questions. Ben van Beurden - Chief Executive Officer & Executive Director: Okay. Let me then say thank you very much for being with us today and for the many good questions that you have asked. I again would like to, before closing, reiterate that – what we have posted before that 2016 will be a transition year for us. So it's all about consolidating BG, it's launching and executing a multi-year change program which will of course still have to play out at the bottom line. And then of course, all of this in the context of lower oil prices as well. So, again, the overwhelming driver for our lower result that you have seen is the macro environment. So the $3 billion compared to the same quarter last year that is the result of lower oil prices, lower gas prices, as well as lower refining and chemical margins, and I think therefore, the guidance that we have given, the commitments that we have made, the outlook that we had for the end of the decade that we made a bit over a month ago is still all very much exactly the same. Let me remind you also that we will have good quarter results of course scheduled for November 1, 2016 and Simon will be there to talk to you then. So, for now, many thanks for your attention and have a good day.

Thank you. That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.