Shell plc (LON:SHEL)

AGM 2015

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May 19, 2015

Good morning, ladies and gentlemen. I'm Jorma Ola and I'm delighted to welcome you this morning to the Annual General Meeting of Royal Dutch Shell Plc. I would like to start by introducing my fellow directors. Starting on my right, Ben van Buren, our Chief Executive Officer Simon Henry, Chief Financial Officer and on my other side, our company secretary, Michel Branches and Hans Weyers, our Deputy Chairman and Senior Independent Non Executive Director. On the row behind, we have our other Non Executive Directors from my right to left Yulin Goh, Guy Elliott, Chairman of the Audit Committee, Charles Holiday, Chairman of the Corporate and Social Responsibility Committee Gerard Kleistele, Chairman of the Remuneration Committee Linda Stans Sir Nigel Sheinwald Patricia Woods and Gerrit Zahn. Before I go any further, I would just like to say a few words about health and safety in our venue for the AGM today. Firstly, if you see anything you consider to be unsafe or have concerns about, please bring it to the attention of 1 of the uniformed security staff to see around you will see around the hall. Secondly, should there be a need to evacuate the building, an announcement will be made over the surface theater Tannoy system instructing us to leave the building by the nearest exit. You will be directed to an assembly point where further information will be given. As you may have read in the notice of the meeting, we have again arranged for the meeting to be webcast. This means that shareholders who are unable to travel to The Hague can still follow the proceedings. And I welcome those of you who are watching the meeting in this way. In accordance with the company's articles of association and as I stated in the notice of the meeting, the meeting will be held in English. However, there are Dutch translation facilities available. If you need a headset or any assistance, please ask one of the ushers. As in previous years, I would like to say something about the timing. Each year, we receive a number of comments and requests to try and reduce the length of the meeting. I would like to finish around lunchtime. I will of course try and give all shareholders the opportunity to speak during the question and answer period. However, to enable us to finish in a reasonable time, I would ask that shareholders avoid excessively long questions or lengthy statements. I will explain later how I would like to conduct that part of the meeting. In the meantime, I would like to declare the Annual General Meeting formally open and suggest that with your permission the notice convening this meeting is taken as read. Thank you. Lena and I will now give a short presentation about your company and its activities. Before we start, let me highlight the disclaimer statement. 2014 was a year where we made continued progress in many areas, particularly with plans to improve financial performance and capital efficiency. Then our Chief Executive Officer will talk to you in more detail about our operational performance and his short to medium term priorities for Shell. But let me first say a few words about the global scene. The world population is growing rapidly from some 7,000,000,000 today to what will be an estimated 9,000,000,000 by 2,050. But even more importantly, 100 of millions of people are leaving poverty behind, which can only be a good thing. This means that over the first half of the century, energy demand is expected to double even when counting on a massive improvement in efficiency in what we do today. This will put pressure on the climate on water and food resources and require tremendous investment and innovation in energy projects. Shell will play its part here. In 2014, Shell's production was about 3,100,000 barrels of oil equivalent today. We produced some 2% of the world's oil and some 3% of the world's gas in 2014. CCS earnings last year were $22,600,000,000 We declared dividends and bought back shares worth some $15,000,000,000 combined. We invested $37,000,000,000 on capital projects, spent some $1,200,000,000 on research and development and some $160,000,000 on the communities in which we operate. All of this while paying some $18,000,000,000 of taxes and collecting another $73,000,000,000 for governments. We employ over 94,000 people and hired around 1200 new graduates in the company last year, skilled people in high quality jobs. Shell plays a positive and sometimes understated role in many countries around the world. Turning to the nearer term and the weak oil price environment since the end of 2014. A year ago, when we had our AGM, oil prices were around $111 They are quite a bit lower of that today. Volatility is a fact of life in our industry. It is what it is and we have to manage through it. Short term movements in oil prices can be driven by perception and prices tend to overreact on both the upside as well as the downside. In the medium term, supply and demand fundamentals tend to reassert themselves around the marginal cost of supply. We have not changed our long term planning assumptions of $70 to $90 to $110 Brent. The long term demand outlook remains robust and the industry underinvestment today simply leads to more upside risk in oil prices in the future. Today, your company is taking steps to preserve Shell's financial flexibility. This includes a freeze in dividends and a slowdown in capital spending in 2015. Taking choices on Shell's rich portfolio funnel and opportunities to take out cost, where there are multibillion dollar opportunities in our own cost base and in the supply chain. At the same time, we have to be careful not to overreact to spot prices. We are continuing with a very attractive suite of new projects, which are under construction and are preserving where we can a competitive set of new options for medium term shareholder value creation. Shell's approach to sustainable development runs across all our activities. The foundation of our approach is running a safe, efficient, responsible and of course profitable business even in low oil price environments. This means having the processes in place to manage safety environment and community involvement. Secondly, we share wider benefits with the location where we operate. The long term nature of our businesses means we can be a part of a community for decades. Thirdly, we want to be part of shaping a more sustainable energy future. The scale of the global challenges is immense and the effective collaboration is needed to shape a sustainable energy future. Our goal is to have 0 fatalities and no leaks or other incidents that harm our employees, contractors or neighbors. In 2014, we achieved the lowest recorded injury rates as well as our lowest ever recorded spill volume. Sadly, we still had 5 fatalities in our operations. In this area, we cannot be complacent. We manage safety through rigorous processes and by embedding a safety culture in the daily activities of our workforce. And we continuously engage with staff on our commitment to our 12 life saving rules and to reinforce their duty to intervene if they see any unsafe practices. Shell has a strong track record of transparency and this is something we remain committed to. The sustainability report published in April is in its 19th year. And we were the 1st oil major to publish details of oil spills in Nigeria online. We also voluntarily publish country by country tax payments for significant countries where we are allowed to in an easily accessible single location online. As part of our commitment to transparency, the Board also recommended that shareholders support the shareholder resolution on climate change, which you will have seen in the notice of the meeting. The shareholder resolution asks for enhanced reporting in a number of areas, several of which already form part of our ongoing reporting. We have provided further information this year in our sustainability report and our Greenhouse Gas website. All ahead of the resolutions requirement to build this into routine reporting as of 2016. All information on climate change, emissions management reporting and other topics related to the resolution will also be put on the Shell Greenhouse Gas website, which will become the main point to get information on topics related to the special resolution. Ben will go into further details around climate change in a moment. Turning then to competitive performance. The slide shows the 4 drivers of the long term incentive plans for the senior management in the company. Our cash flow growth has been competitive in the last few years and our cash flow $45,000,000,000 in 2014 was indeed strong in our peer group. This performance was underpinned by growth projects. We are making good progress, but there is a lot more we can do. The remuneration policies in the company reflect this performance. You will I'm sure have seen that we have made an offer to acquire BG earlier this year and that this offer has been recommended by the Board of BG. This is an important transaction for Shell. Shell and BG are a great fit. The combination with BG will accelerate our financial growth strategy, particularly in deepwater and liquefied natural gas. And both of these are growth priorities for Shell and areas where company is already one of the industry leaders amongst the IOCs, the International Oil Companies. The combination would have a great complementarity 5th in a number of countries. And this plus the efficiencies that would come from joining the 2 companies together should lead to substantial value creation for shareholders. All of this should be a springboard for a higher rate of portfolio change at Shell with an increase in asset sales, a reduction in combined capital investment and a reduction in the number of long term portfolio themes. This should enhance our future dividend potential and enhance the potential for share buybacks. I'm personally very pleased that your company has made this move, which I think will put us in a good place in the future. And with that, let me hand over to our CEO. So Ben, over to you. So ladies and gentlemen, I'm of course also very pleased to be here today at our 2015 AGM. And let me start with our strategy. Our strategy is to grow cash flow and to deliver competitive returns for you shareholders across the cycle. As you know, I set 3 priorities for the company in 2014 to improve the financial performance, to enhance capital efficiency and to deliver new projects effectively. And these priorities have not changed. We will have the same priorities also this year. We are allocating our capital on a global thematic basis. And as you can see that's the main categories here. We have the engines businesses, which is the downstream and the upstream. They are mature businesses and they are businesses that provide strong free cash flow. Then we have the growth priorities, so deepwater and integrated gas, where Shell is one of the leaders in the industry amongst the international oil companies. And then we have also as a third category the longer term category that covers potentially very large and very exciting positions for Shell, but that's in the future. And here we have to balance the growth opportunity also with the non technical risks that go with them. The plans that we set out in early 2014 in my mind are yielding the results that we wanted as we are balancing growth and returns in a slightly different way. You will have hopefully agreed with me that we deliver more robust financial performance. We have made a lot of progress in restructuring in some of the problem areas of our products in the North American Resources place. And our capital efficiency drive is starting to show up in the results as well. And of course, our projects came online as planned. So new deepwater startups especially in Gulf of Mexico with around 150,000 barrels of oil equivalent per day as a potential for Shell. And of course last year also saw the implementation of the acquisition of the Repsol LNG portfolio and that delivered actually already $1,000,000,000 of additional cash flow from operations in 2014 well ahead of what we had assumed at the time we considered the acquisition. Now as I said, we want to continue this emphasis in 2015. And we continue to review also the appropriate spending levels in the company. We have been structurally reducing spending levels on capital projects. This was $37,000,000,000 in 2014 and it will be $33,000,000,000 or less in this year. And as I said, we are allocating our capital on a global thematic basis. Now this means investing in projects that generate the best returns and cash flows and getting out of place where frankly we don't add enough value for you our shareholders. So we are restructuring at the same time. There's 3 broad themes. I already mentioned the worldwide resources place or products. And we're also looking very hard at the what we call the upstream engine, so the mature upstream positions. And this is an area where collectively we have some $77,000,000,000 of capital employed on the balance sheet that we are restructuring. And we are making good progress there. For example, in our products, the return on capital employed on a clean CCS basis as to the current cost of supplies was 13.9% almost 14% in the last 12 months. That's a major improvement from where we were a year ago. But at the same time, we also recognize that we are not done yet neither in our products nor in the other two themes. So you can expect there's more to come here. And of course, I already mentioned the startups that we had. I already mentioned the Repsol LNG acquisition, which we completed. For the startups, we had startups major startups in Malaysia, in Nigeria. And of course, I already mentioned the Gulf of Mexico where we brought on the Maers B tension leg platform, which in itself already has a capacity of more than 100,000 barrels per day. Now I also want to focus even though it was something that happened in 2015 on the proposed combination that Joanna mentioned the combination between Shell and BG. And this chart here shows the uplift that we will get in our production which is some 600,000 barrels of oil equivalent per day or an uplift of 20% more production. In our upstream engine, there will be a complementary fit such as in the North Sea. There will be some new additions to our portfolio countries where we are currently not present. And at the top of the chart in the longer term themes, BG brings new barrels in places like Kazakhstan and also in some new potential in North American shales again. But this combination will be a particularly good fit in Shell's 2 strategic growth priorities, so integrated gas LNG and deepwater. So here the combination of the 2 LNG portfolios really world class LNG supply and trading portfolios particularly in the Atlantic Basin and Australia and some important offtake contracts from third parties actually will create a very, very strong position for the combined company going forward. And in Brazil in deepwater, BG will add a lot of growth production from non operated fields in the Santos Basin including the supergiant Lula field, which is in the pre salt many of these positions still to be developed, but many also already in operation. Now let me then have a short update on some of the areas where I'm sure there will be further questions to come, but I thought I'd just also update you already on a high level on some of the areas where there's actually quite a lot of change in the portfolio. And let me start with Nigeria. As you may know, we have 3 main businesses in Nigeria. We have the SBDC joint venture. Shell has a 30% interest. That's an onshore joint venture. We have Nigeria LNG and we have the Deepwater. They are the last 2 are very successful perhaps much lower profile businesses than the joint venture we have onshore. And in 2013, our longer term shareholders here you will remember that we set out a strategic review of our footprint in Nigeria, particularly focused on the onshore portfolio where we had a lot of difficulties. And we wanted to refocus SPDC much more to a gas company, gas value change rather than onshore oil. And I'm quite pleased with the progress that we have made in the last 12 months. And that progress actually involves quite a significant divestment. We have sold some 4.8 $1,000,000,000 of assets in the last 5 years altogether. And that is actually pretty much in line also with what the federal government of Nigeria wants. They want to develop Nigerian companies in a country in upstream oil and gas operations. And of course that combines very well with our aim to have a smaller oil based footprint in Nigeria as well. But I want to be very clear again that this does not mean a wholesale exit from Nigeria. We will still be very much focused on continue invest in gas and liquefied natural gas and in deepwater. But the onshore part of the portfolio frankly the reality is that others are much better placed to operate that acreage than we are. And as I said, we will continue to invest also in the onshore, but probably a little bit more in pipelines and in gas infrastructure. Now some of the projects that we are investing in, gas projects that is onshore such as Southern Swamp and the Fokades Jokari project, they are projects to reduce flaring. They have had quite a few difficulties already for years, but also in the last year. And that is mainly due to lack of funding. The main venture partner in SBDC, which is the National Nigerian Petroleum Company has funding difficulties. They do not come forward with that part of the investments. And therefore, these projects continue to be impacted in the delay and delayed by that very fact. Now the whole situation in Nigeria showed some sign of improvement in 2014, but it does remain very, very challenging. The security situation of course 1st and foremost is very challenging. Last year just last year, we had altogether 19 staff and dependents and contractors kidnapped in 2014. All theft continued very, very vigorously and fortunately impacting of course our SBDC joint venture. Altogether on average last year some 37 1,000 barrels every day were stolen from us. And of course on top of that there was of course production deferment as we had to shut down repair and remediate some of the consequences of these criminal activities. It remains our largest challenge, group theft. We had 139 spills as a result of sabotage and theft by others just in 2014. That's more than 90% of the total spill volume in Nigeria in 2014. But we continue to make progress there by increased vigilance and more surveillance. We have surveillance also built into agreements that we have with local communities. And we have a much earlier identification and ceiling of non leaking theft points and remove them as much and as fast as we can. But it remains a long journey. If I then move to Alaska. As you know and I'm sure will be commented on early later on as well, we are planning to drill in the Chukchi Sea in this year and in 2016. Now that is of course dependent still on successful permitting. We have some legal obstacles that still need to be cleared. And of course, we have to also determine for ourselves that we are fully prepared to explore safely and successfully. Now recently, we received very encouraging support from the Department of the Interior in the United States with a record of decision that reaffirmed the 2,008 lease sale 193. And just last week, we received approvals from the authorities on our exploration plan, which of course is a very important milestone. But of course, we need a few more permits before we are completely ready and equipped to start the drilling this summer. Now on the health and safety and environmental side, we continue to upgrade our assets in the period that we paused the last 2 years. We have successfully tested the Arctic containment system, which was purpose built for this campaign. And we've added again additional oil spill response equipment. So as you can see, lots of activities that took place to prepare us as fully as appropriate for the 2015 drilling season. Now, let me move to Canada. Let me just again remind you that your company has a 60% stake in the Athabasca Oil Sands Project or AOSP. And AOSP has a production capacity of about 255,000 barrels of oil per day. At the mine and the upgrader that is associated with it where the bitumen is upgraded into synthetic crude oil that produces around 6,500,000 tons of carbon dioxide in 2014. And to mitigate some of that carbon dioxide emission and to ensure that these facilities remain competitive, we are at the moment installing a carbon capture and storage facility in Canada in that project in a project we call Quest. And Quest will be the 1st large scale commercial CCS project to reduce CO2 emissions in oil sands and is expected to start up this year. As a matter of fact, it is mechanically complete. We are starting it up as we speak and I hope we will have the opening ceremony in September. Now Quest when it has started up will capture and store more than 1,000,000 tons of CO2 produced in the bitumen processing facility. And it will be a very important step for the acceptability of our heavy oil activities there. Now let me then move closer to home to gas production here in the Netherlands. The Groningen gas field which of course is operated by Nam which is a joint venture that we have with Exxon and that is partnering of course with the Dutch government. That venture has been producing gas as many of our Dutch shareholders here know for many decades. But following increased seismicity in the area, the Dutch government has now proposed measures including reduced production and damage prevention, repair and reinforcement of buildings as well as some investments further investments in the regional economy. Now February of this year, the Dutch Safety Board OVE published a report on how the safety of residents was taken into account in the decisions up to January 2013. And the report frankly is quite critical of the parties involved. Report will also has also come with recommendations and NAM will fully implement these recommendations. And NAM has also apologized for the unrest and the nuisance that has been caused by earthquakes due to gas production in Groningen. Of course, we as a major shareholder in Nam support them very, very much. Respect the proposals of course that are outlined by the minister because we also think that this is a very, very important area that we have to get right. Let me move to another area where I'm sure we will have some discussion later on which is the area of climate change. And again, let me remind you that your company was the 1st company to actually acknowledge that there was a link between CO2 emissions and climate change. And we have thought through a pretty pragmatic strategy to position your company in the long term in the energy transition that is currently underway. And I'm happy to talk about it in a bit more detail later. And of course Shell is taking action in a number of areas to manage our own CO2 emissions. We are producing more natural gas, which is a low carbon dioxide fuel. We are producing low carbon biofuels. We are helping as I said earlier on to develop carbon capture and storage, a key tool to combat CO2 emissions and climate change. And we are working to improve the energy efficiency of our own operations, for instance, with coal generation facilities in our refineries and chemical plants and other investments to reduce energy use and CO2 emissions. And of course, we consider climate change in our investment decisions. We invest in projects using a $40 per ton of CO2 as a screening value even though that price may not actually be payable in the projects as we start them up. But we factor that in into the economics to make sure that these projects are economically robust in that sort of pricing environment. And of course, we use $70 to $110 oil, so a relatively high oil price also to impact the economics of our projects. Let me also make some comments on stranded assets, because this concept of stranded assets or the carbon bubble has attracted a lot of attention in the media. Our view on stranded assets, which I think we have been pretty clear and vocal on is that that particular theory in effect also ignores the reality of our industry. And as a matter of fact, it actually risks distraction from the real issues around the energy transition needs. If there would be no further investment in oil production, the gap between supply and demand could be 70,000,000 barrels per day by 2,040. So that's the equivalent of 6 times Saudi Arabia or 80 times the U. K. North Sea in oil production. So we will need sustained and substantial investment to just meet the demand to fuel economic growth, especially of course in the developing world. And of course at the same time we need to also support the energy transition that is currently underway. Now let me also update you on our own emissions. This is CO2 and flaring overall. So we report out on this in our sustainability report to the carbon disclosure project, which we've been in since 2003. And all this of course also comes together on our Greenhouse Gas website that Joao already referred to. Our total emissions have been stable in the 70,000,000 to 80,000,000 tonne per annum band for the last few years. But within that there has been a big improvement in energy efficiency in the downstream in our refineries and in chemical plants. And they actually account for some 45% of our overall emissions. Overall flaring levels have been in a band between 7,000,000 and 11,000,000 tonnes of CO2 equivalent for some 7 years and that is actually in a growing company. And of course, you will see in 2014 there was an uptick in flaring and that is due to a number of projects, so increased associated gas from production in our Majnoon operations in Iraq. We started up a deepwater project in the South China Sea, Kamuzat Kakap, both of which growth projects. And gas capture in these two projects will come at a slightly later stage. You will see the strength again come down when these projects are up and running and we are constructing them at the moment. In Nigeria, of course historically a very important country when it comes to flaring. Our flaring has decreased of course over the period that we started focusing on it by some 78% in the last 10 years, a great achievement again by our joint venture the SPDC. And I'm pleased to also say that we recently signed up for the World Bank 0 Routine Flaring by 2,030 initiative, a very important initiative because it brings together governments and oil companies and development institutions who then agree to cooperate to eliminate routine flaring altogether no later than 2,030. Now at Shell, we understand the benefits of research and development in new technologies, we are a technology company and we are spending around $150,000,000 a year of R and D on low carbon R and D and that is out of a budget of a little bit more than $1,000,000,000 a year. Of course, we see gas as a way towards a lower carbon energy system. But we also look as I said earlier on at technologies such as carbon capture and storage and biofuels. We invest in wind and in solar. And of course our Shell Technologies Ventures that is a particular venture that we have funds businesses across these renewable areas as well. Now let me then close out with a few words on dividend and share price performance. I'm sure many of you shareholders will also be interested in that aspect. And I hope you will agree with me that Shell has a very strong track record when it comes to dividends. Dividends are your company's main route to return money back to you. Over the last 5 years, we have declared more dividends than any of our sector peer group. In 2014, we continued dividend growth with a rise of over 4% for the year and the dividend is expected to be maintained at $1.88 per share in 2015 and that is despite the lower oil prices that we are seeing today. And in addition to that, as Joanna also mentioned, we have just returned an additional $3,300,000,000 of cash to shareholders and share buybacks last year. So all of this in my mind a very, very strong statement very much underlining your company's dividend track record and our commitment to return money to shareholders. And with that, Jomar, I hand back over to you. Thank you very much, Ben. And now we have come to that part of the meeting where you have the opportunity to ask questions or make comments. You may have seen in the notice of the meeting or in the leaflet you handed this morning that there are 21 resolutions for you to consider, most of which are indeed mainly routine nature of a listed for a listed PLC. However, as I mentioned earlier, we do have a resolution submitted by a group of shareholders, which we will come to later. I intend to invite all questions or comments of a general or operational nature when we consider the first resolution, which concerns the annual report and accounts. This includes any questions or comments about the recommended cash and share offer announcement for BG Group that we spoke about earlier. I will take all other questions on more specific matters when we reach the relevant resolution. So if you have any question or points you wish to raise relating to for instance remuneration, please raise them when we get to that part of the meeting. Given this, you've raised by the shareholder resolution, if you have any questions or comments about climate change, please raise these questions, I. E. Questions on climate change when we get to Resolution 21. Although, I may ask one of my fellow directors to answer or comment on a particular question you are making, please direct your question to me as Chairman of the meeting. I would also ask that you give your name when asking a question or making a comment. So please introduce yourself. Voting will take place at the end of the meeting using the white paper poll card, which if you are entitled to vote you were handed at the registration. You will be asked to deposit your signed poll card in any one of the ballot boxes located at the exits to the auditorium. The votes will be counted by the company's registrar, Equity, who I formally appoint thereby to act as scrutinizers for today's meeting. Thank you. As mentioned earlier, to allow as many shareholders and proxies to speak as possible And to keep the meeting to a reasonable length, I would ask the questions and comments are kept as brief as possible and relevant to the business of today's meeting. If I believe your question or statement gets to be excessively long, I may ask you to bring it to a close. So bear with me. So please let's be concise. As last year, I intend that where possible all questions or comments of a similar nature will be grouped together. So that may mean on Resolution 1, for example, that we take all questions and comments relating to dividends together and indeed any other issues you wish to raise that are relevant to the meeting in the same way together. Grouping questions and comments in this way will help to avoid repetition and ensure that we address as many issues as possible. However, please be patient if there's a lot of interest on any one particular issue. Your turn will come. As Chairman of the meeting, I have the duty to ensure that today's proceedings are conducted in a proper and orderly fashion and I will do my utmost to ensure that all shades of opinion will be given a fair hearing. To help me fulfill these responsibilities, I've asked that you respect the procedures that I just laid down. And on that note, may we turn now to Resolution 1, which is an ordinary resolution concerning the 2014 report and accounts. I propose that the report of the directors and the accounts of the company for the year ended December 31, 2014 be received. The full unqualified auditors report is set out on pages 99 to 104 of the annual report. I will now move to take questions and I'll take the first question from the question point number 1, please. Thank you, Mr. Chairman. My name is Mariana Olmkes and I represent TKP Investments. TKP Investments is the asset manager for 20 Dutch pension plans. On behalf of these long term shareholders of Royal Dutch Shell, we engage with the management of Shell on various sustainability issues. 1 of the issues has our special attention and that's why we have decided to come to speak at the AGM today to voice our concerns in public. Our concerns are related to the Groningen issue, seismic activity in the province of Groningen, the Netherlands as a result of the gas drilling activities by the NAM. The NAM, as mentioned, is the joint venture of Shell and ExxonMobil. These earthquakes caused damage to houses and buildings and the residents are worried about their safety. Shell has strict safety procedures to which all staff and contractors have to adhere. Also we as shareholders have experienced the Shell safety procedures at the start of today's meeting. Being aware of the escape route is good and important. In Groningen, however, where earthquakes occur as a result of the drilling operations, there is no escape route for residents. Therefore, they need to be sure they are safe. Residents should be able to lead their normal life and live safely today and tomorrow. We believe that the safety of the local residents is essential to secure the license to operate for Shell. Our offices are located in the Groningen area and I can tell that many families in Groningen do not feel confident about their safety. Apart from the financial impact caused by the damage to their houses, there is a negative impact on the well-being of many families. We have expressed our concerns on various occasions in meetings with Mr. Olela, Mr. Leyers and the Investor Relations department. From these conversations, we understand that Groningen issue is on the agenda of the Board and we have heard that in the presentation of Mr. Van Burden. Mr. Chairman, can you please confirm that Shell has indeed a focus on securing the safety of local residents in all your operations worldwide? And more specific for Groningen, can you please confirm that securing the safety of the residents in Groningen is a priority on Shell's agenda? Yes. Thank you very much for your question. And we certainly do sympathize with your concern, which as you noted, we have had a chance of having a dialogue about in the meetings during the last 12 months or so. And I can assure you that we do have in the board very closely followed the situation being in obviously in good cooperation between the board and the management in Shell as well as in direct dialogue with the NAM management who has the responsibility of addressing the issues. The safety and security of the people in the area, the local residents is of our utmost concern and we continue to work very hard to make sure that the issues will be addressed properly. On a daily basis, obviously, our management team is at it. Ben, do you have anything to add more concretely on Yes. Thank you very much for the question and comment. And yes, of course, we fully understand that issue. We fully share the concern of the local communities as well. And it's a very, very basic thing. It is a fundamental right of people to live safely in their own home. And I can only imagine how stressful it must be to be 24 hours a day in your own home not in the full knowledge that this is actually a safe place. This is why we have homes to be safe at. So of course as a shareholder in Nam, you all must ask, we follow this very closely. We support Nam wherever we can. But at the same time being very close to NAM and following with them and serving them with any technical and other advice that they may need. I must say I'm also quite confident that NAM is attacking this problem in the right way in a transparent way. And I have confidence that they will manage it also in a responsible way. Now let's be very clear. All the damage that will occur will be repaired. There is no question about it whatsoever, neither legally nor morally or in any other way. And I think also the last few years, the company has made a lot of progress in dealing with it. Of course, since 20 11, we've had more than 40,000 claims in Groningen that Nam had to deal with. A very large number of that been addressed, 75% been addressed. There is a number of cases that are difficult to resolve about 200 of them. But also there there is a very focused effort on making sure that they are all closed out in the course of this year. As a dedicated center as you I'm sure are very aware of center for Verdelgonen in Groningen that completely professionalizes this process of handling of claims. And I'm sure that the national coordinator who will come in place on the 1st June will also bring a lot of focus also state focus on the area and will also help to make Groningen not only a safer place, but also a better place to live. Again, as Joao Mestas, I can assure you that it is on the agenda of the Executive Committee in Shell, again to see in what measure or in what way we can help and support Nam. And of course, we respect all the decisions that are being made around winning of gas, production of gas in the Netherlands. And we are in a close dialogue with the Ministry of Economic Affairs on how best to handle that. It is a very, very difficult situation. It is also a situation that cannot be immediately reversed or wished away. It is a situation of course that is new to the Netherlands, but it is a situation that we are determined to continue to resolve as much as possible of course by understanding the mechanism of the earthquakes and what can be done about it. This is one of the recommendations of the OVV report that I mentioned. We will be focusing on that a lot as well. And on being very transparent and very open in the conversations that we have or rather that Nam has with the local community, so that everybody understands what is happening. Because in addition of course to the unrest and discomfort of not being safe in one's own home, the added problem of not being sure what's going to happen next is of course a level of distress that we should address and we can address hopefully quite effectively. Thank you. Thank you, Ben. And I would like now I'd like to ask whether there are any other questions question point number 1, the lady there, please. Good morning. My name is Nicoletta Marie Aicleer and I'm one of those 200 cases that you say that are going to be resolved. I live in Groningen and I am here representing some 400,000 people living on top of the Groningen field. So that's not just nuisance. We have tens of thousands of homes that are damaged. We have recently had reports that 1 152,000 homes and 18,000 other buildings, hospitals, schools, churches, churches that stood there for 100 of years that are now broken. They all have to be dramatically reinforced because we are to expect quakes with a ground acceleration that is virtually the same as the ground acceleration in the aftermath of the big quake in Nepal. So these will be lethal quakes that we are expecting. So it's not that we don't feel safe, we are not safe. And pertaining to this, I have a few questions because I have understood that repair, just the reinforcement of 152,000 homes and 18,000 other buildings will cost €30,000,000,000 on top of material damage. So our homes will be safe. They won't collapse, but still we will have damage with every quake. And this won't stop unless you go away if you stop the gas extraction. I have a few questions. Because recently, Nam, your subsidiary, has announced that it has to cut costs. Apparently, it's not so attractive anymore to extract gas from Groningen. It's not as profitable as it has been for decades for you, for Exxon and for the Dutch government, but not for the people living on top of the Groningen field. Is Shell thinking about selling or retracting its share, the 50% share in NAM as exit strategy? Is there an Article 403 statement liability declaration between Shell and its subsidiary NAM? If so, does this mean that Shell will remain responsible for the risks and consequences of gas extraction, gas storage and waste products even after you have exited Groningen? Can NAM hand over the concession to another party without this having consequences for Shell or Exxon? And if so, is there a chance that Nam will hand over the concession to another mining company within the next 2 years? Also, when whether or not this is the issue, I'm not sure. We've heard that NAM is cutting costs. I hope this does not mean that Nam is going bankrupt. But if it is going bankrupt, this means that we, the citizens, will have to go to the guarantee fund mining damage, the Weibo funds Mainbauchkaere. And I would like to know from you as a mining company who are funding this fund, how much money is in the guarantee fund mining damage? And is this enough to cover the cost for rebuilding the entire province of Groningen? And I have one other question and this is very important for your shareholders. There are secondary risks to the quakes. I live close to the production facility, the largest facility near the sea dike. 4,000,000,000 cubic meters of gas are extracted from underneath the dike, underneath the Waddensee near a dike which has not yet been reinforced, it cannot withstand the severe quakes that we are expecting. If a severe quake hits near the dike, it might burst and half of the province of Groningen will be flooded. Fuel production facilities will be flooded. People will lose their homes and they will lose their lives. This is what is at stake. We are not safe. Another secondary risk that I would like to draw the attention of the shareholders is that since Lobosan, the production is closed. Now we have the quakes slowly migrating towards Del Sol, We have Gemipa at Del Sol, 10% to 15% of the national chemical industry in the Netherlands is hosted in Del Sol. We have the tanks with natural gas condensate byproduct of oil gas extraction. These tanks host all of the natural gas condensate in Del Sol. This is highly flammable and toxic. Should a severe quake take place in Del Sol, you know this, I know this and now your shareholders know this, Del Sol will be obliterated. It will be gone. 20,000 to 25,000 people will be dead. So Royal Dutch Shell will then be responsible for destroying a Dutch city. And this is what is at stake. And it's not enough that you propose to operate safely and that you say that this is a nuisance. You are destroying Groningen and I really want to have answers to these questions. What impact will this have for your shareholders' value? What impact will this have for your reputation? Thank you very much for your questions. There were quite many questions, so Ben. I can repeat them if you want to. Thank you very much for your questions and your comments. And I am very sorry to hear that you are indeed 1 of the 200 more difficult. It's not so difficult. Just make sure that you buy my home which is broken. Then I can go away and lead a safe life with my family. I am sure that Nam will deal with your case also in the course of 2015 in a matter that is clear and respectful and responsible. You have a number of questions to do with the commitment of NAM and the cost savings. Let me be very clear indeed as a company, any company and certainly also company that is dependent on revenues of a product which at the moment sells at a lower price always has the responsibility to look at cost and look at efficiencies because it has the obligation to remain a strong and vital company to meet its commitments and to have long life. Num is no exception to that. But it doesn't mean by the way that we are going to or rather Num is going to take shortcuts on things that are vital or important or certainly not things that are legally prescribed or in the interest of our neighbors. So I can reassure you that cost cutting measures that are being considered throughout Shell and non joint venture no exception in that area always make sure that our priority is to have safety and security in the environment and compliance with the law being covered is always safeguarded and ring fenced. So it's more efficiency focused than anything else. On your questions to do with do we have a long term commitment to none? There is no plans whatsoever to look at an alternative future. We are not in any way considering divesting that position. We are of course committed to working with Nam to see how we see through this difficult period. You have been very vocal for very understandable reasons to explain how difficult and how large the nature of the problem is. Many of the points that you bring out indeed we are right in the middle of understanding exactly how we need to mitigate this in NAM together with the staffs to assist of the Mainen, the regulator together with the ministry. And sort of precautionary, the minister has decided in February already to lower production levels in the first half of the year, not being sure and clear yet what it will be in the second half of the year in anticipation and in preparation of being on the prudent side. State supervision of the mines has had 12,000,000,000 cubic meters. We're now at 40. So it's not being lowered to the level that state supervision of mines determines sales. Well, let me stay away from the specific comments there. But I think the Minister is very clear in the 16.5 Bcm that we have for the first half of the year and that is exactly what Nam I think is adhering to. We do have and we have been very clear, we have a commitment in all our companies to completely comply with the requirements that we have. The requirements that NAM has in relation to the Dutch mining law, the claims that flow from it they will be fulfilled. And there has never been any hesitation or any concern on our part to walk away from that. Some of the technical challenges that you have, I don't think I am in a position to comment on them in detail. I think that is a dialogue you need to have with Nam. And Like I asked, can you state that you have an Article 403 statement between Shell and NAM, which means that the responsibility will remain with Shell even after all of the gas has been extracted from our fleet. I have to come back. I'm not familiar with that article. I would like to know. And also I would really like to know how much money is there in the guarantee fund mining? I'm not familiar with what is in the fund at the moment. There is obviously a relationship that allows Okay. So we would like an official answer on behalf of Shell. How much money is in that fund? And is it enough for the repairs? I think the answers that to your question will come from Nam, who are the operator in this case. But I will make sure that your question is covered because we've asked them before and they won't answer. So please do. Also can you respond to my question about the reputational damage? Should something happen in Del Sol or with the SeaDike? Well of course, we are not only concerned about the immediate risks, but of course things like this have a much wider implication. It has reputational damage as well. And although that is an important consideration, the more important and more acute consideration is indeed the safety of the inhabitants, the safety of the environment. That is what the company is focusing on 1st and foremost and then reputation will follow from that. Okay. Well, the company is now focusing on the reinforcement which will take 30 years. So it means that many people will have to wait for decades before their home is safe. And so I would really like to know if Shell together with Nam will make sure that people who want to leave like me, I really, really want to leave, I don't want to stay there for any more minutes, that we can go away, that we have an exit strategy, that we can sell our houses which are now unsellable because they are broken and worthless. And you can sell them for a reasonable price because I don't want to wait decades. As I understand, there is an arrangement in place, which I think has been the outcome of the Alofta for Dialog Table. The arrangement is only if you sell your house and it's unsellable. I've tried for 4 years. It won't sell. Yes. Well, I hope you will appreciate that. And in particular cases like in your case, it's the only thing I can recommend and we'll also make sure that takes place that your case of course gets considered by NAM. I'm not in a position at this point in time. I hope you will appreciate to comment in detail on your particular circumstances. Okay. But just that you focus on helping the people to get away because this takes too long and it takes too much effort and people are broken just like the province of Groningen is. And I would just like to close in Dutch, Mene van Buren, if I do have 2 young daughters. I know you have 2 young daughters. I have a son of 12, I have a daughter of 10. When you go home tonight and you'll be putting your children to bed and you would be telling them, I love them. And I'm sure they do tell them also that they are safe, that they do not live in a house that's going to collapse possibly as a result of the actions of the company led by their father. I'll be going home to my children tonight later, I'll be back at home and groaning and I'll be putting them to bed and I'll be telling them that I love them, but I cannot tell them that they're safe. I have no future to offer them. I can only tell them I love them. That's all I have. Thank you. Thank you very much. I did not see any hands raised for any further questions on Groningen. So I that just leaves me to confirm what I said earlier. This topic will very much be on the agenda of the Board and we will be very much working together with the leadership team. Liaising with Nam whose shareholder shell is NAM will take most of the operational decisions on how to go ahead. But we will have our eyes and ears there and we will follow that very closely as a company. Your comments were heard loud and clear, the 2 issues that were raised through the questions of the 2 ladies. So thank you and we will move to the next question on question point number 2. Thank you very much Mr. Chairperson. My name is Don Gerritsen from the Investors Association For Sustainable Development in the Netherlands. Our collective members represent the assets under management of €1600,000,000,000 for your information. Let me start with a complement. We have seen your continued efforts towards more transparency in the field of sustainability. And so we highly commend also your efforts in the next few years on about transparency on climate change. So complements with regard to that development over the last year. I have two questions for you that we would like to address on behalf of the Investors Association. First one revolves about integrating externalities and the second one is about strategic long term targets. So in the first place, about integrating externalities. Qualifying, quantifying and monetizing externalities within business operations provides an excellent opportunity to see what the threats and opportunities are within the short medium and long run for a company. A lot of companies are already piloting a number of social and environmental profit and loss accounts projects. My question is, are you willing to start piloting for your social and environmental externalities in 2015? And are your shareholders and stakeholders able to read more about that in your annual report over 2015? My second question is about key strategic areas. For example, the area of renewable energy, the area of waste reduction, the area of biodiversity and a number of other strategic sustainability areas. Unfortunately, we have not been able to see strategic directions for the issues I mentioned, long term directions long term key performance indicators operationalized in a smart way for these key strategic areas. My question is, are you willing to provide more transparency about these key strategic areas in the annual report of 2015? And if there is no strategy in place, if there is no KPI, if there is no KPIs in place, there are no smart targets in place, are you willing to set these targets in 2015? So one question about integrating externalities, one question about key strategic targets. Thank you. Thank you very much for your 2 good concrete forward looking questions. And Ben will address those questions. Thank you very much, Nik Hesse. Yes, I think on your first question on externalities, it we're familiar with that of course as a concept. As a matter of fact, we were probably the 1st energy company that made clear that biodiversity needs to be an explicit consideration in our decision making around projects. We have since worked with a number of our key NGO partners as well to understand how using externalities more from an accounting perspective in our decision making and reporting can help. But this is in my mind still very much an emerging field. We are working in that. We're happy to understand how this works better so that we can come to a better articulation of what we call net positive impact of our operations. But I would say we are probably in the early pilot stage and are working with our partners like The Nature Conservancy, IUCN, IFC, but also with companies like Rio Tinto who of course have similar sort of challenges in their portfolio. It will probably take us a little bit of time before we understand what is the best sensible way to report meaningfully on this without having to answer a whole lot more questions that will flow from it. But we are familiar with the concept. And actually making these things clear and explicit is being seen as positive. As a matter of fact, while we are not yet in the phase that we can do this as a matter of routine accounting, Of course, we do factor these things in rather explicitly in all our projects that we undertake. We do undertake each of our major projects an assessment of what the environmental and social and other impacts maybe. And then of course we try to achieve certain outcomes or mitigate negative effects or create an overall positive effect for instance, unemployment or whatever in areas. And then we make these decisions part and parcel of how we manage the project and how we run the operation once the project is up and running. So it's not as if we are blind to the externalities. It is just we have not found a sort of acceptable societal or industrial acceptable way to accounting for it in a way that everybody understands. But we like to be at the forefront of that, so that you will probably see us making progress even though it may be an area where we have to learn our ways a little bit along with everybody else for that matter. On long term targets, we do have lots of targets at and certainly also in the areas that you mentioned. We are very clear on the things that we want to do in the areas of renewables, the things we want to do in the areas of waste management etcetera, etcetera. It is very hard to bring these things down to smart targets, because what we find more often than not is that by defining targets they become quite often too narrow or too myopic or they inform the wrong actions. So we much rather have detailed targets that are more relevant for projects under consideration or specific activities than having a corporate target. And let me give one example. You mentioned waste. Rather than having an overall waste target that says we will recycle x percent or we will reduce it with so many tonnes, it is much more sensible to take for instance Brent decommissioning of Brent and say for the Brent topsides, we want to recycle 97% of all the materials in there. That is a meaningful target that people who will be on that project can do something with. It's more meaningful than to just say our corporate waste reduction target will be X, which will be difficult to drive and very difficult to implement as well. But also here, I think we report on it quite extensively already in our sustainability report. And I hope you will derive from it a clear sense of progress even though we do not dress it up with lots of milestones along the way. I hope that goes away in explaining and addressing your issue. Thank you very much. Thank you. Just one follow-up question please. Thank you very much for your answer. Much appreciated. We see Shell as a leader in its field with a lot of progress and a lot of initiatives as you just mentioned. We are very curious to hear when Shell is about to publish its 1st social and environmental profit and loss account. We know that encounter for social and environmental externalities is still in its infancy, but we are very interested to see when you expect to issue your first CP and L. I don't think we have quite set a date for that. But it's when we do so, I'm sure there will be a very valuable dialogue with you and many other of our stakeholders as well. But thank you very much for your continued interest and in your encouraging comments as well. Looking forward. Thank you very much. Thank you. And next question from question point number 1. Good morning. My name is Don Luis Pace. I work for Global Witness. We've been talking to Shell about 1 oil block in Nigeria since 2008 and we're still yet to get proper answers. Today, I have some short questions for you that hopefully get to the truth of the matter today. So in 2011, Shell and its partner E and I, Eni, paid $1,100,000,000 for the oil block OPL-two forty five, which is one of the largest off the coast of Nigeria. The money should have ended up in state coffers where it's badly needed. However, while the payment was made by Eni and Shell to the Nigerian government, there was a separate agreement to pay the same amount to a company called Malibu Oil and Gas, which is controlled by the convicted money launderer and former Oil Minister, Dan Atete. As Atete had awarded the block Malibu while he was a Oil Minister, he had effectively given himself and his associates one of the most lucrative oil blocks in Nigeria. U. K. High Court proceedings and evidence seen by global winners makes it clear that Shell was aware that the deal it made was for the benefit of Malibu. This leaves Shell open to accusations of having purchased stolen goods and monetizing an illegally acquired state asset on behalf of the convicted felon. So if Shell's repeated claim that they only purchased the oil block from the Nigerian government is true, then the $1,100,000,000 that Shell and any paid should have gone into the Nigerian government's federation account. It didn't go into that account. The alternative as explained by the broker of the deal, the Nigerian Attorney General and the Nigerian government was that the government acted as an obligor or a conduit or as a U. S. Judge put it a straw man to pass the payment from Shell and Eni to Mr. Otete's company Malibu. So the first question is very easy multiple choice, so we don't get into any confusion is who's telling the truth? Is it the Nigerian Attorney General and the U. S. Judge or is it Shao? Okay. So secondly, Nigerian lawmakers called in 2014 for the deal to be canceled dealing it contrary to the laws of Nigeria. Annie and its current CEOs and former CEOs Mr. Claudio Discalci and Paolo Scaroni are under formal investigation by Italian authorities for corruption in this deal and Eni has self reported itself to U. S. Authorities. At the same time, British police have been investigating money laundering connected to the deal and $190,000,000 in proceeds of Shell and then these payment have been frozen in the U. K. And Switzerland. In short, Shell and its ability to add this massive block to its reserves is a risk and thus may negative its overall market performance, not to mention potential criminal investigations against Shell. So secondly, why has Shell not warned its shareholders about the risks posed by this deal? Thirdly, Shell has also repeatedly said that it's been transparent about all its payments in regard to this deal. Why then did Shell not disclose these payments the $1,100,000,000 $210,000,000 to the Nigerian Extractive Industry Transparency Initiative process on the basis that as Kjell has stated, it made these payments purely for the benefit of the Nigerian government. And then lastly Shell is still part of a group of major oil companies attempting to sidestep parts of a new landmark U. K. Law that will bring deals like this one into the open and is also leading a lobby effort in the U. S. To weaken the implementation of a similar law in the U. S. Just when these laws would actually inform Shell's investors of deals just like this one. So what is it that Shell has to hide? So four questions. Who's telling the truth? The Nigerian Attorney General or the U. S. Judge or Shell? Why has Shell not warned its shareholders about the risks posed by this deal just as Annie has? Why didn't Shell disclose the payments to the Nigerian Iasi? And why is Shell still lobbying to weaken transparency laws? Thank you for the questions. And Ben will address those questions. Thank you very much for your comments and questions. I think, yes, there is a lot of complexity to this story of LBL-two forty five. It took me some time to understand exactly the history of how this worked over a long period time as well. You make a lot of insinuations there. But basically what it boils down to in the end, yes, there was a process where we ended up in a dispute with the Nigerian government. That dispute was settled. That part of the settlement was indeed the payment of the amount of money that you mentioned. That payment has been made. We've never been unclear or untransparent about it. And we believe that payment was entirely made in accordance with the law of Nigeria in international practice morally okay. And I have really nothing else to add there. Could you answer the specific questions? Are you telling the truth about this payment that it was just a Nigerian government? Or is all the evidence the highest ranking Nigerian law officer and a U. S. Judge correct that you knew this money was going I think I've said what I want to say on this that the payment has been made as part of a settlement with the Nigerian government. It was a legitimate payment. And I think we have made that payment completely in line with the laws of the land and international law. There's not much more I can add to it. You make all sorts of references and accusations also on the part of E and I. I hope you will address these questions to E and I because that's really Last week in fact. That's why I'm here with you. Yes. And that I think is appropriate. Why didn't we mention this to our shareholders? Well, we are here. We have never been anything but transparent about this. Last year, the same question came up and we have also been very clear about it. There is no in my mind no risk or nothing extraordinary in relation to this transaction that should concern our shareholders here either. Now I think we have a history of being transparent in payments. We have been the founding members of the extractive industry transparency initiative. We are very, very proud of that pedigree. And the last reference that you make, which again is an insinuation that we would be against transparency of this is again completely unfounded. We have been very, very clear. We completely welcome and support the issue of transparency also the legislation that is currently being executed Brussels led into the U. K. That is how I want to be very clear on that. There was one concern to do with the the implementation of that legislation, which is that the legislation could in a way put us at risk of having to break the law in other countries. Criminal. I want to be a criminal by not reporting in the United Kingdom? Or do I want to be a criminal by reporting things that are a state secret in other countries? That issue needed to be addressed. That has been addressed. And now we are moving forward on this. Sorry, Mr. Peterson. I need to push you on this. So why didn't you disclose these payments to the Nigerian EITI process if you're a supporter of that? And then on the issue of the guidelines, Shell is backing and pushing business guidelines that we have a legal opinion from one of the most qualified EU law barristers in the U. K. Saying that the guidelines that Shell has been lobbying in favor of is illegal in the U. K. So why are you backing guidelines that seem to have recommend that companies don't disclose in line with the law? And why haven't we disclosed the payments in this very specific case? I'm asking a very specific question here. I think I've said everything that I need to say on this. Thank you very much. Okay. Thank you. Thank you very much. We'll take the next question from question point number 2. Good morning, Chairman. My name is Robert Vreken of WeConnect You Public Affairs and Investor Relations. I advise Charles to become the leading solar and hydrogen company in the world, the leader in renewable energy. And I feel that Ben van Burden made a lot of progress this year. For example, his strategic investment in LNG is excellent. Furthermore, we have 3 top companies in the Netherlands: Shell, Unilever and IMG. And at the moment the CEOs of all three companies are very communicative and we have a very strong focus on sustainability. And it's also a very important improvement in this world. ING and Unilever are leading. In my feeling there are a few things that can because approach is always the most important thing in the world. Keep it simple and Michel already has on some of his gas stations solar panels and advise you to put solar panels on all of the gas stations of Shell in the world. That's a very important signal. Furthermore, you can put solar panels around all your plants and on all of your real estate in the world. It's very easy to do. It's very cost efficient. Mr. Saum of ABN AMRO is well he can finance all those things together with rough Hammers. And this is very well you know and furthermore what's very important is to use the leading partners. A strategic investment in Tesla with Elon Musk will help because not only Tesla, the best electric car in the world at the moment, but also his Powerwall may help to solve solutions in Groningen for example. Another very simple new project can be the Oppo Foshower. You may recall that OPPOFO Shell only uses 1 liter of water in each minute. That means a water reduction and a gas reduction of 90% within households. That may help Groningen. Furthermore, your communications has improved enormously. What's harming the image of Shell is the discussions about Alaska, about Nigeria, about Groningen. And it's important to solve those things because there are many customers who don't use gas of Shell due to Alaska and Nigeria etcetera. Thank you. Thank you very for your comments and your suggestions. There wasn't really a direct question. Ben, would you like to make a very brief comment? Is that? Well, Mr. Feike, thank you very much for your very encouraging words. And I'm sure we will catch up later again. But it you're right. There are many areas where we can and should focus. And as a matter of fact, we do. I'll be happy to update you maybe separately on what we are doing in solar and wind and what we also can do in our existing portfolio. You're also unfortunately right is that some of the issues that occur in our operations have a wider impact. We've just heard about Groningen. And of course, this is a very, very difficult issue to resolve. We will not resolve it in a matter of weeks. It's not for lack of willingness or trying. It will be an issue that we will have to see through with all the difficulties that it has. I have no intention with some of these issues be it Nigeria or some of the others to sort of take a lighthearted view on this. It is unfortunately something that comes with the territory of being in the business that we are in. Thank you very much. And we'll then move over back to question point number 1. Next question. Mr. Chairman, my name is Kine. I speak on behalf of VB, the Dutch Investors Association as well as a large number of retail investors in Holland. Mr. Chairman, this is the 9th year in a row that I'm attending the shareholder meeting of Shell. And it always surprises me how negative very often the atmosphere is after I leave the meeting. And one might conclude that Shell is a terrible company, which is only making large mistakes and trying to cover up mistakes and so on. And of course, VEB and also our members, we recognize lots of the challenges which Shell has. But overall, I think we can conclude that most shareholders admire Shell as being a great company. And I think that needs to be said as well. Now before you offer me a job to work with Shell, which I will not, I do have 2 questions. The first question is the same one I've been asking in different tones and colors in the last in the previous 8 years and that concerns an element where I think Shell has been lagging for years and this is the I think it has to do with the capital efficiency which Mr. Ben von Burden has been indicating. Well compared to your competition the top five Shell is sometimes very good, but in some cases Shell is the worst. And Shell has been the worst for many years in using its balance sheet in an efficient way, which means getting in kind of return based on lots of assets which are laying there, huge investments which have been made and so on. Now for 8 years in a row, I've been asking this question and every time the answer was, well, Mr. Kiena, we recognize indeed that we've got some catch up to do. But be patient because as the years go by these kind of investments will pay off and then we will be the leader of the pack. Now I have to recognize indeed 9 years ago you were the worst in the sector or you were a laggard. In the meantime Shell is at mill of the rotor. My question very practical is, how many years do I need to ask this question before Shell will be the leader of the pack? Be as good as Exxon for instance or some of the other ones? That's my first question. The second question less critical, less negative or maybe pessimistic, but much more relevant maybe for shareholders. Could you describe the impact if oil and gas prices remain around the current levels for another decade? How much will that change or impact your strategy? How much may that impact your capacity to offer great dividends to your shareholders? So I'm wondering in all your scenario planning what if the current gas and oil prices are to stay for longer periods than assumed so far? Thank you for that question. Mr. Kiena, I we have one thing in common. We both have been here for 9 years. I've been on this side and you have been on the other side. And I always enjoy the dialogue. So thank you for your constructive approach. I would simply make a comment on the asset returns. I vividly remember the first time 8 years ago with comments on the return on assets and the assurance that things will get better. I think we have made great progress. We have some work to do. Certainly, the board is on top of it and the leadership team has been responding particularly well during the last couple of years or so. And I think our eyes will be at it going forward. That I can assure. I don't think we can give a date when we will hit the top, but we are at least at par with the people in the middle of the pack today and that is progress. In some other areas as you know, cash flow, etcetera. We are at the top of the industry. So with that really moving to the discussion on the oil price. So then or Simon, which one of you would like to make 1 or 2 comments? I'm happy to make a few comments and then perhaps Simon can add to it as well. Thank you for your very kind comments. Indeed, we will not offer you a job. We'd much rather have you stand there and make nice comments to us. Indeed, we have been improving on returns over the last years. As a matter of fact, we are number 2 when it comes to returns in the pack that we compare ourselves with. So in the middle of the road, but top of the middle of the road. And it's kind of hard to catch up with some of our American colleagues. And the reason is not so much that they are so much better than me are. The reason is that they have a different way of doing their accounting and their reporting, which gives them a structural sort of 2 percentage points of advantage when it comes to return on capital employed. Kind of hard to deal with. We would have to do we would have to be fundamentally so much better than say Exxon in order to have the same reported number. Has to do with the way we account for pensions and these sort of things. But at the same time, we will aspire to continue to lead and we will hopefully see a continued improvement on returns. What happens when the oil price stays low? Well, of course, there was a time when the oil price was even lower than it has been today and we could make decent returns and also a very progressive dividend at the time as well. If we will see a decade long low oil price, which by the way I think is not likely, but if that were to be the case, the inevitable consequence will have to be that the cost of doing projects will have to come down as well. Partly this is of course a cause and effect where high oil prices are caused by high cost and vice versa. And the industry will have to reset its entire spending pattern in order to be able to continue to grow and invest. So you will see a reversion back to better returns, but it will be a painful process. I'm sure that's the case as it was a very nice process to of course enjoy the rise in oil prices when we were still not building all the capital that was needed to sustain that cash flow. So is the dividend safe, which is really your question? Well, the dividend is a very, very important tool for us to reward our investors to reward you. And you will have of course our commitment that we will do everything to preserve the dividend policy that we've had for many years. Thank you. Thank you. We will then move over to question point number 2. Mr. Chairman, my name is Evert von Woerdhauser. I'm the Director of the foundation Kriesen Foundation for Massive Scale Solar Energy. Now what are we selling with Shell? There are fuels especially liquid fuels. And liquid fuels we will need forever practically. We don't see any scenario where shipping and aviation and probably also not agriculture can do without liquid fuels. So we are producing that and we are selling that and that's good. So we don't need to worry about that. But we produce them. We use raw materials. And what are raw materials that's petroleum and natural gas. And these are not inexhaustible. We know they are finite. And there are also other economic political problems. That's because of the climate policy which hopefully we get in the world. We will come to the metal of the stranded assets. And increasing fraction of the assets cannot be used anymore. So that's a big problem for all of us here and for the value of our shareholders and I don't really speak about dividend. Now I address you Mr. Gunther. You use and say arguments that the world cannot do without oil. True? That we are going to solve this problem one way or other. I don't know how you're going to do that. But it has to be so that all oil and gas we find will be used. There's no way out what you say. And here I definitely don't do not agree with you and hopefully we don't need to agree with you because there's an alternative. And the alternative is solar energy. And if you just make the calculation, the energy content of solar energy flowing into the regions like gazards. The energy content is comparable to the energy content of 25 centimeters of oil each year. So imagine a rain of oil pouring into the desert 25 centimeters of oil a year. Now how much is that? Now here in Holland, we have 20 75 centimeters of water each year. We consider that as quite a lot. So there's a tremendous amount of oil just going into huge areas in the deserts, which we hardly use. So why not put a lot much more R and D that you're already doing and investments in some time in using that new raw material this immense and never stoppable current of solar energy to produce the liquid fuels. Now you probably know that Shell is participating in a small project together with DLR and Etihad Zurich to produce kerosene out of salt energy. So the idea is you take water, you extract CO2 from the atmosphere, use a reactor which is powered by a concentrated solar radiation, very heat, very high temperature and you do a number of processes which shell is very good and you produce kerosene. Now this is R and D program and you probably it will be followed up. And I expect that it will grow better and better. So the time will come that Shell will invest more in solar oil factories in the desert than to try to find more new oil fields or gas fields. So will that be 2020? Probably not. Will it be 2,030 hopefully? So I want to know for you Mr. Von Bearden, what is your idea at what year Shell will invest more in sort of oil factories in the deserts than in trying to get the lost oil out of our shell. Yes. Thank you for your question. So Ben over to you. I've never been particularly good at forecasting the future, but it and if you will forgive me Mr. Van Voorhees, I will not give you a precise year. But I think your point is very well made and it and directionally I'm also in agreement with you that of course over time the role of solar will be more important and will become ultimately the dominant factor in our energy system globally. That is not going to be 2020. That is not going to be 2030. As a matter of fact, even under the most aggressive scenarios, scenarios that we have not seen in the history of mankind before, we still think that the amount of alternative energies in the energy mix will be limited to something like 30 5%, 40% maybe by the middle of the century. So the world will still need of course a very significant amount of fossil fuels until that time not just as a percentage, but also in absolute terms. Because even though I talk about percentages that energy system will become bigger and bigger as more and more people aspire to the same lifestyle as we have here in the Netherlands. But ultimately and certainly in the second half of the century, we will see solar become the dominant factor in the energy system. Now a company like ourselves needs to be ready for that and we are spending a lot of time and effort and research money actually very much on the subjects that you mentioned. So how can we harvest solar energy in the desert? How do we do that? Do we turn solar energy and hydrogen and ship that? Or do we somehow turn it into kerosene or other distillates and ship that? Or in places like Oman for instance, can we use solar energy to replace gas that is being used in electricity locally and then export the gas to other places. So in a way you swap the solar for natural gas. Some of these things are doable right now and we are pursuing them and we are investing in them. Take the Oman example where we actually do invest quite a bit in solar in order to free up hydrocarbons that can go elsewhere. But other schemes the ones like you mentioned will require a lot of technical innovation and development still before they are technically mature. And I'm afraid they will also need a much higher energy cost for them to be economically viable. Now we have to experiment with that all the time also to drive costs down and that's exactly what we are doing. But I do think we will be a few decades away before we can say that this now has also become the major component in our business portfolio. But when the environment is there, when the economic environment allows us to do these things economically robustly, we will be in the forefront. Okay. Thank you very much. And we will then move over to question point number 1. Good morning, Euron and Leila. Thanks for taking the time and for giving us the access to your company over the past years. My name is Jagdzwalia. I'm here on behalf of APG Asset Management with more than €400,000,000,000 of assets that we manage. I'm also speaking on behalf of our clients, which include ABP. So I'd start with a small complement just I'd start with a small complement on Agenda Item 21, which we fully support. So thank you for that. And I have 2 very short questions. The first one regarding the pending BG deal. I'm taking a look at that. I've covered BG as well. And when I look inside their portfolio and the opportunities that are there, would the BG deal present you with better alternatives to pursuing the Arctic? That's my first question. And so specifically I had in mind the Brazilian barrels which are lower cost and less risk. The second question I have is on Nigeria where as you've said you've been reducing your onshore footprint. And I'm just wondering given the history of oil spills in that region, what are your expectations around future cleanup costs and compensation claims from the legacy oil spills? Thank you. Thank you for your kind comment and your 2 concrete questions BG and Nigeria. Ben? Yes. Thank you very much for indeed the comment and the questions. Yes, BG will be a very important deal. Of course, it is a deal that plays to our strengths. That's what we like about it as well. It's a huge complementary portfolio where lots of very attractive but immature assets are being coupled with our portfolio and our capability. Bear in mind, of course, that we are in the areas like LNG and deepwater a more experienced company than BGE. So therefore that's the logic we'll be driving it. It is a large deal and it will to some extent also be transformational in the sense that it will allow us to just revisit many of the options that we have. Now I will not want to get ahead of that prematurely, but we've been very clear in the communication that we've put out around the deal that we will use this as an opportunity to really go through the portfolio and reset the portfolio in areas that we now feel we have more choice and we can take a view on the future in a slightly different way. What that will mean for the Arctic, I think is a little bit premature to answer at this stage. The deal has not completed. We're not sure whether the deal will complete of course. But when it does, you can have my assurance that we will take a very, very fundamental view on the entire company. Now on the issue of Nigeria, yes, we have been as I said divesting quite a few of our assets. With that of course we also divest some of the problems that we have. The ongoing activities to clean up will over time become the responsibilities and the liabilities of the new owners. That is just how the deal works. There is a number of liabilities that will very clearly stay with us. Like for instance the liabilities around Ogoniland, the liabilities around Bodo which have been well advertised and a few other cases where we indeed have outstanding disputes or legal cases. These we did not settle. These are the ones that we will follow-up on. I think they are well publicized and very clear also in the way of follow-up and commitment in that respect. And did you have a dollar amount of what those potential costs could run into? No. I think it will be hard to say this point in time. Take the Bodo claims. So we've settled the claim. We're very happy that we found a way forward with the community and our lawyers to finally settle that. So we are now at liberty to clean it up, which is long overdue. We are in the process of starting there with 2 contractors being appointed. We signed the contracts that will start with the cleanup process in July. I think going in there and doing the work will give us a clearer indication, a clearer sense of what it will take and what the overall cost will be. I think it's a bit premature to at this point in time put an amount to that how much it will cost even though I know that there have been some reported numbers out there, but they are not ours. Andrew, that will continue that dialogue in future. Absolutely. Yes. Thanks for taking my questions. Thank you very much indeed. Move over to question point number 2. Good morning. My name is Cindy Coleman and I am here as a proxy for Ms. Hilary Griffiths. I appreciate the chance to ask my question after the gentleman from APG as my question revolves around how Shell is engaging with institutional investors and managing risk to shareholder value. As the Board is no doubt aware, a growing number of academic, public and political institutions are divesting their investments from fossil fuel companies for both moral and financial reasons in response to the urgent climate change crisis. As Shell noted in its 2014 sustainability report, some external parties say that fossil fuel reserves could become stranded due to government policies to reduce CO2 emissions. The largest of the Dutch pension funds, ABP, has a €1,000,000,000 investment in Shell. A growing number of these Abe Pay pension holders in the Netherlands are uncomfortable with the fact that their pension is heavily invested in fossil energy companies in a time of climate change and are asking their pension fund, Abe Pay, to divest. As a biology teacher in Tilburg says, I work with young people every day. I want a sustainable world for them. Thus, my question, Mr. Chairman, will the Board comment and tell us more about your position on stranded assets? And what evidence and assumptions are you giving pension funds such as AVEPI that Shell assets are not at risk of becoming stranded? Thank you. Should I take that? You can take it. Okay. Ben agrees to take that. Thank you, Mrs. Goldman. Yes, the argument of stranded assets or the carbon bubble is of course a very well debated subject at the moment. We are familiar with it. And it is an argument that is that actually sounds quite convincing and quite strong. There is a few issues with the argument though and I will address this now from an investor's perspective. The climate change aspect I'll be happily talking about later when we consider the other resolution because there's also a moral aspect there. But if I just look at the investment case, let me say the following. So while the argument is clear and talks about a bubble these resources cannot be produced anymore, there is actually one key problem with it and that is that it ignores reality. The reality is that first of all, we will need a growing amount of energy in the world. And we talked about the growing population, 3,000,000,000 people coming out of poverty into middle class, new people being added to the planet quite often in areas that are less fortunate than we are here in Western Europe. These people will need energy as well. Energy demand will continue to grow. And that energy demand will have to be by and large met by fossil fuels at this stage. We may not like it. I probably like it even as less as many others do. But the reality is that 80% of the total energy system is made up of fossil fuels has been for many decades and will remain to be so for many years to come. Even on the most aggressive scenario that indeed we will be not only wildly successful in alternative energies, but we'll find very, very effective ways and means to reduce the use of energy and fossil fuels in general. The world will still need to invest significantly in fossil fuels for the very simple reason that fossil fuel production declines every day from existing sources. About 80% of our investments, the investments of the industry, 80 percent, eight-zero percent of the investment is to just stand still. So this is not to grow the energy system. This is to stand still. If we were not to invest in fossil fuels and oil and gas, particularly in oil and gas for let's say the next 35 years, we would have a shortfall of something like 80,000,000 barrels a day of oil. Now that investment still has to come. That is the investment that we do. That is the investment that we make money on. So the notion that all of a sudden oil and gas will not be needed anymore that we can somehow do without in a short period of time is just not the reality. Even under the most aggressive scenario that is actually not a scenario that is based on logic, but a scenario that says this is the International Energy Agency that says we will reduce the CO2 emission into the air to a maximum of 4 50 PBM. We don't know how we will get that, but suppose we will get there. The amount of investment that is going to be needed to just stay within that limit is still going to be massive. We are still going to fall short of 30,000,000 barrels a day of new production by 2,040. So the investment case in fossil fuels is a strong one and will remain. That is for the industry. Now over and above that, we as a company make sure that we are on the least carbon intensive side of the energy investment opportunity set as well. So we have very clear strategies where first of all we factor in a high carbon price in all our investments to make them a little bit more future proof than other investments could be. And we have very clear and deliberate strategies for each of our main businesses to make sure that they are lower carbon intensity than the rest of the sort of comparable asset groups. And we will continue that strategy to make sure that indeed we are as future proof as we can be as a fossil fuel company. And on top of that, of course, and I'm again happy to talk about it in a bit more detail when we talk about climate change in general, we continue to invest in opportunities to not be in fossil fuels, whether that is solar, which is a longer term opportunity or whether it is biofuels in which we are already the most leading company in the world or new business models around solar or wind all these things are being considered. And we aim and intend to be at the forefront of these investments as soon as and whenever these investments are economically viable. And we will make sure that they will become economically viable as well. So as an investment case, I think the issue is relatively sound. I'll be coming back on the carbon bubble later on because I think it's also a red herring and I'll talk about that a little bit later. Thank you. Just one follow-up. Thank you for that. Just one follow-up. Did I understand you right though as you talk about the investment in renewables, you said €150,000,000 or dollars of the R and D portfolio is devoted to renewables. Was that the number that was quoted? It is low carbon technology. So that includes carbon capture and storage as well for instance. Okay. And the amount of the total advertising budget for Shell globally is? It's less than that. It's way less than that. So moving towards a sustainable company in the world would mean quite a different investment strategy. Would you agree? Yes. Okay. Thank you very much for allowing me the chance. Thank you. And we'll move over to question point number 1. Okay. Wacker, Wacker. I'm Annemarie Scheke. I'm Dutch. I'm really Dutch from Amsterdam. And I'm an independent enterprise looking for the future with Fission. And I'm a proud Green shareholder of Shell since a month for the movement followed this. We will have the word I think he's standing there. That's my interruption. Vaca Vaca, I don't know if you know what these words mean, but that is shine bright and it is a really sustainable way to provide sustainable sun energy in Africa. And I want to bring this to your attention. I have some important and critical notes to make to you for the first time I'm here. And I was a little bit surprised the way you will receive your shareholder your real shareholder. But okay I start. There are exist different levels of consciousness as there are different levels of interest. There exists a higher level of interest to planet Earth, humanity and mankind than the interest of an international multinational fossil fuel oil and gas company like Shell is. The best choice and interest for Shell is in my opinion to make a transition to sustainable energy. I thank you for all the answers you've already given Mr. Van Burenen. But I only hope here the long term and I want you to stop the lobby against the sustainable energy that's really in. That's really point of attention. I'm aware that this is for oil and gas company Shell as I say it in Dutch for the people fluke in the Kerik. You are a company for oil and gas. That's it. And you're a great company. That's really true. But nevertheless, it's a matter of common sense to realize that your days are gone in this century. So it's better to listen to the international communities who if you read The Guardian well there are very critical articles about your company. Fossil fuel get too high to invest in materials to extract the oil and gas. The system will not work anymore hold by corruption, violence and intimidation. And I want to ask you to stop the lobby against sustainable energy to make it go stronger and quicker in the direction you want on the long term. And please don't stop that. That's my question. Just to fight it and better take your challenge to be to show leadership as a Royal Dutch Shell company, because now I feel it as an international shame and that's not what I want for Shell. Thank you very much for your comment, your analysis, your comment and your request. And I can assure you from the Board perspective that as a company, we welcome the increase of renewable the investment in the renewable, the emergence of new technologies in the renewable. We are investing as you just heard serious amounts of money looking at the future both in oil and gas where we are in as well as in the new renewable technologies. And I think our CEO has given us a number of comments examples on that. So Ben is there something you want to add? I would like to correct it Because I think we covered this quite a bit. Yes. I would like to just correct a very important misperception that you have, which is that we would be advocating against renewable energy. That's your opinion. That's well maybe and of course you are just a new shareholder in this. I would really then suggest that you pay a little bit more attention to what it is we're actually doing and saying. I've never and the company has never advocated against renewable energy. As a matter of fact, we are one of the largest investors in renewable energy. Okay. Thank you very much indeed. [SPEAKER KARL HENRIK SUNDSTROM:] Well, I hope you do. Thank you. Yes. Thank you very much. Move over to question point number 2. Good morning, Mr. Chairman, Mr. Van Burden. Thank you for this opportunity to talk to you. My name is Marc van Bijl. I'm the founder of Follow This. We are a movement of green shareholders in Shell. Our goal is a more sustainable world. Our goal is to make this world sustainable much quicker than we do right now. And we want Shell to take the lead in that. We think Shell can make a difference. We so as shareholders, we want you to move to sustainable energy. Mr. Bombardier, you've received hundreds of e mails in the last month of new and existing shareholders who encourage you to invest more in renewables. For the benefit of the other shareholders, I will read this e mail. It's very short. It says, Dear Ben or Dear Mr. Hubert, I hope you recognize the mail. Yes, yes. I've read them all, yes. Thank you. I believe you can change the world. As a shareholder in Shell, I want you to know that I expect the company to move in a new direction. I want Shell to change course and make the move to sustainable energy. I know you can make a difference and this is why I became shareholder. So you've received hundreds of these e mails. Today we're here. We hope other shareholders will join us. For example, ABP who are in dire straits, they can make a decision to support our case. But for the other shells, I want to make clear that we're not asking you to stop investing in producing oil and gas or that we're not asking you to stop producing oil and gas. We're not asking you to stop paying dividends. I would be lynched in this place I suppose. I wouldn't make it out alive. We're not asking you that. We're only asking you to recognize that you have to make as much profit as possible from your existing oil and gas fields right now. Enjoy them. Enjoy the profits. Enjoy it while you have it. But please invest these profits in renewables, the energy of this century and not in just more fossil fuels. I will give you one example. You're sending now in Armada to Alaska. You've spent for the other the fellow shareholders. Shell spent to date €7,000,000,000 for looking for oil in Alaska, euros 7,000,000,000 They will spend another €1,000,000,000 a year at least. Is that correct? Last year was €1,000,000,000 and we'll spend €1,000,000,000 a year to look for oil. This will only deliver money in 2,030 earliest. So Shell will spend 1,000,000,000 and 1,000,000,000 and 1,000,000,000 not making any profit from it. We suggest you would invest that in renewable energy. For example, send an Armada off ships not to Alaska, but to the North Sea and build a wind farm instead. So in short, our statement is, we want you to look at the future and say Shell will be a renewable energy company by 2,030. We as shareholders don't want you to be the next Kodak. Or Ms. Olela, we don't want shareholders to be the next Nokia. So let me come to our question. Given the fact that fossil fuels are getting more and more expensive to get out of the earth, it's more and more expensive. You have to go to the pools. You have to go to the deep sea. You have to go to sub salt etcetera. Given the fact that renewables are getting cheaper and cheaper by the day, Mr. Van Berde, Mr. Oleo, you're both engineers. You know technology gets cheaper and cheaper. And fossils are raw materials getting more expensive. Renewables are getting cheaper and cheaper because they have technology. So our question is please put the billions you have, the brains you have, ladies and gentlemen, the smartest guys in this theater are sitting on stage there. Shell hires the brightest students from universities. We want you to put your brains and brains behind it and make sure Shell will be a renewable energy company. And I will finalize with a quote from you Mr. Van Burden. You said in Shell Fenster, an organization that has so many qualities, so much expertise, so much capital has to be able to reinvent itself. So our question Mr. Van Buren, we believe that you can change the world by putting Shell's brains and billions behind renewables. We are long term shareholders and we want to prevent our shares to become worthless. Our question is, how can we help you? You have our support. You really have our support. Thank you very much. Your point was made very clear. And I think the state of the will of the company has been also made clear in responses to a number of the earlier questions. So Ben very briefly if you want something to add? Yes. Thank you very much and thanks for the many e mails that I've received of which I take note and they have all been personalized which I thought was quite nice as well better than the sometimes 20,000 e mails I get from Greenpeace supporters. But in this case, yes, we will indeed make our efforts to contribute to the transition in the energy system. That will be a long term transition and we want to be as I said at the forefront of it. I'm afraid it will not go as fast as you want if you also want to have your dividend safe for the next few years. Simply you characterized the issues in our industry quite well. Sometimes we have to invest 1,000,000 or 1,000,000,000 in exploration activities that may or may not result in oil fines. And if they do may or may not result in developments, but we are reasonably certain about the business model that follows from it. We are not so certain at this stage of the maturity of the business model in renewables. So quite often renewable investments make money by the grace of subsidies. And we do not think it is a sustainable position at this point in time to base the entire future of the company on state subsidies. The scale of our company, although it is a small company in the total energy system is very large, I cannot invest $35,000,000,000 a year in renewable energies and hope to pay $12,000,000,000 of dividends a year. Thank you. I really one comment. Let's let's have Simon Henry comment first. And then a very brief two sentence comment. If I may just to introduce a few numbers because the whole debate seems to assume we can switch overnight. We didn't ask you to switch overnight. Don on your own. Let me help just put this in context. Today $4,000,000,000 will be spent on the energy industry new investment and tomorrow and the day after and the day after, dollars 1,500,000,000,000 per year. At the moment $250,000,000,000 to $300,000,000,000 of that is going into renewables. We invest $37,000,000,000 last year $33,000,000,000 this year. That renewables investment in total, we talked about 1,000,000 barrels a day. So the total energy demand today is 250,000,000 barrels oil equivalent a day. It's growing towards around 400,000,000 the middle of this century. 80% of the 250,000,000 is fossil fuel, dollars 90,000,000 of it is oil, dollars 55,000,000 is gas, the rest is coal. The investment required in renewables at $300,000,000,000 a year and that's been around $250,000,000 $300,000,000 for the past 5 years or more is today producing less than basically less than 2,000,000 barrels a day oil equivalent, less than 1% of the world's total energy. Industry, the infrastructure, the numbers, they are just way too big to make a difference in a short period of time. We need to make choices as society about where we need to go and where that investment the R and D goes. But it isn't going to happen overnight just because this is so big. Thank you. Yes. Let me finalize that we have more confidence in you than you have in yourself apparently. We think you have the billions and brains to make this change not to follow it, but to really lead the change. So how can we help you start tomorrow? Do you need more shareholders? Yes. Thank you. I think the comment is that the transition will take more time than most of us would wish. Okay. See you next year. Absolutely. Thank you. Thank you very much. Next one, question point number 1. Good morning. My name is Charlie Kronack. I'm a shareholder. I also work for Greenpeace. So I'm sorry that the e mails have not been personal enough. I'll do my best to make sure that they get better in the future. I have a feeling, you won't be offering me a job either at the end of today. But I have a really, really specific question I'm sure the audience will be happy to hear. Your colleague Curtis Smith was recently quoted as saying that Shell have put in place an environmentally sensitive thoroughly responsible plan for exploration offshore Alaska and that Shell wouldn't 2012, Shell did move forward with something that proved to be very much less, notably in its refusal to test your containment zone and capping stack in operational environmental conditions in the Arctic. Now that was something that has been recommended by the U. S. National Resource Councils. And notwithstanding Mr. Van Beurden's comments that the CapExAC and Dome have been successfully tested this year. They have in fact of course been tested in the temperate waters off the coast of Washington State not in anything like the operational conditions. So my question is really a very specific one. Given that since 2012, you've had 3 years to test the that key bit of equipment, the capping stack and containment zone in Arctic conditions, why the company has so far refused to do so? Thank you for your question. And Ben from Werner. A very short and specific answer to it is that testing that we have done of the Arctic containment system, we think is fully representative for the conditions that we will encounter in the Arctic. Well, it's if you allow me just to start with such a brief question. A quick second question. But considering the fact that the claim for the capacity to contain the oil to a level of 95% in conditions that are literally unprecedented according to U. S. Government commissioned research. It's hard to see how testing in non ice covered in fact waters that never see ice could give you the confidence that that's the case. Well, again, there's not much more to add other than that it's a test that we think is representative. Bear in mind, of course, that when we will be in our drilling campaign this summer, there will not be ice in the Arctic either. Otherwise, we will simply not be there. Well, there was the last time you were there. But anyway, thank you very much. Thank you. Thank you very much. We continue on question number 1. Good morning or good afternoon by now I guess. My name is Sebastian Bach. I'm a proxy for Liza Nathan. And I have a question on the Arctic as well on contractors and contractor oversight. So something that was mentioned in the presentation earlier and you promised us some further insights and some details on that. So I'm looking forward very much to hearing that. So in March 2013, the reports into Shell's well, let's say, mishap prone 2012 operations in the U. S. Arctic Oceans. The U. S. Department of the Interior recommended that Shell would be required to commission a 3rd party audit of its management systems, including the safety and environmental management systems. Then a little later in March 2014, it was confirmed that Endeavour management would undertake this audit. Since then, it appears that no detailed information has been disclosed publicly on the terms of reference for this audit, its progress or even its findings. So Shell's representatives have repeatedly stated that the company has learned its lessons from the systematic failures in its management systems in 2012. So in order to reassure us, shareholders here that your actions actually do match your words, will Shell commit to publishing, a, the terms of reference given to Endeavour? Also the full audit that Endeavour has produced? And finally, detailed information on the changes that Shell has made to implement any recommendations made? And if not, could you explain why shareholders stakeholders should rely only your reassurances about the company's ability to operate without incident in the offshore Arctic, given that in 2012, the then CEO was equally confident, but ultimately mistaken so to say in Shell's ability to do so? Thank you very much. Thank you very much. And Ben van Berden will respond. Yes. I think indeed we had a few issues in 2012 from which we had to learn. There's no denying that. Let me also be clear that none of the issues that spent on had anything to do with drilling or the reservoir as such. But nevertheless, it showed how unforgiving the logistics operation in the Arctic can be and we had to indeed improve our systems. What we have done is quite a few things, not just an audit. We have as a matter of fact significantly improved our activity planning. It's a very, very complex operation to undertake. We undertake that operation as I'm sure people will have noticed out of Seattle. From Seattle to the Chukchi is the same as going from Rotterdam to New York. So try to imagine that sort of supply chain and the issues to do with it. And we had to indeed improve in quite a few areas, contractor management being one of them. We have strengthened the entire Arctic organization to need had to need to do with towing and other marine operations. We have been very clear that we cannot go in a stop and go approach on funding. So we have continued to fund this entire operation, the entire fleet of ships and helicopters and everything else that we need logistically in the entire period that we paused just to make sure that we did not have to remobilize whenever we would decide to go ahead again. We've upgraded the fleet quite significantly. We have modified the Discoverer with some of the addressing some of the shortcomings. We have, course not been using the Kallak anymore. It has been scrapped and we have replaced it with a Polar Pioneer which by the way has been modified and upgraded as well. We've added new vessels, new tow vessels, another anchor handler, a bigger supply ship. So a lot of things have happened. And on top of it, yes, we have audited and verified all of this to see whether it works. We've tested as was mentioned earlier on by the gentleman from Greenpeace, the Agli Containment System and all of that in complete transparency with a regulator who is supposed to oversee us in that matter. We have been very, very clear. We have not withheld any information. We have shared that very openly. And in that sense, I think we have fulfilled all the obligations that we have. And of course, we have with much of the input that we have received learned an awful lot on how to be better prepared for this season. I think at this point in time, we are getting confident that we are prepared and that we are ready for this season. There's a few more things that need to happen. But on the basis of that, we will be moving forward. I do not see the need to disclose all the bits and pieces of all the things that we have been doing. I do not think it will help or add or make us better or do anything else. For that, of course, we also have regulators to overseas in that regard. Thank you very much. Can we now have all the questions put together from relating to Arctic Alaska. So anybody so we move over to question point number 2 for the next Arctic question. My name is Louise Rouse and I'm a shareholder. I came last year and asked a question about contractor oversight and it's a similar topic this year. I want to refer to the document entitled Shell's Supplier Principles from 2011. This states that Shell will develop and strengthen relationships with contractors and suppliers who are committed to the principles set out in that document. Principle 1 is entitled Business Integrity and it states, contractors and suppliers comply with all applicable laws and regulations. On the 8th December 2014, Nobel Drilling, a subsidiary of Nobel Corporation and the operator of 1 of Shell's Arctic drilling rigs, the Nobel Discoverer, pleaded guilty to 8 criminal offenses relating to its operation of the Nobel Discoverer in 2012 and agreed to a fine of $12,200,000 Those felony offenses included the falsification of records, unauthorized alterations to essential equipment and willfully failing to notify the U. S. Coast Guard of hazardous conditions aboard the drillship, Nobel Discoverer. However, despite these very serious criminal acts, despite the wording of supplier principles, Nobel has retained its highly lucrative contracts with Shell, including for the offshore Arctic. This would appear to demonstrate a failure by Shell to match its actions to its word contained in Shell's supplier principles. So why has Shell retained Nobel as a contractor for its most highly scrutinized project in one of the most fragile and globally significant regions in the world. What precise changes have been made to Shell's oversight of Nobel Drilling to ensure it meets the rather minimum requirement of obeying the law. And just on that point, in response to the ANTUDA regulators, the regulatory requirement is met once your 3rd party audit is delivered to them. There is no requirement on them to oversee the adequacy of that audit or there's no indication in any of the correspondence with the regulator that they will check whether that audit is adequate. In the interest of the transparency that has been much trumpeted here in light of the fact that the failings of contractors only came to light not because it was disclosed by Shell. In its 2012 annual report, the word contractor was not mentioned. It only came to light when on the same day on the 8th March 2013, the Department of the Interior disclosed to the world what a shambles your management systems were, it is incumbent upon you to publicly disclose both the terms of reference and that audit so that those same stakeholders who have to rely on 3rd party disclosures can actually find out if you have learned the lessons you claim to have? Thank you. Thank you for your question. So Ben, obviously. Yes. Thanks for the comment. And again, it's we will let me be very clear. We'll take that comment into consideration. I'll look into that request and see what would be appropriate and sort of practical in that sense as well. Yes, we are very clear indeed that we not only ourselves adhere to the law, but we also expect our contractors to do so. And if not, we will have indeed serious conversations with our contractors up to indeed termination of agreements. I will not go into the details of the discussions that we've had with Noble on this, but I can assure you that they have been very clear, very firm and expectations very clearly set. There's of course also limited set of contractors with which you can work in some of these operations. The commitment of our contractor community in this is strong and is personally tested by the person who heads up this effort, a lady by the name of Anne Piccard, who is a very, very professional, very strong leader, who has a very, very strong personal relationships with all the CEOs of the contractors that we work with on this. And everybody is very, very clear in their minds and very, very clear as a result of this communication what we expect from them and what the consequences will be of not complying with requirements that are very clearly spelled out. In that sense, I have no hesitation to say that the expectations that we have placed on our contractors are very clear, are very well understood and have every intention of complying with the letter and the spirit of them. Thank you. Thank you very much indeed. Thank you. And then the next question on the Arctic, so as to complete the topic. Yes. I greet you and my name is Akuaq Mayhink. I'm here for my second time in 2 years. And first time I came, I had question whether Shell would have the obligation of bringing in food annually in the event of a major spill. The catastrophe would impact us. I am from the Arctic. I am I live in the Chukchi Sea. So we still subsist on our traditional food annually. Year round, my community is surrounded by the ocean on the north, west and south, and we do rely on our food from the ocean, the majority of our food. And I had a question whether Shell would take the responsibility of providing food annually to the communities for the next 50 generations. 2 years ago, that was my comment. And I still have that question now. And the impact that shale has on our community will be really, really bad because the chance that the federal agencies in the United States commented that 75% chance of an oil spill is what will occur. That is the chance that they're taking is they're expecting a 75% chance of an oil spill in the Chukchi Sea. Why would Shell shareholders want to risk drilling out there if that's the percentage very, very high percentage of an oil spill occurring if shale is out there drilling and producing. My children eat the food we get out of the ocean. My grandchildren, I am a grandmother of 17 grandkids and every one of them love to eat our traditional food. And that they're so afraid right now that with a 75% chance that they'll never be able to eat our traditional food again. Are you willing to risk all your financial status, your gains by going with that 75% chance of an oil spill out there in the Chukchi Sea, where I live and I'll continue to live there, whether you come back or not? Thank you for your question. And Ben will respond. Thank you very much for that question. And of course, we completely share the concern of oil spills in the Arctic or as a matter of fact in any of our operations. I've heard that 75% number as well. Let me respond to that first. I think actually that is a percentage that is taking out of context. The likelihood of a spill occurring is actually much, much, much smaller, much less than a fraction of a percent. And actually the Bureau of Ocean Energy Management admits that themselves as well. So I'm not sure how that 75% has been taken out of context, but it is taken out of context. So let me give you a few other statistics to perhaps provide you a bit comfort. Although they are statistics, They are therefore not necessarily commitment. It's at the moment, we have looked at 41,000 wells being drilled in the Arctic in the Continental Shelf. And there has not been a single large spill emanating from that. So statistically, this doesn't quite bear out. But at the same time, it's and I'm happy to talk a little bit more about the opportunities in the Arctic as well. We are very, very mindful that even though we see a huge opportunity for us our shareholders including yourself there as well, we also understand that huge opportunities come with huge obligations. And therefore, we've gone through tremendous lengths to make sure that we understand the risks and that we manage these risks down to levels that we think are acceptable and are indeed negligible. The amount of effort that have been put into it, the multiple layers of defense that we have are unprecedented. Nowhere ever in the industry have there been so much precautionary measures to make sure that first of all a spill will not and cannot happen. And secondly, a lot of measures have been put in place and are on standby to deal with the very, very unlikely event that a spill were to occur. The amount of equipment that we have, the response capability that we have, we can respond in the events, a very unlikely event of a spill within an hour, yes, is unprecedented. And we hope and expect never ever to use any of that equipment that we will have in theater in this period in the summer when we drill. So I think this is the way we have to approach it. We have to approach it from what is responsible, how can we make sure that our operations have a negligible likelihood of affecting the your likelihood in the negative way that you just described. I'd like to think of ourselves, I'd like to think of myself as a responsible company and a responsible person as we all have the leadership of this company and we will do everything that is needed before we will tell ourselves that we are ready and able to proceed with the drilling campaign this summer. Well, after the 2012 incident, it is very hard to trust. And there's a trust issue with us now. Thank you. Thank you. I would simply remind that there were no oil spills in 2012. It was all about some of those incidents which were very unfortunate were relating to the logistics as earlier noted. So thank you very much. And next is there a question on Arctic? Can you please be brief, because we are running out of time and not only exceeding lunchtime, but approaching dinner very soon unless all of you will be brief. I'm Faith Gimmel. I'm from Arctic Village, Alaska. And I'm here to let you all know I just came from Seattle, where there were hundreds of kayaks that went out on the water by the polar pioneer to show that the people of that state are not happy that this rig is moving north. And it's because of the same concerns that were raised that there will there is a predicted 75% chance of an oil spill. And it's not if an oil spill happens, it's when it happens that we have to be concerned about in the Arctic. As an Alaska Native, I'm concerned about that because what affects the Inupiat communities affects all other Alaska Native communities. We live the same way. We share our foods. And our food security is at risk, not only from further fossil fuel development, but also climate change. My question is very simple. I was down in the Gulf region. I was with indigenous communities when the BP, Deepwater Horizon oil spill started hitting the marshes. And the communities there live from the waters just as the Inupiat communities live from the waters. And I saw the tears of those leaders of those indigenous communities as they realize their way of life was going to be lost for years. My question is, when that happens, is the Board how is this Board going to be accountable to shareholders? Because the financial risk may is so huge and enormous that there will be serious consequences in the form of 1,000,000,000 of dollars in fines that you need to be accountable to your shareholders for if that happens in the Arctic. The other thing I wanted to say is just the same question. Well, as far as the Deepwater Horizon spill, that was in warm temperate waters where infrastructure was actually in place to respond. And we've seen an ecosystem pretty much devastated. And in the Arctic, there is no infrastructure in place. We have broken ice conditions. How can you clean up oil under broken ice and in those harsh conditions of the Arctic? Thank you for your question. I think Ben will respond. Yes. Thank you for your question and your comments and concerns. It without wanting to widen the discussion on risk, but it's we are an industry that of course has to deal with the risk in operations because we deal with products that are inherently hazardous because they indeed can pollute, they can explode, they can burn. That's the nature of our product unfortunately. We are very, very mindful of that and we have over the years of course invested tremendously in management systems practices, techniques, management techniques, technical installations and everything else to deal with risks. As I said, the Arctic is maybe a special case, because it is indeed as you quite rightly point out a more fragile environment. It is an environment that is hostile in the sense that it's further away from ports and infrastructure to deal with unforeseen circumstances. And therefore, we have to go to extra length to do that. We have to take everything with us. We have to be extra careful. We have to take extra margins in our design. And we have to make sure that we have an even lower tolerance for risk than we would otherwise have. There is also a mitigating effect in the Arctic which is that it's not deepwater. It is 30 meters deep, so it's sort of like North Sea. And the reservoir is not high pressure. It is actually from a geological reservoir management and drilling perspective, it is actually a relatively benign and relatively easy operation. But I do not want to underplay the complexity of getting it right. I have to repeat what I've said before. It's your point is very well made and it has not been lost on me that if anything were to go wrong in any of our operations the Board and me as the Chief Executive will be held accountable by others. So therefore, we have to be very clear and convinced of the readiness that we have and the risks that we embark on and the rewards that are associated with it before we embark on it. I think we are doing that and I think we have done that. This is also the reason by the way why we had to pause the program to reassess our readiness and our preparedness for it. And I think we are now getting at a point where we believe we are ready for this season. There's one other point that I would like to make though. I would like to emphasize that a lot of people believe that what is going to happen this season is that we are going produce oil there. That is not at all the case. What we are going to do this season is to ascertain whether that's oil in the 1st place. We probably need 2 years to find out whether there is oil and indeed whether there is enough oil. If there is no oil there is no development. If there is oil in sufficient quantities, we will have to understand how we are going to develop this. That will be a multiyear process, which I'm sure there will be plenty of oversight scrutiny, a lot of discussion, a lot of discovery also from our side, how we can do that responsibly. And we will only proceed with the real development of anything offshore Alaska, if again we can find that we can do it responsibly, ecologically sensibly and indeed commercially sensibly as well that decision is probably many years about a decade away. Yes. Thank you, Ben. And simply to reiterate from the point of view of the Board, we I can only reflect that we have considered all the risks. We have worked extremely hard to make sure that we have covered all the issues. It seems that we are double trouble covered in most of the cases. We feel we are ready to move to the drilling to do the phase of exploration as Ben described. It will take a bit of time to establish what is the amount of oil and what is the extent of hydrocarbons there. We know from seismic that there is a significant amount of hydrocarbons. Now it's the exploration phase to establish exactly the reservoirs. And the Board is fully aware Board is fully aware of the responsibilities that we have here. Can I just I think we have covered I think we have covered I think we have covered Traditional ecological knowledge of the peoples of that region who have been there for 1,000 of years says that it cannot be done safely and it's not worth the risk? I think you're making a very bad decision, and you will pay a very fair price as will the people of that area? Thank you. Yes. Thank you. Before you go, I think I would just reiterate having visited Alaska twice and talked to very many quarters of the society not only in Anchorage, but a lot of people on the northern slope and by the Chukchi Sea, I have had very many different comments and that is that also plays a role as I'm sure you are aware. Next question please. Questions on Alaska or Arctic? My name is Josje Pfenz and I'm a shareholder. And my question is about the events in Seattle. One of the lessons from Shell's failed 2012 Arctic season was that the company and its contractors often did not fully appreciate various risks in its operations. Shell assures us that the company has learned these lessons. This AGM comes after several days of local protests in Seattle against Shell's use of Seattle's port. The mayor of Seattle has declared Shell's permit invalid. If the major decision is upheld, Shell will face delays and additional costs in moving its rigs again. The situation is in the focus of widespread media coverage, including Fox News and The New York Times, adding to the already intense scrutiny of Shell's Arctic operations. Shell's decision to proceed to Seattle despite a request made by the board not to do so suggests a disregard of the wishes of the people of Seattle and risks increasing local opposition. Can we have a question please? Yes, I'm coming to that. So despite Shell's assurances, it appears that yet again 3 years on Shell either Shell or its contractor, Frost Marathon, failed to properly assess the risks posed by local civil and political opposition to its plans. In light of current events, do you accept that it was a mistake not to conduct more stakeholder outreach in Seattle during the several months in which the lease was being negotiated? Thank you for the questions. So Ben? Yes. Let me make a few general comments on Alaska and then focus in on Seattle first. It I think it's fair to say that, of course, there's a lot of opposition against drilling in Alaska or any operations in the Arctic in general. And there's 2 main reasons that I discern for people why they are against it. First of all, people are legitimately concerned about the risks that are associated with any oil and gas operations or any significant industrial operations in the Arctic. And we've heard quite a few comments of that already today. It is a delicate environment and there's no denying that and in many areas a pristine environment. And of course, there's many people out there also who link this to climate change and who of course are concerned about climate change rightly so know that climate change has a link to fossil fuel consumption and indeed know that climate change has a disproportionate impact on the Arctic. And somehow that link even though Arctic oil may actually be a low carbon footprint oil will actually not gel in their mind come what may. Now I've come to accept that people who have that logic, which I respect and understand, no amount of arguing, no amount of assurance, no amount of logic for that matter will change the argument. We just have to respect that we have different views there that it will be unpalatable for that segment of society that there is operations in the Arctic and that's the end of it. This is not nothing to do with risk. This is just somehow unacceptable that Arctic operations in the Arctic where of course the effects of climate change are so significant. I get that view and I think we just have to take it for what it is. Many of the oppositions of course that we are seeing in Seattle are along that line. Anything to do of course with the real concerns of risks of operations in the Iliq we address. And we are happy to address that. We're happy to talk about it. We're happy to reassure. We are actually also doing what I believe is unprecedented and over and above requirements that a regulator would set. And we do that because we think it is the right thing to do. And if we believe that we have lessons to learn, we are the first ones to learn from it as we have learned lessons from the 2012 season even though it had nothing to do with drilling as such. Now getting back to Seattle. Now of course a lot of the protest, a lot of the objection against the campaign has to do with the unpalatable view that this is an Arctic campaign and therefore is linked to climate change. Again, no amount of outreach will in my mind solve that. Let me also say that the position that the major mayor has taken actually is not a position that is shared by many stakeholders in the game. The contract that we have with FOSS, the maritime contractor that we have there, the lease that they have at Terminal 5, we think they are just valid legally valid. And we have indeed tested that and we are ready to move ahead with putting the polar pioneer there, loading it out so that it's ready for its journey to Alaska. And we have not seen apart from the protest any real sort of legal obstacle for us to do that. So we I think we are just acting within the legal rights that we have. And we are again prepared to talk about all the risks in the Arctic and how we address them. But we're also very mindful that there will be a segment of society out there that will always protest to anything we do in the Arctic. We respect that. We listen to it to see whether there's new news in it for us to consider. But we also accept that we're not going to be able to sit down with everybody on the planet to convince them that logically this is a sensible thing to do. And that's just the way it is. Can I ask one? Very quickly, please. Yes. Are you saying that Arctic oil and climate change are not connected at all? I thought it just said the opposite. Well, let me be very clear. I know this is a difficult argument to get right. But Arctic oil being consumed in places around the world will have no different effect than any other oil from any other part of the world. In that sense, oil doesn't have a memory where it came from and will somehow address its CO2 emissions specifically to its origins. As a matter of fact, as I said, if you look at the carbon intensity of an Alaskan oil tanker under certain assumptions of how much oil there is and how we will develop it, this will probably be oil with one of the lowest carbon footprints on the planet. I know it's objectionable for in the minds of many that it comes from the Arctic. And that is an argument that we cannot change or address. But the logic is a different story. Thank you. Okay. Thank you very much, Ben. And then the next question on Arctic is that question point number 1. Yes. Welcome back. Good afternoon. My name is Faiza Orlsson. I'm from Greenpeace. And this question will not be about our differences, but rather about numbers in the oil spill response plan relating to Alaska. So certainly in 2014, the U. S. Government commissioned a report saying that traditional oil spill response tactics would be impossible to apply effectively in Arctic conditions. Now in this context, it is concerning that if you look at the oil spill response plan of your company, it's based on the assumption that it's possible to recover 95% in an occurrence of a major oil spill. Rates we have not seen at Deepwater Horizon or Exxon followed. Now despite the repeated use of the word recovery in the spill response plan, spokesperson Shell spokesperson Curtis Smith in 2012 claimed that Shell never will never make claims about the percent we could actually recover because conditions vary of course. So there's a clear disconnect within the oil spill response plan and what Shell's spokesman Curtis Smith has been saying. Leading to my question, can you confirm Shell's estimate of the amount of oil it would recover offshore in the event of a worst case discharge? And if it is 95%, why does Shell think that it will capture a significantly higher percentage with mechanical recovery than was the case with Exxon Valdez or Deepwater Horizon? Thank you very much and welcome back. I remember you from last year as well. I'm not familiar with the percentage in the report that you mentioned. So maybe we'll have to follow that up separately. But there are of course fundamental differences to what happened with the Exxon Valdez and with the deepwater oil spill in the Gulf of Mexico. Of course, the Exxon Valdez was a cargo ship that had a major leak and this discharged its oil in an area where indeed there was at that point in time no readiness or response to it. I think the Deepwater Horizon was a different type of incident here as well. What we are doing here is making sure that we have containment equipment ready on the spot to be deployed immediately when indeed a spill happens. So it is a matter of if indeed a spill were to happen and let me repeat again, this is going to be an incredibly low probability of it ever happening. Then indeed we have multiple lines of defense including capturing it at the well that is being breached and thereby indeed significantly improving the percentages of recovery. What actually then comes into the environment will have to be mechanically covered for which we have readiness as well in terms of ships and booms and everything else too. What it exactly leads to in percentages of recovery and what we have said before, If you don't if you will forgive me, I will pause on that because I do not have all these facts to hand at this point in time. We'll be happy to follow it up though with you separately. Thank you. Okay. Thank you very much indeed. There was one lady who's raised the hand sitting okay. If not, we move over to question point number 2. My name is Barry Stead and I have been shareholder of our company for several years. I want to raise a rather more modest topic than the strategic questions that have been directed to you. But I hope in turn, they will be capable of a short and I hope even more an affirmative answer. 1 of my continuing concerns as a shareholder in any company is that the dividends I receive are not dependent upon the people working for that company being paid less than they need to live on without falling into debt or having to work excessive hours because that seems to be very unfair. And I'm sure that feeling is shared by all the shareholders in this room. I'm referring to the necessity to pay all staff at least the living wage, which is independently assessed as what is necessary for a family to meet the basic necessities of life. I'm delighted that in 2011, our company confirmed that all workers contracted or directly employed are paid at least the living wage. But those figures have of the living wage have gone up over the last 4 years and they are now €7.85 per hour in the U. K. For the country and €9.15 in London. And my question is to ask whether our company is still managing to meet those minimum for all the people working for us. And the second supplementary question, when our company's reputation has been under attack a little bit today and generally whether we might not get a quick win by becoming an accredited living wage employer like other companies do, where they get the kudos and the reputation or support for having achieved that status, why don't we go for it? Thank you. Thank you very much for your question. Thank you very much for your question and comments. To the best of my knowledge, we do indeed pay the minimum wage everywhere. The lifting wage not the minimum. Okay. Then I must apologize that I may not be 100% familiar with your definition of the living wage, but my British colleague here is. So he can take care of it. Thank you, Mr. Stad for the question. Believe me, I can assure you that our employees earn considerably more than the living wage. They are in the U. K, in particular, mostly technical professionals, graduates. And I would suggest it is a significant multiple, dollars 16,000,000,000 salary costs over the year, 100,000 employees roughly, dollars 160,000 a year total salary remuneration cost on average globally. Those are the figures that Ben gave earlier. So I think that you need to have no fears on that account. Well, there were 2 points. One is that I referred to contracted staff. They're not the technical staff. They're the people who do equally important work like cleaning our offices, the security staff and the catering staff. And it's they need the same amount of money as other people do. And I hope you can confirm they've received a living wage. And the second part of my question is why don't you go for accreditation as a living wage employer? You've done it. Why not get the kudos? On the suppliers and contractors, we have maybe 400,000 or so a day roughly around the world. And again our expectation in the supply principles which we referred to earlier would be that we would meet the standards that you aspire to. And we do order our suppliers around the world to ensure that that is the case. I can't give you specific details for the U. K. On that. And I take your point on seeking accreditation. I honestly don't know if we've tried to do that in the U. K. But thank you for the suggestion. Thank you. Thank you very much. Then back to question point number 1. Thank you. Hello. My name is Juliet Phillips and I'm a shareholder. I have a question concerning Shell's approach to corporate lobbying, looking at the consistency of your public policy position. On the surface, it seems Shell recognizes the steps necessary for building a low carbon economy. On your website, Chief Climate Change Advisor, David Hone highlights the need for a strong carbon price and the essential roles of renewables. This has been echoed in keynote speeches by the CEO your annual report and today. I commend these sentiments as they align with the scientifically proven need for urgent action. However, it appears that Shell has simultaneously been funding individuals and groups that have lobbied against progressive policies in both of these areas. A recent story in a major international newspaper suggested that Shell had lobbied to have binding renewable energy and energy efficiency targets reduced in the EU. However, I appreciate you've already suggested today that you've never advocated against renewables. So some clarity on that story might be helpful. Nonetheless, there's a additional example of your membership of EU Trade Associations, including Business Europe, SEFC, Fuel Europe and OPG, which seems inconsistent with your call for a strong carbon price. A recent report from the Policy Studies Institute shows that these groups have lobbied against reforms to the EU emissions trading system and the 2,030 framework for climate and energy policies, which must have encouraged a strong carbon price which you claim is important. So in light of these and with regards to EU Trade Associations I've just mentioned, could the Board please clarify whether you support their positions on climate change? If you do not, would you consider making a public statement shelf from these organizations? Or indeed would you consider withdrawing membership? Thank you for your comment and your question. Sir, Ben? Thank you for that. It yes, there's a few very important points there. Let me take the opportunity to clarify a few other points as well. Indeed, we do advocate for a strong carbon price, much stronger than what we have today. And we are working very hard to make that a very, very clear and also very public statement hopefully also the next days or weeks to come. So I have no hesitation there to be very, very public and on the record that we support and like a strong carbon price. We think it is a very effective way to deal with some of the challenges we have in climate change. We think as a matter of fact a very strong carbon price is a more sensible thing to have than mandates on renewables. Mandate that's not because we are against renewables, but we are pro market mechanisms to achieve certain outcomes. What we have seen with mandates on renewables like for instance in Europe is that as a matter of fact it has resulted in increasing CO2 emissions. So in that sense mandates which are somehow trying to pick winners or give subsidies have a distorting effect that sometimes do not achieve the intended outcome. And that is the reason why we have probably a different or what I would like to think a smarter efficacy, which still has the same thing in mind, decarbonizing the energy system. Now we indeed do participate in trades organizations that advocate on all sorts of things sensible policies etcetera. And invariably we find ourselves including in places like Sapphic where I've been personally a member of the Executive Committee as well in positions where we cannot agree to everything that that association believes in or that its members agree in a bit. So quite often we find ourselves indeed being the only ones in this particular case SEFC and reform of the ETS, the only ones or with a very, very few people advocating for change where the other 98 percent of the entity is advocating for something else or cannot agree with it. Now you have to make up your mind then. Do you just say, well hold on, we cannot agree, so we will step out of it? Or do you publicly distance yourself? Or do you have a different efficacy, which in the case of Cetik and carbon pricing we have done. We have separately advocated directly in Brussels for set asides and for taking allowances out of the market. Does that mean that you then better step out of these associations and do not associate yourself with it? Well, it depends. If this association is all about very narrow efficacy that we cannot agree with, yes, we step out of it. We've done that in quite a few occasions. If it is a very broad efficacy effort where we agree with many aspects, but disagree with some, well we make our disagreement known. And quite often we are able to change and reform the thinking from inside. And if we cannot, we will have a separate stream of efficacy quite often very publicly as well. And that's the way I'd like to approach it. Thank you very much. I think that's quite clear the way we are operating. And certainly, you can see that happening on a daily basis. Next question please. Good afternoon. My name is James Marriott. I'm from Platform, but I'm here on behalf of colleagues in Nigeria to ask questions that they would like to put, but they were unable to attend. As you all understand, it's very difficult. It's often very challenging for them to get here because of visas as well as travel questions. I first attended the Shell AGM 20 years ago in 1995. And at that point, Ken Taro Iwo was still alive. He was still his voice was not silenced. And the question that he put to the board is very similar to the question that I would put now, which is why is it that Shell does not apply the same standards in Nigeria that it would apply in the Netherlands. I was extremely moved by the statement by Nicoletta Morey from Groningen earlier. And she said some very interesting things. And I was moved also by what you said van den Wooten in response to her. Let me just repeat that. She said you said that there was a fundamental right of people to live in safety in their own home. And you said that's indeed why we have homes so that we can be in a safe place. You also said about Groningen that all damage will be repaired and we will do this because it's not only legally, but also morally important. You said that there's a dedicated committee on the board to look at this question and they're determined to address the question. And you will be very transparent in every undertaking that you do. Because you said, it's the level of not knowing what's going to happen that causes people the fear that they experience in Groningen. Now last year I came to you and asked you about the question of where you're going to back the UN Development Program, the UNDP cleanup plan in Ogoniland. And we were very glad that you said, yes, you're going to put $1,000,000,000 aside and begin that process. And indeed it seemed to begin with that that process had begun. Now it seems to have stalled. And we're very and when I say we, I mean my colleagues in Nigeria are very concerned that that's stalled. Of course, it's been a volatile situation around the elections, but we want to see that process going forward. And the second thing is so my first question on that is why has that not going forward? Why is it not going forward? And when will we see the evidence that it's going forward? The second point is this, which is your as the slide that you showed, you showed sales of onshore blocks. And there's a block which is which covers the majority of Ogoniland. One single block covers the majority of Ogoniland. And our colleagues in Nigeria claim that this is going to be sold to Bolima Oil. Now the biggest concern we have is that that area, which let me remind you, covers an area similar to the whole delta between the Hain and the Maas between the Hoek of Holland and Wissingen, Wissingen it's a very big space. And this whole area is dominated by air pollution and oil pollution that has been produced through the production of oil there since the late 50s, since you were born since before I was born. What is happening to that block? They want to know what's going to be happening in their block, because the situation at the moment is extremely untransparent. It is extremely untransparent what's happening with the sale and also what are the liabilities. You said in response to the question from the lady from Groningen about the degree to which you would carry on those responsibilities after a sale even if you sold out of Nam for example you would have responsibilities after that. What is your responsibility in relation to cleanup in Nigeria even if this sale goes through? The people in the communities that we work with they need that clarity because if you don't give them that clarity they are forced to live in exactly the situation you described which is the insecurity of the level of not knowing what is coming. Okay. Two questions is that? Those are the two questions. Very good. Why is the situation not being moved forward? And secondly, what is happening in relation to that particular block? Just mindful of time. Thank you very much. That is clear. Thank you. Ben? Thank you very much for your questions and your evident concern around Nigeria, which I by the way completely share. I continue to go to Nigeria regularly also to understand personally what is happening there. Yes. Why are we not moving forward in with the big cleanup in Ogoniland as was recommended suggested and we also support as a result of the UNEP report that was written. That basically is down to the federal government of Nigeria not fulfilling their part of the commitment to put in place the infrastructure that will allow us to disburse $1,000,000,000 I hope you will understand that we're not going to just distribute $1,000,000,000 in Ogoniland in the hope that somehow that will automatically clean up the situation that we have there. There are very clear agreements about what it is that we have to do or rather SBDC has to do and what it is that the Nigerian government has to do in order to make sure that there's a framework in place for this cleanup to happen. We have fulfilled all our commitments on our part as we're actually going beyond that. And I still 100% stand firm with the commitment to work with the Federal Government of Nigeria to disperse the $1,000,000,000 and to clean up the situation that has been there for many, many decades. We have not operated in Ogoniland as you know since 1993. Now there is a specific area and I'm not sure whether you're also referring to that which is in Bodo where there was or is that yes, I'm happy to cover that as well. That of course has been stuck in a very, very long very difficult litigation process where we were not able and not allowed to go in to clean up. That fortunately has been settled. That was long overdue. We're very happy that that is settled. We have now awarded contracts to 2 international contractors who will go in and clean and that will start in July probably of this year. That was also an earlier comment that I made to an earlier question. So there is a very, very clear intent and commitment, a standing commitment to move forward with the obligations that we have. There is at this point in time, there is no plan to sell the blocks that you were mentioning. The blocks that we have sold are all blocks in the swamp in the around the number Creek trunk line where indeed tree blocks in the trunk line themselves have been sold by now. Okay. Can you just I'd like you to be able to do something which can give confidence as you said you wanted to do in Groningen to the people in Nagoni land precisely on your point that you're not going to sell it. There's no desire to sell it at this time. Can you provide some detailed and structured material that can provide confidence? Because currently everybody there thinks that it's on the blocks to sell. We will not make that we do it not because it's Nigeria. We will never make any comments on the long term outlook of our portfolio. I'm not going to make an exception here. We're very, very clear about the commitment that we have and the way we intend to follow that up. Okay. Thank you. Then over to the next question on point number 1. Mr. Chairman, I'm Fred Heinemann. I'm a private shareholder living in The Hague. There has been a lot of discussion before about the negative impacts of the bidding of natural gas in Groningen. But there is another country which produces huge amounts of natural gas and it's Algeria. That happens in the middle of the desert, so the area is more or less uninhabited. However, the winning of natural gas in Algeria never has resulted into an earthquake stronger than scale grade 4 on the scale of Richter. Also the closing of the Dutch coal mines in Limburg which happened already in 1975 also never have resulted in a stronger earthquake than scale 4 on the Great of Richter in spite of the fact that the holes driven in the earth never have been filled up with debris and stones. My question is, does Shell come to the same opinion and the same results as me? That's the first question. The second question relates to the winning of minerals in Sakhalin. The geopolitical troubles of the last year between Russia and the rest about Ukraine have resulted in a souring of the relations. My question is, is it still do you still have a good cooperation with Gazprom? And are you still making progress and making a profit on this also very huge progress project. My last question relates to the winning of oil from the Sand oil fields in Alberta in Canada, I have read that an oil price lower than $75 will make them unprofitable. So the oil price has been for a couple of months below U. S. Dollar $75 a barrel perhaps it will improve, but nobody knows. So have the activities over there been mitigated and put on a low scale? Those are my 3 questions. Thank you. Thank you for your three questions. And Ben will Thank you very much, Mr. Heinemann. Yes, I think the situation in cloning is actually quite different compared with the situation as you mentioned in Algeria or even in Limburg. It is not so much the earthquakes and the magnitude on the Richter scale that causes it. It is also to do with the nature and the quality of the overburden and the fact that it will cause a higher acceleration in a clay type of environment than in a rocky environment. So it is very hard to compare one with the other. And therefore it's not so much the Richter scale, but the horizontal acceleration if I can be a little bit more technical that will cause this difference. We are and it's one of the commitments of course that we already have. And in response to the OVP report that we will continue to invest in understanding how these earthquake mechanisms work. And of course, this is not just done by us. We do this with very well renowned international institutes that specialize in earthquakes. So we have a lot of focus on understanding what is really happening there. You're quite right indeed that also there we haven't seen earthquakes above that magnitude. But again as I said it's not just a Richter scale. In Safalin, yes, the relationships between Russia and the rest of the world, very well advertised and not always easy. The relationships we have with Gazprom on a commercial and investor type level are strong. We continue our operations in Sakhalin. Our operations in Sakhalin have not been affected by the sanctions. The sanctions were also not designed to affect these operations. And therefore, we have no negative effect so to speak in our current operations. We are still looking and hoping to extend that operation in the longer run. But as you can imagine, of course, there is a lot of focus within Russia at this point in time also on how to deal with sanctions in general. And in that sense, yes, things are affected. Oil Sands, we do make a modest profit in Oil Sands also in lower prices. We are the as operator, we are probably the lowest cost operator in the oil sands category. And therefore, we still make a small, but nevertheless a profit at relatively low oil prices. Of course, the it's not just the profit that you make. It's also the marginal economics if you like. So in terms of the coverage on the variable day to day cost, we are still well above that. So there is no reason for us to hold back on the operations in our mining operation Alberta. Thank you very much. And then we will have the final request to speak. [SPEAKER JEAN FRANCOIS PRUNEAU:] Okay. Good afternoon. My name is Espanyard from Amsterdam. I have a question about BG. I have heard from a person nearby the deal of BG that at the time the Dutch administration was thinking about what they have to do with Groningen you the Shell or you accept the higher price to pay for buying BGP, what is the trueness of that? Is there a link between the signed contracts and you are the supplier then you'll so you can make money out of Is there a link between? I'm interested. And my second question is last year I asked you the question about making biofuel out of water and also with the University of Austria. I have nothing to read in the annual report. How is the situation over there? Thank you. Two questions and then Thank you very much Mr. Spania for your questions. I think the PG deal it I think we've said what we wanted to say about that. I think the deal, the price that we have paid for it, I think is a good price. It's a good price for you as shareholders and our company, because we believe that the value that the BG portfolio brings is going to be in excess of what it is that we paid for it. I think it's also a good price for the BG shareholders. And some of you may also be BG shareholders, I'm mindful of and in the sense that it will give a good premium and a good recovery on their investment in that sense. So it's always a matter of finding a sweet spot where both set of shareholders feel that they win. We think that the price that we have agreed between ourselves and BG, we have struck that balance. And that's the reason why both our Board as well as the Board of BG recommend to their shareholders that they consider this favorably. I'm mindful of the question you had on biofuels. This was the solar concept that you referred to last year. Indeed, we look at this. This is one of the many concepts that we look at to use solar energy to convert that energy into hydrocarbons. Some of these schemes have more or less merits. I think the scheme that you referred to we think at this point in time has lower merits in terms of technical commercial success as some of the other things that we are looking at. But we are looking at a wide range of opportunities there. Okay. Thank you very much. And on one question, I don't have any answer. Is there a link between the gas contracts of the signed gas contracts of Groningen and your buying of BC so you can supplier of that contracts. Is there is that true that you therefore also has buy BG before because you had a mind to pay a lower price than you had already paid. No. I don't think that is an accurate reflection. Okay. No, that is not an accurate reflection of how it works. Then we have one more request. Please go ahead. Good afternoon, Mr. Chairman. My name is Desmond Kane. I represent a 3 person company called OSSL who served you well on the Corob Gas project in Ireland for over 10 years. I addressed the platform last year and you expressed an interest that I shouldn't come back this year. Well, here I am. I have written to Ben on more occasions than Greenpeace and I have tried to obtain information from Shell, which would assist me in putting my case forward to him in a better way than we have. Through Mr. Branches, we applied under the freedom of information for information that would have assisted us in satisfying Mr. Van Buren. Instead of getting what we had applied for, we got information on Shell printed paper and signed by senior Shell people on the quarter indicating that in fact the vehicle that was used to supply alcohol to Irish police officers in 2 locations in Ireland was in fact not carrying alcohol, but in fact dumping toxic waste by the directors of Shell by the directors of OSSL. Now that was an abundant life. That was a document was supplied to us instead of information that would have helped me to assist Mr. Van Burden. I have two questions, 2 small questions. First one is, how do you feel if I'm telling the truth about us not being toxic waste dumpers, how do you feel that that has appeared on Shell paperwork and been distributed to many, many authorities in Ireland? And the second question is this, can we have a cast iron guarantee of a 1 hour meeting with senior Shell management at what we can outline our grievances. There's an obscene situation and a small company who served you well has been left in tatters because of misinformation and lies. Thank you. Thank you. Well, Mr. Ken, welcome back. I hope and trust you will be here next year as well by the way. We have been in a dialogue Mr. Kane on this now for many years. The allegations that you have made that we would have supplied large quantities of alcohol to the Irish police are very grave allegations. We have of course investigated that. We have investigated that quite thoroughly. And we actually have found no evidence to suggest that's the case. But at the same time, this has also been investigated by the Irish police. It has been investigated by the Independent Police Ombudsman Commission in Ireland. These have been very thorough investigations. And again, there is no evidence to suggest that this is the case. You came here last year and the year before saying that you had have not been able to do so. At some point in time, Mr. Kane, I have to conclude that we are wasting each other's time. Now you come with a new set of claims about toxic waste. It I think the case with the alcohol we had no, no, let me finish my part as well. In my mind, we have taken this very, very seriously. These are very grave allegations. There are bribery and corruption allegations that I take very serious. And by the way also the Irish government takes very serious. There is no substance to this and you are not able to come up with anything else. So at this point in time Mr. Kane, I'm going to draw the line under this and I'm going to consider this case closed. As long as you are a shareholder in our company, you are welcome to come here to say what you want to say, but you're going to get exactly the same reply from me. Thank you. Could you comment? I think we have a case closed here. No, thank you very much. Can you comment on the toxic waste? No, thank you very much indeed. There will be means of contacting our Corporate Secretary as you know if you want to produce material evidence on any other issue. Thank you. Next please. And I think I urge all of you who want to speak to appear now so that we know what the demand is and be very, very brief. I'm just mindful of time for the whole audience. So please, very brief. Your wish is my command, Mr. Chairman. Brief, short, cut and clear. My name is Maricel Desmet. I represent CargoFlex. We're also working in the offshore industry. But I have a question to the 2 financial mologues, 1 on your board and 1 on your committee. To Simon Henry, what would happen could you paint Mr. Henry a dark picture to the world If we shall do not explore and other gas and oil companies, we stop exploring for gas what would happen to this world, because all the environmentalists, they're all claiming and accusing you. But what is the negative side if we stop breathing oil so to speak? Could you please answer that question our 2 financial monologues? And then we have 2 systems and I can assure you that we have a totally free emission when we do transport from the offshore platform to the platforms and back and that is quite interesting. But that's a different question. That question Mr. Henry, you're a financial whiz kid. I love to hear your comment. Thank you for your kind address. Simon? Thank you very much, Mauriz, for the question. I may have to think about this one. I think if I go back to the 80% of fossil fuels today, 80% total energy is fossil fuels a day. Oil is 30 plus percentage points of total energy demand. Most of that oil is used for transportation. The gas that we produce is used for power, heating and obviously both provide support for chemicals. So if you take away the oil and the gas, we become unable to move anything without an alternative. Now the alternatives at the moment are fairly limited biofuels, very, very small number of electrically powered vehicles. So we would not be able to produce food. We would not be able to move that food, process it or place it in shops for people to buy. It would just not be possible. And so the basics of life would not be available. I think it's also fair to say that most of the other basics of life these days are made from materials in processes that require energy of the sort that we prepare. The clothes you wear almost certainly include our chemicals. The roof over our head almost certainly includes building materials based on our industry and certainly produced with energy that we produce. So I think in simple terms modern life would not be possible. Yes. That's what I expected you to say. And I'm glad you confirmed my thoughts. I think it's good for the Greenpeace guys to remember this when they're taking a ship, going on vessel and protesting. I mean, they have the same problem as we have, but they do it from a different standpoint. I'm from the positive side, they're from the negative side. And I like dialogue and you are dialoguing. And I know I'm from Groningen myself. My mother was from Winchowton. I'm very much living with Mrs. Nicolette and Mrs. Mariana from that Groningen area where we're all having some ding to do in the boot. That's done. That's the old Groningen dialect. We all know that We're going to get a solution. And then the keynote question always remains, should we have a clawback clause also for politician here adjourned in the Advisory Board, very good one. And that clawback clause, why should we only blame Nam and Shell? Why shouldn't we blame the politicians who allowed the license 50 years ago? We're forgetting that. I don't see that in the discussion and I wanted to raise that question. Thank you for raising and that gives us some food for thought as they say. So thank you very much. There are 2 more requests for the floor. So brief please. So I'll be very brief, man. Name is Van Eeten. I'm a Private Shareholder of Amsterdam. I want to make a remark and then put a question. And for the change, Mr. Chairman, if you do allow me, I want to continue in that for a change. As long as you are brief, you are my friend here. The same field. There's a lot going on in the field of energy. I'm thinking about electrical cars and windmills, and I think this is the wrong way to do things. What has this got to do with Shell? I'm thinking about power plants that use gas. And this brings me to Shell. When Mr. Voser was still CEO, I asked the following question. Is this the long term development, development that I'm seeing in all sorts of countries? Is this the business case for Shell in the long term? A short unclear question. Let me answer in Dutch as well. Are you referring to the business model regarding electricity and more electrical cars? Is that what you're referring to? No, no. I'm talking about selling gas, gas being a supplier of gas, energy and oil. Mr. Van Buren, what exactly is the threat? I'm sorry for not understanding you, the speaker. If energy would come from alternative sources, you would have you wouldn't need any oil and gas or less oil and gas. I'm referring to this development. As well including the ones on the international. Well, yes and no. If for whatever reason, of course, we would not need fossil fuels anymore in a very, very short period of time, which is what indeed people some people in society believe is the case, this would be very disruptive for our business model. It will also be very disruptive for everybody else on the planet. So therefore, we don't think it's going to happen. Over time, yes, I'm convinced that if we look at a longer time horizon, there will be a completely different energy system emerging. We are right in the middle of that transition. In some places, it goes very fast, take Germany. In some places, it will take longer. And we as a company need to be ready for that transition, which means that at the moment we are focusing more on low carbon solutions like gas. We're focusing more on solutions that the world is going to need like carbon capture and storage. We're going to look at all our projects and value chains to see whether they are robust against a high carbon price environment or a low carbon intensity future. And we are looking at or a low carbon intensity future. And we are looking and experimenting very effectively with also new business models that have nothing to do with oil and gas. So what can we do with or in renewables? That doesn't necessarily mean that we want to buy yet again another big solar business, but there are many other business models that we can think of associated with renewables that we can make money with. At the moment, they are not material. There is at the moment not an opportunity for us to massively participate in that industry because it is so tiny. But we want to be again at the forefront, so that when this transition takes place, we are a leading investor, a leading developer and a leading, let's say, shareholder again in a new type of energy system. So yes, in the long run, the model will change, but we will change with it. Thank you very much. And for my sake Sir, may I make a short comment. First, thank you. And please go on with your dividend policy. Thank you. I do appreciate it. Thank you. Thank you for your comment. Question point number 2, final question. Okay. My image is not so good. That's not of my name, a bit special. I have to fill in this card. And as for my stellar problem on to fill it in good. So I like to the it is in Dutch, so that I can put on the marks very well. This is English, but I'm not so good to understand it. If I understand you correctly, you would like to have a ballot or voting card in the Dutch language. Is that correct? Is that what you want? Yes. A request. So we will keep it in English. This is an English company. That is my idea. But we can help you. We can help you with your card here and now. There's somebody there called the Chief Paul Stewart. His English and his Dutch are excellent and we'd be happy to help you fill in your voting card. I hope you'll be happy with that. Very good. I think we have had a good dialogue, but I think we need to come to a close. So there is one more request. So can we please have that final question, please? Question point number 1. Please go ahead. Hello. Yes. Yes. I'll be speaking Dutch. I'm not very good in English. My name is Marekka Sante from Heimstede. The oil pollution by Shell, the oil pollution is detrimental to people, but also animals and plants. I'm sorry. So oil pollution is detrimental to people, but also animals and people on land and in the water. In short, for the entire ecosystem that we live in. Increasingly, companies are being evaluated by the public at large in terms of the way in which they deal with our ecosystem. Nowadays, developments happen very quickly. Public debates and campaigns, boycott campaigns can damage a company in a very short period of time and can force a company to adjust its policy. Best thing is not to let it come to that, which is why I believe that Shell should cherish our vulnerable ecosystem. We and our future generations in particular will become increasingly dependent upon them? Thank you. Yeah. Yes. I thank you very much for your comment. I think we note your concern. It's a valid concern, which we'll have to keep in mind being a company which is heavily involved in a complex industry or producing energy. So I see that there are no further requests. I thank you for your good questions and the dialogue that was created by that. But I think we have spent a reasonable amount of time and we can now move on. As I mentioned earlier, voting will take place at the end of the meeting using the paper poll cards. And please use the assistance provided by the Chief Post who adhere on my left corner in this room on your right. Behind me, you will see the proxy vote submitted by the shareholders who are not able to attend in person today. So we see that there's a very strong 99.57% support for the resolution of approving the annual report and the accounts. Your vote will be included in the total when the registrar has counted all your votes at the end of the meeting. So we then move over to the Resolution number 2, approval of the Director's Remuneration Report. This is an ordinary resolution seeking shareholder approval for the Director's remuneration report. The report is set out on pages 79 to 90 of the annual report. The remuneration policy was approved by the shareholders at last year's AGM and is effective until 2017 AGM, unless a further policy is proposed and approved by the shareholders in the meantime. I formally propose that Resolution 2 as set out in the notice of the meeting be approved. Please address any questions you might have to me. However, I'm sure and most of the questions I might ask to pass them over to Gerard Kleistele, who is the Chairman of the Remuneration Committee and who will be assisting me on those responses. So any request for the floor here? Question point number 1. Yes. My name is Kiena. I speak with behalf of EV and a number of retail shareholders. Mr. Chairman, I've got three questions related to remuneration within Shell. The number 1, which will not surprise you was at least a surprising fact for us that there was a large pension payment by Shell for Mr. Ben von Burden of close to €11,000,000 and another close to €8,000,000 tax compensation which was granted. Now this was surprising for I think a lot of people a lot of the shareholders. It's not that we don't think Mr. Mettelbergen is worth his weight in gold, but that doesn't mean he should be paid like if his weight is in gold. So my question is the answer of Shell was well this is more a standard policy within Shell. If somebody is being promoted, of course, his pensionable salary needs to be adjusted upwards for remaining years that he's expected to be employed. And also if an employee regardless of his of where he is in the hierarchy is moving from one country to the other one and there may be some tax implications the company shall will compensate for that. Now if that is the case, I'm wondering whether maybe the compensation benefits across Shell are maybe much too generous. And maybe that's a fundamental issue which needs to be addressed certainly in an area where we conclude for the time being with low oil and gas prices and the oil and gas that needs to be found across the world is more and more difficult and more expenses to be found. So there will be pressure on margins. Maybe it's time also to look at the compensation and benefits policy within Shell throughout Shell which was obviously you see the large amounts happening at the top. But since the average salary in Shell is rather high $160,000 you said, it means maybe there is some slack, there's a fat to be cut as well and maybe there's some room to maneuver there for Shell in order for Shell to become more cost efficient. So that's maybe the first question we'd like to address to you. The second has to do in rewarding the executives and I think also the levels below the executives for long term performance. I think we disagree on the fact what long term is. I think if we consider the job of executives to be important and serious and that has a lot of strategic components, I think it's pointless to consider after 3 years whether a strategy has worked or not. And the point I've been making in the past and I will continue to make that a company of the size and the complexity of Shell which is making 1,000,000,000 of dollars investments which are expected to return any kind of profits in 5, 10 or 15 years even longer, it also means that judging when an executive has done a good work in developing a strategy and implementing a strategy should happen also after 5 or 10 or 15 years not after 3 years. So that's a long term component, which I strongly suggest that you reconsider in your old policy if you take your own job seriously. And the last is something very practical. Shell has been admitting that the total shareholder return over the last 3 years has been disappointing. I think the dividend was excellent, but overall it was disappointing. With that in mind, it surprises me that current remuneration policy allows that 42% of the maximum long term pay was being vested was being awarded still. So it seems somehow a mismatch between performance for us shareholders and the rewards as a variable component for the executives. So that's my 3rd and last question. Thank you very much. I think there were 2 requests to consider. First of all, the level of compensation overall with a little bit of teaser coming from the CEO package. And then the LTIP to be considered whether 3 years is too short. And then the TSR discrepancy to the levels. I might ask Gerard Kleist today to comment on that. Thank you, Mr. Chairman. And to your three questions, first of all, with respect to pension, you will be aware that this number of €10,000,000 in Bands single pay figure came into existence because of U. K. Reporting requirements where the difference in the value of the pension beginning of the year end of the year has to be multiplied by 20. And so fact is that pension value for Ben during the year 2014 has increased by about €500,000 which is reflection of the fact that he has been promoted from a member of the executive team to the CEO of the company and consequently has had a significant raise in salary. And being a member of the Shell defined benefit pension plan was entitled to that increase in value. You also know that Shell has closed its defined benefit plan also in the Netherlands given the changes in the tax regime in the Netherlands where only 89,000 now can be brought into a pension fund tax free and the rest is taxable or has to be done in other ways. So Shell has addressed I think also in your remark with respect to the generosity of some of the benefits for Shell employees by adjusting to the reality I think of the market as we see it today in the Netherlands and in other countries that defined benefit plans are a thing of the past. There is now a defined contribution plan. And also PEN going forward will be subject to those same rules. So an exceptionally high figure because of U. K. Reporting requirements an absolutely normal situation under the Dutch defined benefit pension plan rules and reporting rules and a change in pension scheme for all Shell employees. The same holds of course for the tax part, which also is something which is applicable to all Shell expatriates. And that's not a gesture of Shell's generosity. There are constituencies where Shell is the beneficiary of that treatment. Shell also has expatriates in territories where no tax is due and people are still taxed as if or they were employed in their home countries. So for an expatriate in the Gulf, Shell is the beneficiary. I can't say on balance where that exactly sits, but it's not just being generous to employees. It's applying consistent similar rules to everybody that sometimes are to the benefit of the company and sometimes the company has to compensate the employee. With respect to reward for long term performance, yes, there is a 3 year vesting and then a 5 year holding period. You also have to keep in mind in terms of keeping executives aligned with long term shareholder interests that we have significantly increased the shareholding requirements for the CEO and the CFO. And I would say standing practice in Shell is that an executive has never sold the shares when in function and as long as in function for the company. So I think that even beyond the vesting periods and the vesting requirements, which we strictly adhere to and which are pretty much in line with the way the shareholder perceives the Shell performance over that period. There is a long term shareholding with all Shell executives well in excess of the minimum holding requirements. Mr. Chairman, if may I react very shortly, as far as to keep shares for longer period, of course, that helps. But you still have received the shares and you can keep the shares. And even goes terrible with the company share price drops in half, you still can keep half of this variable component even though your strategy has failed, which you can judge after 5 or after 10 years. So I only partially agree with that. I'm happy with the explanation about the taxation. That's a fair point. I do not understand the €10,000,000 or €11,000,000 for the pension, because I understood this real money being put into the pension scheme would cover the pension liabilities for Mr. Ben van Beede. But it's not just accounting I assumed. No, no, no, no. It's we have here 2 situations. 1 is we have the 2 the under the Dutch pension scheme, you have the what we call the back service if somebody gets a raise in salary in a defined benefit final pay plan. That results that would have resulted in the reporting of around 500,000 in the Netherlands. Because you only report what you had as back service in the Netherlands. In the U. K, you have to multiply the annual increase by 20. That's the U. K. Reporting requirement, which overstates. So this is not money that has gone to the executive in any way. It's also not the money that in future he will get. If you do the calculation on an actuarial basis, the multiplier rather would have been 13 rather than the 20 under the U. K. Reporting requirements. The tax on that again is a totally U. K. Thing over the full period that Ben was employed as a Shell employee in the U. K. Okay. Thank you very much. That's clear. Any other comments, questions that you want to make on remuneration? If not, we move ahead. Thank you for that. And let me show the proxy vote submitted to the shareholders before the meeting. We have 96.2% for approval of the Director's Remuneration Report. And your votes will be added and then the final numbers will be disclosed on our website. Thank you. We then move over to the resolutions number 3 all the way to number 13 included. So there's a total of 11 ordinary resolutions to deal with the reappointment of the by the shareholders of all current directors who wish to continue said they are ready to continue to serve as a director for the company. The biographies you will see in the notice of the meeting and the Board recommends that you vote in favor of each of these respective resolution. I propose that resolutions 3 to 13 all ordinary resolutions as set out in the notice of the meeting be approved. Are there any comments you want to make? I note that there are no requests for the floor. I now suggest we can see the proxy vote submitted before the meeting in each of the resolutions. So you can see that the support ranges from 97 point 5% to 7% all the way to 98.9 So we note and your votes will be added and the final count will then be the official count. Thank you. Moving then over to Resolution number 14 and 15. It's the reappointment and remuneration of the auditors. However, before doing so, I would like to say a few words about the outcome of the external auditor tender process, which we informed you about in the 2013 annual report. We stated back then that at the end of 2014, we would recommend an auditor tender process. We would commence with the auditor tender process with planned completion by mid-twenty 15 and with the chosen firm being appointed for the financial year of 2016. I can now confirm that the tender process has been completed. And on the recommendation of the Audit Committee, the Board has agreed to propose to the 2016 Annual General Meeting that which is called Ernst and Young well, better known to many of you be appointed as the company's external auditor for the financial year 20 16. We are very pleased with the tender process and I would like to congratulate on the outcome. We would like to thank all those who participated in the process, especially the audit firms who submitted tenders to us. So just wanted to make a note of that that we have said we will run a tender process. We have completed that. And the Board has taken a decision to recommend for 2016 financial year to have as the company external auditor. But returning to today's business, the resolutions 14 and 15 concern the reappointment and remuneration of the auditors for this year 2015. Pricewaterhouse has And accordingly, I propose that resolutions 1415 both And accordingly, I propose that resolutions 14 and 15 both ordinary resolutions as set out in the notice of the meeting be approved. Are there any questions? Mr. Chairman? Well, Guy welcome back. It's always a pleasure. Mr. Chairman, ladies and gentlemen, my name is Guy Jub. I am Head of Governance and Stewardship at Standard Life Investments. We are long term investors in Shell and currently manage 17,000,000 A Shares and 43,000,000 B Shares. The Audit Committee report states PwC appointed a new lead partner in 2014 as his predecessor had completed 5 years in the role. At Standard Life Investments, we are both surprised and concerned to note that Ross Hunter is now PwC's lead partner for Royal Dutch Shell. Until last year, he signed the audit reports of Bumi Dlc. Also, he was global relation ship partner for Rio Tinto Plc from 2,006 to 2011, when Guy Elliott, who is Chairman of Shell's Audit Committee, was Rio Tinto's Chief Financial Officer. And during this period, we engaged with Rio Tinto regarding the exceptionally high level of non audit fees paid to PwC. And in the circumstances we would have expected Shell's audit committee to provide a meaningful explanation in its report about its evaluation of Mr. Hunter's perceived independence and track record. Now we have engaged both the Chairman of the Board and Chairman of the Audit Committee for over a year about these issues, but the substance of our concerns has not been addressed. And therefore in accordance with the principles of the U. K. Stewardship Code, we felt it right and proper that I should come here today to escalate our engagement. Now in addition, on reading the 2014 PWC audit report, we are struck by the disclosure that just 2 thirds, 66 percent of consolidated assets and 70% of consolidated revenue are within the scope of the audit. It seems to us that this audit scope is far lower than at most FTSE 100 companies and we are curious as to the factors the Audit Committee took into account in agreeing it. In closing, we note the appointment of as auditors for next year. We are mindful that are also the auditors to BG Group. Did the audit committee engage its investors during the tender process? And what has it done to ensure additional safeguards are in place to ensure any conflicts of interest especially during the BG offer period are properly addressed whether or not the offer is successful. Mr. Chairman? Yeah. Thank you, Guy, for your expose and for your questions. This is a well known issue and a dialogue which we have had. So but for the benefit of the shareholders, we're happy to disclose our points of view. So since there were different questions, which require different persons responding, so I suggest Simon Henry who is our CFO will respond first with Guy Elliott then on those issues which are relevant for the Chairman of the Audit Committee. Thank you. Sir Simon? Thank you, Chairman. And thank you, Chairman and thank you for the question, Guy. And David will comment on the first two points around Boumi and Rio, because surely they're questions for the Boumi and the Rio board, not for Shell. What I can assure you is that both ourselves on the executive and the audit committee, Guy will speak, carried out full due diligence on all issues associated with the appointment of lead partners and acceptability to Shell. And we were comfortable that all due diligence was applied at that point in time. As regards to the BG deal, it came to light as we were progressing both transactions both the BG and the tender for the audit that in fact was in both cases involved, but the 2 decision processes were running independently. And we have spoken obviously with about protecting against any ongoing conflict of interest between now and the potential completion of the deal. I can't say exactly how that will play out, but when we realized there was a potential that we were it was clear that we could avoid the conflict of any of the individuals who may be involved. It happens probably to be a coincidental serendipitous bonus from the 2 processes, because with the ongoing support that we will receive from PwC, we should be if the deal is successful in a good place to do a successful and quick integration. Guy? Yes. Thank you, Simon. And then Guy next. Perhaps I could reiterate the due diligence that we carried out before the appointment of Ross Hunter and which I've separately explained to you which was a very thorough due diligence. Ross Hunter was one of 3 candidates that were considered by PwC were put forward by PwC and they were interviewed by management. Ross Hunter was recommended by management and I carried out the due diligence. It is true that he had been the Rio Tinto auditor up until the year ending 2010 for those years. But that is quite a big gap between then and now. And the ordinary cooling off period for these purposes is at the maximum 2 years. So we did not consider that to be a conflict. I might add that Mr. Hunter has been a very strongly independent auditor in all matters that we've dealt. I mean he's very tough and that is exactly what we want. I won't comment on the non audit fees paid to Rio Tinto. But what I can say is that the non audit paid by Rio Tinto to PwC. But what I can say is that the levels of non audit fees paid by Royal Dutch Shell to PwC are very low indeed. So a very small fraction of the audit fee itself. So I think that underlines the independence point. You also made a comment about the process and whether we'd engaged investors in the appointment of Ernst and Young. I don't regard that as normal or necessary. We went through a normal process. We disclosed what we were going to do and we carried out exactly as we said we would do. And so we I think are very pleased with the outcome. We had a good showing from everybody, but I think Ernst and Young won it fairly. The safeguards point I think has been fully covered by Simon Henry. And finally on the question of the scope and the number of assets within scope for PwC's audit, This is a very big company. We do have to make sensible choices. I'm quite satisfied on behalf of the committee that we have made a sensible choice about materiality when it comes to defining the scope of the audit that the PwC carry out. Thank you. Mr. Chairman, perhaps therefore in the interest of brevity, could I just state that so far is engaging shareholders in audit tenders. Best practice, emerging best practice is indeed to do that. So it is disappointing, but I understand that it hasn't happened. But on the substantive issues rather than continue the dialogue now, May I merely ask because I think that there are some unanswered questions that need to be considered that these be considered by the Board over the coming months so that our shareholders can be assured in next year's audit committee report if not elsewhere that they have been addressed? Obviously, we will facilitate that and make sure that there will be a dialogue and we'll cover those issues. And at the Board please. By the Board, absolutely. Thank you very much, Guy. Any other issues that anybody want to take up in relating to the reappointment and remuneration of the auditors? Please. [SPEAKER JEAN FRANCOIS VAN BOXMEER:] No. Not specifically answering that question, but I only want to say that I'm very glad to be here again. I've been all the years last years and I make my compliments for the excellent way you are answering our questions. And I have also another question. Why is no connection with London as last year's? I miss it. We it's a very clear response there. We took a decision 3 years ago not to have the link to London for 2 or 3 reasons. First of all, we get a lot of feedback from participants that it is a very clumsy you have to shift from one location to another in the video and it made a meeting even longer than otherwise. Secondly, there is a serious securities relating to the video link. And thirdly, 4 years ago when we last time had the video link, actually the attendance number had dwindled down to below 100 shareholders and there was there seemed to be clearly less interest. What we did was that we noted that we will do away with the video link, but that 2 days after the AGM, the Chairman and CEO and potentially 1 or 2 other Board members or management members will have an informal meeting with London based shareholders so that they will have a possibility to ask their questions. And this has worked very well. I can tell you that the attendance went up from the last meeting for this informal meeting in London and there was a lively discussion of a few hours and it was commended by the participants. So we feel we might have done something right in that decision. Thank you so much. Once again, my compliments. And Mr. Van Burden, I wish you all the best in your leadership of this wonderful company. Next comment please. Next question. My name is Fred Heinemann. While Dutch Shell is involved in a lot of operations worldwide and also in faraway countries just like Nigeria, Angola and so on. The auditors in faraway countries are the old members of the big four in order that the procedures and the techniques are very much the same, which they are applying or is whether Shell also employing local auditors, who should have perhaps in faraway countries is a little bit doubtful? That's my question. Well, Simon Henry is perhaps the best to answer this question. I can assure you that both PwC and have global capabilities. They use their own staff wherever we operate. But in practice, most of our audit work now is done through our finance operations centers, which are in Chennai, Manila, KL and I forget that. A little bit in Cape Town and Glasgow as well. So a lot of that work is done in those centers and it is done by qualified professionals and we don't use local companies. Thank you. Thank you, Tom. Thank you. Thank you very much. In case there are any no other questions that want to be raised, I now want to suggest we move to seeing the proxy vote numbers that have been submitted to the meeting. We have for the Resolution 14, 97.9 percent and the Resolution 15, 99.9% support with your votes being added giving them the final numbers. So we note that and move to the Resolution 16 concerning allotment of shares. Under the U. K. Companies Act, the directors are subject to certain exceptions unable to allot shares without the authority of the shareholders. This resolution therefore seeks authority to allow the directors to allot ordinary shares up to an aggregate nominal value of €147,000,000 which represents approximately 1 third of the company's issued share capital. This authority will comply with the guidelines issued by the institutional investors. I propose that the Resolution 16 ordinary resolution as set out in the notice of the meeting be approved. If no comments, I should just move to proxy votes, 97.5%. Thank you. And I expect your votes being added then will give us an equally strong support. Thank you. Moving on to Resolution number 17. This application of preemption rights, this is a special resolution means that we need 75% majority for approval. If passed, it will allow the company to allot a certain number of shares without first offering them to the existing shareholders. Under the Companies Act, when the new shares are allotted, they must first be offered to the existing shareholders pro rata to their holdings. This resolution allows the directors to allot shares as if the preemption right of Section 561 did not apply. In accordance with institutional investor guidelines, the amount of shares to be issued for cash other than in connection with the rights issue or other preemptive offer is restricted to 5%. So a maximum of 5% with the directors will put the directors mandate allow this resolution of the existing issue share capital. I propose that this resolution number 17, a special resolution as set out in the notice of the meeting be approved. Can we move ahead? No comments, questions. Thank you.