THE OBJECTIVES OF THE SHELL GROUP ARE TO ENGAGE EFFICIENTLY, RESPONSIBLYAND PROFITABLY IN OIL, OIL PRODUCTS, GAS, CHEMICALS AND OTHER SELECTEDBUSINESSES AND TO PARTICIPATE IN THE SEARCH FOR AND DEVELOPMENT OF OTHERSOURCES OF ENERGY TO MEET EVOLVING CUSTOMER NEEDS AND THE WORLDSGROWING DEMAND FOR ENERGY.

WE BELIEVE THAT OIL AND GAS WILL BE INTEGRAL TO THE GLOBAL ENERGY NEEDSFOR ECONOMIC DEVELOPMENT FOR MANY DECADES TO COME. OUR ROLE IS TOENSURE THAT WE EXTRACT AND DELIVER THEM PROFITABLY AND IN ENVIRONMENTALLYAND SOCIALLY RESPONSIBLE WAYS.

WE SEEK A HIGH STANDARD OF PERFORMANCE, MAINTAINING A STRONG LONG-TERMAND GROWING POSITION IN THE COMPETITIVE ENVIRONMENTS IN WHICH WE CHOOSETO OPERATE.

WE AIM TO WORK CLOSELY WITH OUR CUSTOMERS, OUR PARTNERS ANDPOLICYMAKERS TO ADVANCE MORE EFFICIENT AND SUSTAINABLE USE OF ENERGYAND NATURAL RESOURCES.

02 Chairmans Message03 Chief Executives Message04 The Board of Royal Dutch Shell plc06 Who We Are and What We Do08 Industry Overview09 Our Strategy in Action:

More upstreamProfitable downstreamCreating the culture and organisation to deliver

16 Meeting the Energy Challenge

18 Summary Operating and Financial Review23 People24 Summary Directors Report26 Summary Consolidated Financial Statements30 Summary Directors Remuneration Report33 Report of the Independent Auditors34 Corporate Governance Summary 36 Risk Management and Internal Control37 Supplementary Information38 Shareholder Information

ROYAL DUTCH SHELL VISION

In 2005 shareholders approved the UnificationTransaction of our parent companies underRoyal Dutch Shell plc. This far-reaching changeis already bringing benefits. Our new clearer,simpler governance structure is helping to reduceduplication, speed up decision making andincrease accountability. The single smaller Boardand its committees are working well and theirreports can be found on pages 24-25, 30-32and 34-35. I am also pleased that the clearerlines of accountability in the new structure havebeen widely welcomed by shareholders.

The Board believes that our organisation isnow better placed to build and develop ourbusiness for the future and meet the challengesahead. At the heart of those challenges is theneed to find and develop the resources tomeet the growth in global energy demand.We will also need to produce those resources

in a way that minimises the effect on theenvironment. The Chief Executive and his teamhave been successfully driving forward Shellswork both in securing and producing moreoil and gas and in developing energy solutionsfor the longer term. This will ensure that Shellcan play its part in meeting the worlds futureenergy needs.

There were many business challenges in2005, some of which were linked to the naturaldisasters that struck many parts of the world.The effects of the tsunami in Asia, hurricanesin the Gulf of Mexico and the earthquakein India and Pakistan, were felt across Shelland in the communities in which we work.The Board is proud of the response of Shellstaff to these tragedies and their tireless workboth to support the affected communities andto restore our business as quickly as possible.

It has been a great privilege for me to be thefirst Chairman of Royal Dutch Shell plc and tosee it make such a successful start. I am confidentthat we can build on that success and that,with the proposed appointment of Jorma Ollilaas my successor, the future of the company isin good hands.

Aad Jacobs Chairman

2 Royal Dutch Shell plc

CHAIRMANSMESSAGE

Thanks to the great efforts of many Shell people, 2005was a year of recovery. We achieved a great deal,but there is more to be done to ensure that recoverycontinues. We delivered record earnings and cashgeneration; we were successful in securingsignificant new resources; and we reinforced ourleading positions in liquefied natural gas (LNG)and Oil Products. Our strong financial positionhas allowed us to return over $17 billion to ourshareholders. We also made capital investmentsof $15.6 billion (excluding the minority sharein Sakhalin). Our strategy continues to be moreupstream and profitable downstream. This isreflected in our capital investment programme,which will increase to $19 billion in 2006,keeping pace with our earnings, and will betargeted at the upstream.

In Exploration & Production a number of importantnew fields came onstream and we met ourproduction target, despite the damage to ourfacilities caused by hurricanes in the Gulf of Mexico.There were, however, large cost overruns on ourSakhalin II project and we are ensuring that welearn the lessons from these. We believe that gasdemand will continue to grow rapidly and, in2005 our Gas & Power business strengthenedits leading positions in the key markets of Asia,Europe and North America, with a number ofnew LNG projects starting operation or construction.

In the downstream, Oil Products earnings were up31%, reflecting strong refining margins and goodoperational performance. By standardising andsimplifying our processes we have reduced costsand improved customer service. We also continuedto provide customers with an increasing range offuels that can improve engine performance andreduce environmental impact. At the same time,we strengthened our position as the worlds leadingmarketer of biofuels. Chemicals also had goodearnings in 2005 and, with the completion of theNanhai petrochemicals complex in southern China,made an important step in securing a position inthis rapidly growing market. Much of the increase inenergy demand is coming from emerging economiesin the Asia Pacific region and we are ensuring thatwe extend our presence in those growth markets.

I believe that Shells commitment to technology andinnovation, combined with the dedication and skillof our employees, will enable us to play a leadingand competitive role in meeting the worlds futureenergy needs. This includes taking on biggerand more demanding projects and ensuring weintegrate economic, and social and environmentalconsiderations into our management of thoseprojects. Our Project and Commercial Academies,which have made a good start, will be at theheart of our work to acquire and to developprojects successfully in the future. In our operations

we aim to be a first-quartile performer. Wecontinue to focus on Health, Safety, Securityand Environment (HSSE).

We also realise the importance of managingthe carbon dioxide emissions from oil and gasresources. This offers opportunities to developour business and we are investing in a range ofresearch into carbon capture and storage that canhelp us to develop greener fossil fuels. At the sametime, Shell aims to develop at least one substantialbusiness in alternative energy. In the past yearwe have made good progress on projects in wind,hydrogen and advanced solar technology thatwill help us move towards that aim.

All of us in Shell are pleased with the progress wehave made in 2005 in improving our operationalperformance; in developing projects; and insecuring new resources. I believe we now have astrong foundation to build for the future to deliverthe leading performance and competitive returns thatour shareholders want to see. So this means 2006will be the year of delivery and growth for Shell.

Jeroen van der Veer Chief Executive

Chief Executives message 3

Shells commitment to technology and innovation,combined with the dedication and skill of ouremployees, will enable us to play a leadingand competitive role in meeting the worldsfuture energy needs.

CHIEF EXECUTIVESMESSAGE

THE BOARD OF ROYAL DUTCH SHELL PLC

4 Royal Dutch Shell plc

15 6 7 11 13 3 5 8

2 4 14 9 12 1 10

Royal Dutch Shell has a single tier Board of Directorschaired by a Non-executive Chairman, Aad Jacobs.The executive management is led by the ChiefExecutive, Jeroen van der Veer. The members of the Board of Royal Dutch Shell plc meet regularlyto discuss reviews and reports on the business andplans of Royal Dutch Shell. In 2005, the Nominationand Succession Committee recommended to theBoard the appointment of Jorma Ollila, currentlyChairman and CEO of Nokia Corporation, tosucceed Aad Jacobs as Non-executive Chairmanof Royal Dutch Shell. The Board adopted thisproposal. A resolution has been proposed to beput to the Annual General Meeting of shareholdersof Royal Dutch Shell, to be held on May 16, 2006,for the election of Mr Ollila as a Director of RoyalDutch Shell, with effect from June 1, 2006.

1 Aad Jacobs oNon-executive ChairmanBorn May 28, 1936. A Dutch national, appointed Non-executiveChairman of Royal Dutch Shell in October 2004. He became a member of the Royal Dutch supervisory board in 1998 andChairman in 2002 and was a Board member1 of Royal Dutch until the merger of the company on December 21, 2005. He waspreviously Chairman of the Board of Management of ING GroepN.V. He is Chairman of the supervisory boards of Joh. EnschedB.V., Imtech N.V. and VNU N.V.; Vice-Chairman of the supervisoryboards of Buhrmann N.V. and SBM Offshore N.V.; and a memberof the supervisory board of ING Groep N.V.

2 Lord Kerr of Kinlochard GCMG+oDeputy Chairman and Senior IndependentNon-executive DirectorBorn February 22, 1942. A British national, appointed a Non-executive Director of Royal Dutch Shell in October 2004. He was a Non-executive Director of Shell Transport from 2002 to 2005. A member of the UK Diplomatic Service from 1966 to2002 (and its Head from 1997 to 2002), he was successively UKPermanent Representative to the EU, British Ambassador to the USA,Foreign Office Permanent Under Secretary of State and Secretary-General of the European Convention. He is a Non-executive Directorof Rio Tinto plc and Rio Tinto Limited and Scottish American InvestmentCompany plc and Chairman of Court/Council of Imperial College.Trustee of the National Gallery and of the Rhodes Trust.

3 Jeroen van der Veer Chief ExecutiveBorn October 27, 1947. A Dutch national, appointed Chief Executiveof Royal Dutch Shell in October 2004. He was appointed Presidentof Royal Dutch in 2000, having been a Managing Director ofRoyal Dutch since 1997 and was a Board member of Royal Dutchuntil the merger of the company on December 21, 2005. He wasa Director of Shell Canada Limited from April 24, 2003 until April29, 2005. He joined the Group in 1971 in refinery process designand held a number of senior management positions around theworld. He is a Non-executive Director of Unilever (which includesUnilever N.V., Unilever plc and Unilever Holdings Ltd.).

4 Peter VoserChief Financial OfficerBorn August 29, 1958. A Swiss national, appointed Chief FinancialOfficer of Royal Dutch Shell in October 2004. He was appointeda Managing Director of Shell Transport and Chief Financial Officer(CFO) in October 2004. In 2002, joined the Asea Brown Boveri(ABB) Group of Companies, based in Switzerland as CFO andMember of the Group Executive Committee. Also responsible forABBs Group IT and the Oil, Gas and Petrochemicals business.Originally joined the Group in 1982 where he held a variety offinance and business roles in Switzerland, UK, Argentina and Chile,including CFO of Oil Products. He is a member of the supervisoryboard of Aegon N.V. (he will retire April 25, 2006) and a memberof the supervisory board of UBS AG.

5 Malcolm Brinded CBE FREngExecutive Director, Exploration & ProductionBorn March 18, 1953. A British national, appointed an ExecutiveDirector of Royal Dutch Shell in October 2004. He was previouslya Managing Director of Shell Transport since March 2004 andprior to that a Managing Director of Royal Dutch since 2002. Joinedthe Group in1974 and has held various positions around the worldincluding Country Chair for Shell in the UK, and Director of Planning,Environment and External Affairs at Shell International Ltd.

6 Linda CookExecutive Director, Gas & PowerBorn June 4, 1958. A US national, appointed an Executive Director of Royal Dutch Shell in October 2004. She was appointeda Managing Director of Royal Dutch in August 2004 and was a Board member of Royal Dutch until the merger of the company on December 21, 2005. She was President and Chief ExecutiveOfficer and a member of the Board of Directors of Shell CanadaLimited from August 2003 to July 2004. Joined Shell Oil Companyin Houston in 1980, and worked for Shell Oil Company in Houstonand California in a variety of technical and managerial positions.Member of the Society of Petroleum Engineers and a Non-executivedirector of The Boeing Company.

7 Rob RoutsExecutive Director, Oil Products and ChemicalsBorn September 10, 1946. A Dutch national, appointed ExecutiveDirector of Royal Dutch Shell in October 2004. He was a ManagingDirector of Royal Dutch from 2003 to July 4, 2005. Joined theGroup in 1971. Held various positions in the Netherlands, Canadaand the USA. Previously President and Chief Executive Officerof Shell Oil Products USA, President of Shell Oil Company andCountry Chair for Shell in the USA and Chief Executive of Equilon.He is a member of the Board of Directors of Shell Canada Limitedsince April 29, 2005 and director of INSEAD.

8 Maarten van den Bergh#Non-executive DirectorBorn April 19, 1942. A Dutch national, appointed Non-executiveDirector of Royal Dutch Shell in October 2004. He was a memberof the Royal Dutch supervisory board from 2000 to July 4, 2005.Managing Director of Royal Dutch from 1992 to 2000 and Presidentfrom 1998 to 2000. Chairman of the Board of Directors of LloydsTSB (he will retire at the AGM of Lloyds in May 2006) and, memberof the Boards of Directors of BT Group plc and British Airways plcand a member of the supervisory board of Akzo Nobel N.V.

9 Sir Peter Burt FRSE Non-executive DirectorBorn March 6, 1944. A British national, appointed a Non-executiveDirector of Royal Dutch Shell in October 2004. Non-executiveDirector of Shell Transport from 2002 to 2005. He was ChiefGeneral Manager and Chairman of the Management Board andsubsequently Group Chief Executive, Bank of Scotland. ExecutiveDeputy Chairman HBOS plc. Governor of Bank of Scotland from2001. Retired 2003. He is a Chairman of ITV plc and Promethean plc.

10 Mary R. (Nina) Henderson #Non-executive DirectorBorn July 6, 1950. A US national, appointed a Non-executiveDirector of Royal Dutch Shell in October 2004. She was a Non-executive Director of Shell Transport from 2001 to 2005.Previously President of a major division and Corporate Vice-Presidentof Bestfoods, a major US foods company, responsible for worldwidecore business development. Non-executive Director of PactivCorporation, AXA Financial Inc., Del Monte Foods Company and Visiting Nurse Service of New York.

11 Sir Peter Job KBE+Non-executive DirectorBorn July 13, 1941. A British national, appointed a Non-executiveDirector of Royal Dutch Shell in October 2004. He was a Non-executive Director of Shell Transport from 2001 to 2005.Previously he was Chief Executive of Reuters Group plc. He is a Non-executive Director of Schroders plc, TIBCO Software Inc.,Instinet Group Inc., and a member of the supervisory board ofDeutsche Bank AG.

12 Wim Kok#Non-executive DirectorBorn September 29, 1938. A Dutch national, appointed a Non-executive Director of Royal Dutch Shell in October 2004. Hewas a member of the Royal Dutch supervisory board from 2003 toJuly 4, 2005. Chaired the Confederation of Dutch trade unions (FNV)before becoming a member of the Lower House of Parliament andparliamentary leader of the Partij van de Arbeid (Labour Party).Appointed Minister of Finance in 1989 and Prime Minister in 1994,serving for two periods of government up to July 2002. Member ofthe supervisory boards of ING Groep N.V., KLM N.V. and TNT N.V.

13 Jonkheer Aarnout Loudon+oNon-executive DirectorBorn December 10, 1936. A Dutch national, appointed a Non-executive Director of Royal Dutch Shell in October 2004. He was a member of the Royal Dutch supervisory board from 1997 and was a Board member of Royal Dutch until the merger of the company on December 21, 2005. He was a member of the Board of Management of Akzo from 1977 to 1994 (AkzoNobel as from 1994) and its Chairman from 1982 to 1994. He is Chairman of the supervisory boards of ABN AMRO HoldingN.V. and Akzo Nobel N.V. (he will retire per May 1, 2006) and a member of the International Advisory Board of Allianz AG.

14 Christine Morin-Postel Non-executive DirectorBorn October 6, 1946. A French national, appointed a Non-executive Director of Royal Dutch Shell in October 2004.She was a member of the Royal Dutch supervisory board from July,2004 and was a Board member of Royal Dutch until the merger of the company on December 21, 2005. Formerly she was Chief Executive of Socit Gnrale de Belgique and ExecutiveVice-President and member of the Executive Committee of Suez S.A.She is Non-executive director of Alcan Inc., 3i Group plc andPilkington plc.

15 Lawrence Ricciardi Non-executive Director Born August 14, 1940. A US national, appointed a Non-ExecutiveDirector of Royal Dutch Shell in October 2004. He was appointeda member of the Royal Dutch supervisory board in 2001 and was a Board member of Royal Dutch until the merger of thecompany on December 21, 2005. Previously he was President of RJR Nabisco, Inc. and subsequently Senior Vice-President andGeneral Counsel of IBM. He is Senior Advisor to the law firm Jones Day and to Lazard Frres & Co and member of the Board of Directors of The Readers Digest Association, Inc.

Beat HessGroup Legal DirectorBorn July 6, 1949. A Swiss national, appointed as Shell GroupLegal Director in June 2003. Previously General Counsel of ABBGroup. Non-executive board member of Ciba Specialty Chemicals.

Michiel BrandjesCompany SecretaryBorn December 14, 1954. A Dutch national, appointed asCompany Secretary of Royal Dutch Shell in February 2005.Previously Company Secretary of Royal Dutch Petroleum Companyand Group general counsel corporate. Joined the Group in 1980as a Legal Adviser.

Audit Committee+ Remuneration Committee# Social Responsibility Committeeo Nomination and Succession Committee

1 As from July 4, 2005 Royal Dutch had a one tier board instead of a two tier board. This one tier board existed until the companymerged into Shell Petroleum N.V. per December 21, 2005.

The Board of Royal Dutch Shell plc 5

Royal Dutch Shell consists of the upstream businessesof Exploration & Production and Gas & Power andthe downstream businesses of Oil Products andChemicals. We also have interests in other industrysegments such as Renewables and Hydrogen.

We believe the core strengths of these businesseslie in the diversity of our portfolio and our skills, alongwith our ability to develop and apply advancedtechnology, and our continued development ofcustomer-focused businesses around the Shell brand,which is one of the most widely recognised brandsin the world.

UpstreamShells upstream businesses explore for and extract oiland natural gas, and build and operate the infrastructurenecessary to deliver these hydrocarbons to market.In most countries we partner in joint venture operations.

Exploration & ProductionOur Exploration & Production business searches for and recovers oil and naturalgas around the world and is active in more than 38 countries. The majority of theseactivities are carried out in ventures with external partners.

Segment income $14,238m

Gas & PowerOur Gas & Power business liquefies and transports natural gas and develops naturalgas markets and related infrastructure. It also markets and trades natural gas andelectricity, and converts natural gas to liquids to provide clean fuels. A number of newopportunities are also emerging for application of our proprietary coal gasificationprocess. The majority of activities, in particular LNG, are carried out together withassociated companies or joint ventures.

Segment income $1,573m

6 Royal Dutch Shell plc

Our business strategy is more upstreamand profitable downstream.

Did you know? upstream

> Shell is one of the worlds largest natural gas producersand suppliers of LNG, with leading positions in the keymarkets of Asia Pacific and Europe.

> Shells deepwater field in Bonga, Nigeria has one of theworlds largest Floating Production Storage and Offloadingvessels at 300 metres long and 75 metres wide.This equates to the combined length of three footballfields which are 12 storeys high.

WHO WE AREAND WHAT WE DO

DownstreamShells downstream businesses engage in refining crudeoil into a range of products including fuels, lubricantsand petrochemicals. The Group operates the worldslargest single branded retail network.

Oil ProductsThe Oil Products organisation is comprised of a number of different downstreambusinesses, which include Manufacturing, Supply and Distribution, Retail, Business toBusiness (B2B), and Lubricants. Collectively these businesses refine, supply, trade andship crude oil products around the world and market fuels and lubricants for domestic,industrial and transportation use.

Segment income $9,982m

ChemicalsOur Chemicals companies produce and sell petrochemicals to industrial customersglobally. The products are widely used in plastics, coatings and detergents, which inturn are used in products such as fibres and textiles, thermal and electrical insulation,medical equipment and sterile supplies, computers, lighter and more efficient vehicles,paints and biodegradeable detergents.

Segment income $991m

Other industry segments and CorporateOther industry segments include Renewables andHydrogen. Renewables develops businesses based onrenewable sources of energy, including wind and solarpower and is researching options for carbon captureand storage. Hydrogen develops business opportunitiesin hydrogen and fuel cell technology.

Renewables and HydrogenShell aims to develop at least one alternative energy source such as wind, hydrogenor advanced solar technology into a substantial business.

CorporateCorporate is a non-operating segment consisting primarily of interest expense on debt,and certain other non-allocated costs.

Segment loss $523m

Who we are and what we do 7

Did you know? downstream

> Shells refinery operations process some 4 million barrelsof crude oil per day.

> Our distribution network currently includes 5,000 milesof pipeline in the US and some 20,000 trucks worldwide.

> Shells aviation business supplies 1,100 airports in90 countries and fuels some 20,000 aircraft and suppliesover 80 million litres of fuel every day.

> Our NEODOL alcohols are now being used inleading brands of liquid soap, bodywashes, shampoosand creams. The size and density of bubbles createdby different NEODOL products can be critical in helpingour customers develop more successful shampoo andsoap formulations.

> The Nanhai petrochemicals complex in China is thelargest Sino-foreign joint venture. Chinese demand forplastics, packaging and fibres is expected to makeup 30% of world consumption by 2010.

INDUSTRYOVERVIEW

World economyGlobal economic output grew by 4.5% (in realterms) in 2005, from a peak of 5.1% in 2004.We are expecting growth to slow to around 4.4%in 2006 with US growth around 3.4% and amoderate increase in Europe to 1.8%. The positivemomentum in Japan is likely to continue, withgrowth rates of around 2.0% while Chinas economy,although expected to remain strong, is expectedto reduce moderately to around 8.0% in 2006.

Oil and natural gas pricesOil prices were substantially higher in 2005 thanin 2004 driven by a number of factors includingthe effect of hurricanes Rita and Katrina,geopolitical tensions in the Middle East andsupply concerns from limited spare OPEC crudeproduction capacity. Average Brent and WestTexas Intermediate crude prices in 2005 were$54.55 a barrel, compared with $38.30 in2004 and $56.60 a barrel, compared with$41.50 in 2004 respectively.

Based on internal Group analysis, oil prices areexpected to remain strong in 2006 against ongoingsupply concerns. The eventual level will be stronglyinfluenced by the pace of economic growth in theUS and China, OPEC supply policy in the faceof high global oil stocks and the severity of thenorthern hemisphere winter. In the medium to longerterm, the Group anticipates that prices will reduceas stocks and OPEC spare capacity is rebuilt.

Increased demand caused Henry Hub natural gasprices in the US to increase by over 50% in 2005to $8.80 per million British thermal units (Btu)(2004: $5.87). Prices are expected to ease in2006 as supply recovers from hurricane-relateddisruptions but are expected to remain abovehistorical levels. Prices in other markets areexpected to remain largely linked to oil prices.

Natural gas prices in continental Europe and Asiaare predominantly indexed to oil prices and areexpected to remain high relative to recent historicalprices. Shell LNG is primarily sold through associatecompanies, with prices closely related to industryaverages. Prices in Europe and Asia Pacific areexpected to remain high, relative to recent historicalprices, reflecting a firm oil price outlook.

General industry factorsDemand for oil and natural gas is expected tocontinue to increase in both the short and mediumterm with significant new investment needed acrossthe industry to meet that demand. Strong growthis expected in emerging economies such as Chinaand India, although sustained high crude andrefined products prices may temper demand inthe medium term.

The refining and marketing environment ischaracterised by intensifying competition,tightening product specifications in key markets,cyclical investment patterns, and shifting productpreferences in the consumer sector. Traditionalmarkets in western Europe and the US areexperiencing a slowdown in demand growthwhile markets in Asia Pacific are seeing it growsignificantly. Refining margins were strong in2005 and are expected to remain firm in 2006but will continue to reflect developments in theglobal economy.

The business environment for chemicals becamemore positive in 2005 resulting in increasedmargins with growth being driven by the level ofglobal economic activity but profitability is likelyto remain cyclical.

> Oil prices were over 50% higherin 2005 than in 2004 and areexpected to remain strong in 2006due to strong demand and pressureon supply, and will be stronglyinfluenced by the pace of economicgrowth in the US and China.

> Henry Hub gas prices in the US alsoincreased by over 50% in 2005but are expected to ease in 2006.

8 Royal Dutch Shell plc

Our strategy in action 9

Our business strategy of moreupstream and profitable downstreamis helping Shell to play its part inmeeting the challenge of supplyingthe worlds growing demand forenergy in an efficient, profitableand sustainable way.

Meeting the energy challengeWe are working to secure more oil and gasresources; applying technology to ensure we doso effectively and in environmentally and sociallyresponsible ways; while, at the same time,developing viable renewable energy sources.We are reshaping our portfolio in order to securethe opportunities from growing energy demandand we are changing our organisation andculture so that we can successfully meet thechallenges ahead.

Delivering on our strategyThe implementation of our business strategy of moreupstream and profitable downstream is reinforcingShells position as a leader in the industry and asa Group which provides investors with a competitiveand sustained total shareholder return.

Our 2005 results demonstrate a strong operationalperformance across our businesses and provide uswith a robust platform to build on.

We have announced an increase in capitalinvestment to support that strategy and, in 2006,we plan to spend a total of $19 billion, of which$15 billion will be invested in upstream projects.This increased investment will be used to grow andmature our resource base; increase production;build on our strong position in integrated gas andunconventional oil such as oil sands; and enhanceour competitive leadership in the downstream.

OUR STRATEGYIN ACTION

> FLOAT ING PRODUCT ION STORAGE AND OFFLOADING VESSEL , BONGA, NIGER IA

OUR STRATEGY IN ACTION

Shell has a varied portfolio of upstream operations in 48 countries.These include: maximising recovery of oil and gas from existing fields,exploration for new resources and the development of new fields aswell as a range of integrated gas developments. Our strategy of moreupstream is helping us to capture the opportunities from growing globaloil and gas demand.

Our Exploration & Production strategy continuesto focus on four strategic themes: existing oil; newmaterial oil; unconventional oil and integrated gas.

In our existing fields, such as those in the UK andUS, we are working to sustain long-term productionand thus benefit from higher prices. We areinvesting in new material oil projects includingthe Kashagan development in Kazakhstan andoffshore projects in Nigeria. We are alsostrengthening our position in unconventional oil,building on the success of the Athabasca OilSands Project in Canada where we are lookingto double production by 2010.

In the last year, we strengthened our positionthrough the addition of 160 thousand squarekilometres of new exploration acreage. This hasgiven us access to frontier areas such as AlaskasBeaufort Sea, and new country entries in Libyaand Ukraine.

Included in the planned upstream investment areprojects in Gas & Power, predominantly in liquefiednatural gas (LNG) such as Sakhalin II, Qatargas 4and expansions of LNG projects in Nigeria andAustralia. These projects are part of the continueddevelopment of our integrated gas business throughselective investment in opportunities across the value

10 Royal Dutch Shell plc

MORE UPSTREAM

$15billionIs the amount that we will be investing in 2006,in upstream oil and gas projects to unlock moreoil and gas and develop our leading positionsin major markets.

> L IQUEF IED NATURAL GAS ( LNG) S I TE , SAKHAL IN, RUSS IA

chain. That strength along the whole gas value chainfrom exploration to marketing will continue to be a key factor in our ability to maintain our globalleadership in natural gas. At the same time, wewill continue to promote our interests in Gas toLiquids (GTL), coal gasification and new opportunitiesin carbon management.

We expect demand for natural gas to continue to increase, with overall gas demand expected to grow at 2-3% per annum in the next 10 yearswhile demand for LNG could grow by about 10%per annum in the coming years. We believe therewill be demand growth in all major natural gasmarkets. We will seek to maximise the opportunitiesfrom that growing demand using the diversity of our natural gas portfolio, our access to leadingtechnology and our expertise across marketing,trading, shipping and project management.

During 2005, we made good progress in deliveringour integrated gas strategy with the expansion ofthe Nigeria LNG plant and the startup of the newQalhat LNG project in Oman. In Australia, theexpansion of the North West Shelf plant with theaddition of a fifth train was agreed and constructionbegan on our seventh LNG project, Qatargas 4.

We are also taking further steps to develop newopportunities in the gas business. This includes ourplans to build a 140,000 barrel per day GTLplant in Qatar. This will produce an ultra cleantransport fuel from natural gas that can be used inconventional diesel engines. At the same time, weare continuing to work to promote our interests incoal gasification which uses advanced technologyto provide a cleaner way of using coal.

Improving operational performanceIn our Exploration & Production business we broughta number of projects onstream during 2005, includingthe giant Bonga project in Nigeria, Salym inRussia and E11 in Malaysia. We also maturedseveral projects to final investment decision. Duringthe year, the Sakhalin Energy Investment Companyannounced very substantial cost overruns comparedto earlier estimates. Effective project delivery has become increasingly important as we take on larger and more complex projects. Skilledprofessionals will be vital to effective projectdelivery. We are increasing our capacity throughredeployment of staff and external recruitment,and have set up a Project Academy to providefocused, high quality training and development on all aspects of project management and

implementation. We aim to reduce costs throughimproving management of the supply chain andstandardising our processes globally.

In Gas & Power, the Qalhat and Nigeria LNGexpansion projects were both completed withinShells budget and schedule expectations.

Reshaping the portfolioAn important focus in our strategy is on reshaping our portfolio. Divestments will be made in areas where the Group sees little growthpotential or strategic fit. In 2005, the sale of ourinterest in Gasunies gas transportation assets was completed with net proceeds of $1.7 billion. We exited the InterGen power joint venture anddivested certain Exploration & Production interestsin the UK, Norway and Australia. We signed a Memorandum of Understanding with RussiasGazprom to swap 25% of Sakhalin II to give Shella 50% interest in the Zapolyarnoye-Neocomianfield. Following these successful agreements,more emphasis will be given to swaps. Focusedacquisitions will also be considered, especiallythose that provide price and exploration benefitsand where we can see clear scope for long-termvalue growth.

Our strategy in action More upstream 11

THE SAKHALIN II PROJECT IN RUSSIA AND THE ORMEN LANGE FIELD IN NORWAY WILL HELP US TO MEET THE WORLDS GROWINGDEMAND FOR NATURAL GAS.

> ORMEN LANGE, NORWAY

OUR STRATEGY IN ACTION

Our downstream organisation refines and supplies oil products andpetrochemicals to customers across the world. Our strategy of profitabledownstream means working to sustain strong earnings while buildingprofitable new positions in higher growth markets, especially in theMiddle East and Asia Pacific regions, and maintaining and strengtheningestablished positions in attractive markets.

In 2006, downstream investment is planned atover $4 billion. This will help to support ourstrategy of being the downstream leader in themarkets in which we choose to operate.

A key element in the downstream strategy is workto reshape the portfolio by divesting underperformingassets, making selective investments in manufacturingand marketing to enhance our competitive positionand investing in high growth markets in the East.

We are also working to ensure we maintain Shellsposition as the leading global brand across all thedownstream businesses including maintaining ourfocus on differentiated fuels. Our work on makingcleaner fuels such as biofuels more widely availableis continuing. This includes a new partnership withCHOREN Industries in Germany to construct theworlds first commercial plant that will convertbiomass such as wood chips and straw into highquality synthetic biofuel.

12 Royal Dutch Shell plc

PROFITABLEDOWNSTREAM

> CHEMICALS P LANT, NANHAI , CHINA

500The number of planned new retail sites in China withour partner Sinopec; 200 are already operational.We also expanded our retail business in India andopened our first retail station in Indonesia. All threemarkets have strong growth potential.

Our Chemicals business has continued to focuson delivering bulk petrochemicals to largeindustrial customers. The successful startup of theNanhai plant in southern China has establishedour presence in this very fast-growing market.We have also worked to maintain our strongasset base in North America and Europe. Furthergrowth opportunities are being developed includingplans for major new petrochemicals plants inSingapore and Qatar.

Meeting growing global demand for energy inways that minimise the effect on the environmentis a key challenge for the future of our businessand our aim is to create at least one alternativeenergy, advanced solar, wind or hydrogen intoa substantial business.

Improving operational performanceOur work to improve operational performancehas continued. Despite the particular challengesof dealing with the effects of the hurricanes in theGulf of Mexico, we saw continued improvementsin performance at our refineries and manufacturingsites. We are continuing to make good progress inmaximising the benefits of combining our Oil Productsand Chemical businesses into one downstreamorganisation. This has helped us to improveperformance, reduce costs by sharing servicesand to spread best practice more effectively.

We have also been able to standardise andsimplify our processes and systems in Oil Productsbusinesses across the world. This is helping todrive further performance improvements and isproviding customers with a more streamlinedand efficient service.

Reshaping the portfolioDuring 2005, we made further progress withour programme to reshape the portfolio and totalproceeds from divestments were over $3 billion.Our portfolio activities were focused on investmentin high growth markets in the East and Turkey.In Turkey, a joint venture to combine our marketingand distribution activities with Turcas Petrol AS wasagreed. In addition, as part of Turkeys privatisationprogramme, Ko (Turkeys largest conglomerate)became the successful bidder for 51% of TurkiyePetrol Rafinerileri AS (Tupras) and we acquireda 2% minority shareholding in Tupras. In China,our retail joint venture with Sinopec commencedoperations with more than 200 stations nowin service. Eight service stations are currentlyoperating in India, with another 50 under variousstages of construction and acquisition. Wealso opened our first retail station in Indonesia.In Chemicals, our plans for new plants in Singaporeand Qatar will help us secure opportunities forgrowth in the markets of the Asia Pacific region.

Our strategy in action Profitable downstream 13

THE NANHAI PETROCHEMICALS PLANT AND THE DEVELOPMENTOF RETAIL STATIONS IN CHINA UNDERLINE OUR COMMITMENTTO INVESTING IN THE GROWING MARKETS OF THE EAST.

> RETA I L STAT ION, SUZHOU, CHINA

OUR STRATEGY IN ACTION

We have made significant progress in changing our culture and organisationto ensure that we can deliver our strategy. The Unification of the parentcompanies under Royal Dutch Shell plc in 2005 has provided us witha clearer, simpler, more efficient and accountable form of governance.

The Chief Executive now reports to a single Boardcomprising 10 Non-executive Directors and fiveExecutive Directors and a key advantage of thissingle, smaller Board is that it provides a very clearand direct line of accountability to shareholders.

Royal Dutch Shell now has a single headquartersin The Hague (the Netherlands). The centralisationof a number of activities in the headquarters ishelping to reduce duplication and helping us tooperate in a more streamlined and efficient way.The structural changes are also helping to reinforceour work to simplify and standardise many of ourbusiness processes. In particular, the integrationof the Oil Products and Chemicals businessesinto one downstream organisation has so farbeen very successful in creating a more dynamic,responsive and effective organisation. We haveseen particular benefits at sites which containboth refineries and chemicals manufacturing plants.By sharing services and integrating their activitieswe can operate much more efficiently. It alsomeans we have been able to share and adoptbest practice more quickly and so improveoperational performance.

14 Royal Dutch Shell plc

CREATING THE CULTUREAND ORGANISATIONTO DELIVER

> VIRTUAL REAL I TY CENTRE, EP ICENTRE, R I J SWI JK , THE NETHERLANDS

We are also working to ensure that the way weare organised supports and develops our ability to integrate our projects across the whole valuechain from initial exploration through to deliveringthe product to customer. One example of thisintegrated approach is the deepwater Bonga fieldoff the coast of Nigeria. Gas from the field issupplied to the Nigeria LNG plant at Bonny whereit will be liquefied and shipped to customers in thegrowing markets of Europe and North America.

Reshaping the portfolioOur target of raising $12-15 billion in divestmentproceeds for the period 200406 has beenachieved a year ahead of schedule. In the future,we expect to see a lower level of divestment asthe focus of the strategy moves to swaps andacquisitions that can create value such as thosethat add to reserves of oil and gas and those thatcan complement established positions in attractivemarkets or build positions in new markets. This willallow us to secure superior returns from upstreamoperations in a higher price environment while,at the same time, developing opportunities that will play a key role in sustaining our success in the long term.

Technology and innovationDeveloping and implementing new technology plays a key role in maintaining the competitivenessof our existing business activities and in helping usto secure new business opportunities.

New technology plays a particularly important role in helping us to find new resources and in maximising the recovery of oil and gas from existing resources. It is also fundamental to realising the potential of unconventionalhydrocarbons and of new transportation fuels.Equally it will be a significant element in our work to develop ways of managing the CO2emissions related to energy production and use.The appointment of a senior manager to leadthis work underlines our commitment to driving thedevelopment of technical solutions in this area.

We have recognised the importance of havingthe skilled professionals in place to meet theenergy challenges ahead and have recruited more than 1,000 additional engineers over the past year. We have also appointed eight Chief Scientists who will lead our technologicaldevelopments within their fields of expertise.

In future, new oil will be more difficult to find andto produce. We will have to meet new challengesof working in ultra deep water and Arctic regionsand producing unconventional resources such asheavy oil, tar sands and oil shales. Shells researchand development effort is focused on developingnew innovative technologies and providing technicalsolutions to these challenges.

Technology will also play a part in increasingrecovery from our existing assets. We continue to work on the development and deployment of enhanced oil recovery technologies that canextend field life.

New technology is enabling us to reach previouslyinaccessible or uneconomic hydrocarbon resources.A recent example is the Champion West fieldoffshore Brunei, where application of Smart Fieldtechnology allowed the production of oil and gasin several small reservoirs. These reservoirs weretoo small to be economical individually but becausethey can now be accessed from a single well, unitdevelopment costs have been reduced, making thedevelopment viable.

Our strategy in action Creating the culture and organisation to deliver 15

THE VIRTUAL REALITY CENTRE AND OUR ADVANCED FUELSLABORATORY SHOW THE RANGE OF WORK WE UNDERTAKE TO DEVELOP AND APPLY NEW TECHNOLOGY ACROSS OUR BUSINESS.

> RESEARCH LABORATORY, AMSTERDAM, THE NETHERLANDS

MEETING THE ENERGY CHALLENGEWe believe that oil and gas will be integral to meeting the growing global energy demand for many decades to come.We work to provide those resources in a profitable and environmentally and socially responsible way, at the same time as developing more efficient and sustainable energy sources. We set out below some examples of this work.

The development of the Bonga field willrepresent an increase of around 10% inNigerias oil production.

The field is situated 120km off the coast of Nigeria, in water depths of more than1,000 metres. Bonga is Nigerias firstdeepwater oil production and has reinforcedShells leading position in this area.

From its initial discovery to start of production,Bonga has benefited from the application ofa range of pioneering technology and Shellsexpertise in deepwater operations.

Its floating production storage and offloadingvessel is one of the largest in the world and production is expected to ramp up tomore than 200 thousand barrels of oil per day in 2006.

The successful completion of this project willallow Shell to play its part in meeting Chinasincreasing demand for petrochemicals.

The Nanhai petrochemicals complex insouthern China was completed within theexpected schedule and budget. This is thelargest joint venture ever undertaken in Chinawith a total investment of $4.3 billion byShell and the Chinese National Offshore Oil Corporation.

When operating at full capacity the plant will produce 2.3 million tonnes ofpetrochemicals per annum to supply marketsin the Guangdong Province and southeast coastal China and is expected to generate$1.7 billion of sales every year.

The project has been completed on time and on budget and was developed in accordance with our commitment tosustainable development, ensuring thatenvironmental and social impacts wereeffectively managed.

We are committed to developing cleanertransport fuels and are investing in thetechnology to produce advanced biofuels.

Shell is investing in a range of technologiesto develop future fuels that provide motoristswith better environmental and vehicleperformance.

These include a partnership, agreed in2005, with CHOREN Industries GmbH in Germany to construct the worlds firstcommercial plant that converts biomass suchas wood chips and straw into high qualitysynthetic biofuel.

This process uses technology developed byShell to create Gas to Liquids transport fuel.The resulting renewable biofuel is muchcleaner than conventional diesel, with muchlower greenhouse gas emissions, and it canbe used as pure product or as a blendwithout the need to modify vehicle engines.

16 Royal Dutch Shell plc

BONGA, NIGERIANANHAI, CHINAINVESTING IN BIOFUELS

> PETROCHEMICALS P LANT, NANHAI , CHINA> FLOAT ING PRODUCT ION STORAGE AND OFFLOADING

VESSEL , BONGA, NIGER IA> RESEARCH LABORATORY, AMSTERDAM,

THE NETHERLANDS

Meeting the energy challenge 17

The Sakhalin II project in the far east of Russia is one of the worlds largest integratedoil and gas projects. It is one of the mostchallenging energy projects ever undertakenand is a key part of Shells upstream strategy.Operating in waters that are frozen for sixmonths of the year, it will supply oil and gasfrom two offshore fields via 800km of pipelineto an oil export terminal and a LNG plant.

Project cost estimates have doubled to$20 billion since the go-ahead in 2003,reflecting the challenging environment and the market escalation as well as initialunderestimation. The project will developsome 4 billion boe oil and gas resources at a development cost of some $5-6 per barrelof oil equivalent (boe), including the LNGplant. During 2005, the concrete gravitybase structures for both platforms weresuccessfully installed and phase 2 of theproject was well over 50% complete by the end of the year.

The first shipments of LNG from Sakhalin to customers in Asia and North America are expected in 2008.

Shell is developing a range of projects tomeet rising global demand for LNG includingexpanding its operations in Nigeria.

Nigerias LNG plant at Bonny, in which Shellhas a 25% share, is Africas largest singleindustrial operation. It started operation in1999 and since then has supplied more than500 cargoes to customers in Europe.

In early 2006, construction of a two trainexpansion was completed, bringing the totalcapacity of the plant to 17 million metrictonnes per annum. A sixth train is now plannedto be completed in 2007.

This expansion will supply LNG to newcustomers in the growing markets of NorthAmerica as well as play a key part in making progress towards the elimination of environmentally damaging gas flaring.

Through our joint venture with Sinopec weare gaining new customers in Chinas rapidlygrowing retail fuels sector.

During 2005, Shell and Sinopec beganoperations in Jiangsu province in easternChina. We have taken over the operation of more than 200 of Sinopecs existing retail stations which have been rebrandedand redeveloped.

Our plans are to operate a total of 500 sites in the region, including both Sinopecsexisting service stations and new outlets insome of the provinces rapidly growing cities.

This venture is one element in Shells overall strategy of building a presence in the growing markets of the East and, during the past year, we have also opened our first retail stations in India and Indonesia.

SAKHALIN IINIGERIA LIQUEFIED NATURAL GAS NEW RETAIL STATIONS IN CHINA

> TEST ING OF CRUDE OI L , BONNY IS LAND TERMINAL , N IGER IA > RETA I L S I TE , SUZHOU, CHINA > LNG S I TE , SAKHAL IN, RUSS IA

SUMMARY OPERATING AND FINANCIAL REVIEW

SUMMARY OF GROUP RESULTS

Peter Voser Chief Financial Officer

The Groups income reflects higher realised oiland gas prices and strong underlying performancein all segments.

Earnings $26,261 millionHydrocarbon production 3,518

thousand boe per dayCapital investment $17.4 billion

2005 compared to 2004The Groups net income in 2005 was $26.3 billion,an increase of 36% from 2004. These earningsreflect higher realised oil and gas prices inExploration & Production and higher LNG volumesand prices in Gas & Power, as well as increasesin refining margins and trading profits in OilProducts and higher margins in Chemicals.

Exploration & Production earnings were $14,238 million, 45% higher than in 2004.Production in 2005 was broadly unchangedcompared to 2004, excluding the impact ofdivestments, price effects and hurricanes in theGulf of Mexico. The decline in production inmature areas was largely offset by the start ofproduction in new fields. Hydrocarbon prices were higher in 2005 compared with 2004 (seethe Industry Overview on page 8 for more details),reflecting the effect of strong US and Chinesedemand, geopolitical uncertainty in a number of producer countries, disruptions to production as a result of the hurricanes in the Gulf of Mexicoand lower OPEC spare production capacity. Thebenefits of higher oil and gas prices were partlyoffset by lower hydrocarbon production, highercosts and depreciation.

Earnings in Gas & Power were $1,573 million,13% lower than in 2004. Earnings in 2005included net charges of $84 million mainly relatingto divestments (InterGen). Earnings in 2004reflected net gains of $444 million also mainlyrelated to divestments. Excluding these non-operational items earnings were 21% higher,benefiting from higher LNG prices and volumesand more favourable marketing and tradingconditions. LNG sales volume was up 5%.

Oil Products earnings increased by 31% comparedwith 2004 to $9,982 million, benefiting significantlyfrom higher refining margins, improved operationalperformance and increased trading earnings. Theseresults included divestment gains of $427 million.

Earnings in Chemicals were $991 million, after a loss from discontinued operations of $307 millionfrom an impairment and charges associated with the divestment of the polyolefins joint venture Basell.In 2004, earnings of $1,148 million included aloss from discontinued operations of $199 millionfrom an impairment of the investment in Basell of $353 million. The reduction in earnings fromcontinuing operations relative to 2004 wasattributable mainly to higher costs, partly offset by higher margins.

Capital investment1 in 2005 was $17.4 billioncompared with $15.3 billion in 2004. Grossproceeds from divestments were $6.6 billion and cash flow from operating activities was $30.1 billion, an increase of 13% from 2004. At the end of 2005, the total debt ratio2 was11.7% compared with 13.8% in 2004. Cash andcash equivalents were $11.7 billion comparedwith $9.2 billion in 2004.

Group research and development (R&D) programmesare carried out through a worldwide network oflaboratories, with major efforts concentrated in theNetherlands, UK and US. Other laboratories arelocated in Belgium, Canada, France, Germany,Japan and Singapore. Group companies R&Dexpenses (including depreciation) were $588 millionin 2005 (2004: $553 million).

UpstreamExploration & Production

Malcolm Brinded Executive Director, Exploration & Production

In 2005, we met our production target anddelivered record cash flows. We are wellpositioned for future growth, building on ourstrong project portfolio and exploration success.

Segment earnings $14,238 millionHydrocarbon production 3,518

thousand boe per dayCapital investment $10.8 billion(excluding $1.3 billion minority partners contribution in Sakhalin)

Earnings and investmentEarnings in 2005 increased by 45% to $14,238million mainly reflecting higher oil and gas prices.Divestment gains such as from the sale of ourinterest in Gasunies gas transportation assets in the Netherlands contributed $1.7 billion to this total.

We invested around $10.8 billion in capital in our projects, in accessing new resources and onour technical programme. This amount was 25%higher than our 2004 investment of $8.6 billion.

Exploration and productionExploration and new business development madea significant contribution to our overall acreagepositions with new exploration licences in Algeria,Australia, Brazil, Cameroon, Canada, the FaroeIslands, Kazakhstan, Libya, Malaysia, Nigeria,Norway, the Republic of Ireland, the UK and the US. Some 145 thousand square kilometres of new exploration acreage was added in these 14 countries. Globally, we added a total of 160 thousand square kilometres.

We met our target to produce 3.5 million barrelsof oil equivalent every day during 2005 despitelosing some 85 thousand barrels of oil equivalentper day during the hurricanes in the Gulf of Mexico.

We participated in 93 successful exploratory wells(including appraisal wells) and achieved our target

18 Royal Dutch Shell plc

1 Capital investment is capital expenditure, exploration expense and new investments in equity accounted investments.2 The total debt ratio is defined as short-term plus long-term debt as a percentage of capital employed. Capital employed is Group total

assets minus total liabilities before deduction of minority interests, plus short-term and long-term debt.

of drilling or participating in 15 big cat prospects.Three of these were still drilling at the end of theyear and of the 12 completed, hydrocarbons werefound in seven.

Capital investment and portfolio actionsWe started production from the deepwater Bongafield in Nigeria. A total of $3.6 billion has beeninvested in the project that is expected to reach a production of over 200,000 barrels of oil perday in 2006.

In Russia, we secured extended production licencesfor two of the Salym fields in western Siberia andcommercial production started at West Salym, thelargest of the fields. Total investment in developingthe three Salym fields and associated infrastructurewill be $1.25 billion.

At Sakhalin II, one of the worlds largest integratedoil and gas projects, phase 2 was 60% completeby the end of 2005. During the year, SakhalinEnergy Investment Company announced that Phase 2project investment costs were now estimated at$20 billion. This represents very substantial costoverruns compared to earlier cost estimates. Saleshave been secured for the majority of the projectsLNG production with customers in Asia and NorthAmerica. First deliveries from the project areexpected in the summer of 2008.

In Malaysia, first gas was produced from theShallow Clastics field, which, once fully developed,will produce 430 million standard cubic feet perday into the E11 hub integrated gas project.

Our interest in the Gorgon LNG project in Australiawas increased and the project has now moved into the front-end engineering and design phase.Agreement was reached to further develop theChangbei gas field in China in a joint venture with PetroChina. The development is expected to startdelivering 1.5 billion cubic metres of gas a year(53 billion scf) in 2007 and, when operating at full capacity, will produce 3 billion cubic metresof gas a year (106 billion scf).

We established or expanded our positions in anumber of countries with a view to increasing ourresource base. This included increasing our equityinterest in the North Caspian Sea productionsharing agreement, which includes the Kashaganproject in Kazakhstan, from 1.85% to 18.52%.We signed a cooperation agreement with NationalJoint Stock Company Naftogaz Ukrainy to carryout seismic data acquisition and to drill exploration

wells in the Dnieper-Donets basin in the Ukraine.Total initial investment by Shell will be some $100million over three years. We also reached agreementwith the Libyan National Oil Corporation for explorationrights in the Sirte Basin and seismic work is nowunderway, with drilling expected to start in 2007.

We completed the divestment of the Laminaria andCorallina fields in Australia; the Schooner and Ketchfields in the UK, and of our interests in the Gasuniegas transportation network in the Netherlands.

UpstreamGas & Power

Linda Cook Executive Director, Gas & Power

Shells Gas & Power business continued tobenefit from its leading position in a strongbusiness environment during 2005. We are wellon track to deliver strong growth throughout theremainder of this decade.

Segment earnings $1,573 millionLNG sales volume (tonnes) 10.7 millionCapital investment $1,602 million

EarningsEarnings in Gas & Power were $1,573 million in2005 compared with $1,815 million last year.Earnings in 2005 included net charges of $84 millionwhereas 2004 included net gains of $444 million;these were mainly related to divestments. This yearsearnings reflected the sale of record volumes of LNG,which were 5% higher than last year, as well as highprices and favourable marketing and trading conditions.

Capital investment and portfolio actionsTotal capital investment in 2005 was $1,602 million compared with $1,633 million in 2004. This was mainly related to our LNG and Gas to Liquids (GTL) development projects.

During the year, we made progress on a number of major LNG developments. This includes theQatargas 4 joint venture (Group interest 30%) withQatar Petroleum, which moved into construction

phase with the award of the onshore engineering,procurement and construction contract.

This integrated upstream and LNG project willinclude a 7.8 million tonnes per annum (mtpa)liquefaction plant. We expect the majority of theplants customers will be in the US and we plan to supply that market through additional capacitywe have acquired at the Elba Island LNG importterminal in Georgia, USA.

In Australia, there was major progress with anothersignificant project, the Gorgon joint venture (Groupinterest 25%). This integrated LNG development, onBarrow Island in Western Australia, will provide a newLNG plant that will have an initial capacity of 10mtpa.Also in Australia, final investment decision was takento build a fifth LNG liquefaction unit (or train), in theNorth West Shelf LNG venture (Group interest 22%).The new train, currently under construction, willincrease plant capacity to a total of 15.9mtpa.

In Nigeria, production started at the two trainexpansion of the Nigeria LNG Ltd (Group interest26%) facility. These two trains increase NigeriaLNGs overall production capacity to over 17mtpa.A further 4mtpa of capacity will be added from a sixth train which is currently being constructed. In another development in Nigeria, a ProjectDevelopment Agreement was signed in February2006 with the Nigerian National PetroleumCorporation (NNPC) and other partners for thejoint development of a greenfield LNG projectOlokola in western Nigeria.

In the Middle East, production started at theQalhat LNG joint venture project in Oman (Groupindirect interest 11%). In India, another market withgrowth potential, the LNG regasification terminalat Hazira (Group interest 74%) began operations.

In 2005, further contracts were signed to supply LNG from the Sakhalin II project (Group interest 55%) to customers in Korea and Japan. Total firm salesagreements from Sakhalin now amount to 7.3mtpa,more than 75% of the total capacity of the plant.

The US Maritime Administration gave approval for our offshore Gulf Landing LNG terminal. Theterminal will be located in the Gulf of Mexico,some 38 miles off the Louisiana coast.

A joint venture agreement was signed with ERG Power and Gas S.p.A in Italy to build aregasification terminal in Sicily that is expected to have an initial capacity of 5.8mtpa.

Summary operating and financial review 19

SUMMARY OPERATING AND FINANCIAL REVIEW

Our overall equity LNG production capacityincreased by 13% during 2005 to 12.4mtpa at the end of the year. This is in line with our aimof increasing our LNG production capacity by an average of 14% a year in the period from2004 to 2009.

We also continued to develop our interests in GTLand coal gasification. The Pearl GTL project inQatar awarded a project management contract to JGC and Kellogg. The Pearl project includes thedevelopment of upstream gas production facilitiesand the construction of the worlds largest GTLplant that will produce 140,000 barrels per dayof GTL products. These products have a range of uses including as ultra clean transport fuels that can be used in conventional diesel engines,and which can play a part in reducing local air pollution.

Our coal gasification technology was licensed to Datang International Power for its coal topropylene project in China. It was also selectedby the Stanwell Corporation in Australia for a research study for an integrated gasificationcombined cycle (IGCC) plant, in which coal isconverted into synthesis gas for power productionand the carbon dioxide generated is captured and sequestered.

DownstreamOil Products

Rob Routs Executive Director, Oil Products & Chemicals

We have made great progress towards achievingour goal of sustainable downstream leadership.We strengthened our position in key markets and we reshaped our portfolio and increasedour investment in higher growth markets in Asia and Eastern Europe.

Segment earnings $9,982 millionCapital investment $2.8 billion

EarningsFull year segment earnings in Oil Products were$9,982 million compared with $7,597 million in2004, including divestment gains of $427 million.The increase in earnings reflected strong refiningmargins, improved operational performance andhigher trading profits. Net sales proceeds weresignificantly higher, largely as a result of higherproduct prices. Trading earnings benefited fromhigh levels of volatility and profitable storage deals.

Capital investment and portfolio actionsCapital investment of $2.8 billion in 2005 wasconsistent with spending in 2004.

During 2005, we opened a number of new retailsites in growth markets. In China, the joint venturewith Sinopec now has more than 200 servicestations in operation in Jiangsu province. We alsolaunched another new joint venture, Anji Jiffy LubeAutomotive Services Company Limited. The ventureplans to build a network of fast car maintenanceand service outlets modelled on the Jiffy Lube chainthat operates in North America and aims to have600 outlets in operation by 2015.

In India, we were the first international oil companyto secure a nationwide retail licence and eightservice stations are currently operating, with another50 at various stages of construction and acquisition.We also opened our first service station in Indonesia.Our acquisition programme in Russia continuedand we now have 13 service stations in operationand have secured land for an additional 20 sites.

A Memorandum of Understanding was signed with Kuwait Petroleum International to exploreopportunities to develop and implement jointdownstream investments worldwide. In the US, a capital expenditure strategy to increase refiningcapacity at one or more of the Motiva joint venturerefineries was announced.

Shell is the worlds largest marketer of biofuelsand a leading developer of advanced biofuelstechnologies. During 2005, we entered apartnership with CHOREN Industries GmbH whichwill work towards the construction of the worldsfirst commercial facility to convert biomass intohigh quality synthetic biofuel. This is in addition to our existing partnership with Iogen which isproducing cellulose ethanol in Canada from plant waste. We are now working with Iogen and Volkswagen on a joint study to assess theeconomic feasibility of producing cellulose

ethanol in Germany. These advanced biofuels can be used in todays cars and can cut carbondioxide emissions by 90% compared withconventional fuels.

We continued our work to reshape our downstreamportfolio by divesting underperforming assets andmaking selective investments in manufacturing andmarketing in high growth markets. We made anumber of acquisitions to strengthen our position in Turkey which we see as a key growth market.We also completed our announced sale of anumber of interests in retail and commercial fuelsmarketing and distribution businesses in Europe,the Caribbean, Africa and South America. Totalproceeds from divestments were $1.7 billion.

We received bids relating to the sale of our liquidpetroleum gas business and expect to decidewhether to proceed with this divestment during the first half of 2006.

DownstreamChemicalsThe integration of Chemicals into thedownstream business is expected to deliverbenefits through further optimisation ofhydrocarbon streams, standardisation of processes and use of shared services.

Segment earnings $991 millionCapital investment $599 million

EarningsEarnings in Chemicals were $991 millioncompared with $1,148 million in 2004. Theresults in 2005 included $307 million of lossesfrom discontinued operations related to a write-down of the carrying value and charges from thesale of Basell compared with $199 million of net losses from discontinued operations in 2004.

The reduction in earnings from continuingoperations relative to 2004 was attributable mainlyto higher costs partly offset by higher margins.

Capital investment and portfolio actionsIn 2005, capital investment was $599 millioncompared with $868 million the previous year.

The construction of the Nanhai petrochemicalscomplex in southern China was completed withinthe expected schedule and budget at the end of

20 Royal Dutch Shell plc

2005. This complex is a joint venture betweenShell and the Chinese company, CNOOCPetrochemicals Investment limited, and, whenoperating at full capacity, is expected to produce2.3 million tonnes of chemicals a year to supplyChinas domestic market.

We also made progress in developing new projectsto supply the growing markets of the Middle Eastand Asia. We signed a letter of intent with QatarPetroleum to develop a petrochemicals plant at RasLaffan in Qatar. The agreement means work canstart on developing the technical and commercialaspects of the complex and we are planning forproduction to start early in the next decade.

In Singapore, the engineering and design contractswere awarded for a major new plant at the PulauBukom manufacturing complex. This will produceethylene, which is essential to the production ofnumerous petrochemicals. The plant is expected to start operations in 2009 and is plannedin collaboration with the Singapore EconomicDevelopment Board.

During the year, we announced plans to expandthe capacity of the isopropyl alcohol plant atPernis in the Netherlands by 50,000 tonnes peryear. Isopropyl alcohol is used in a range ofproducts including cosmetics, pharmaceuticals and solvents. This expansion will bring improvedefficiency at the plant and will strengthen ourposition in this market. The new capacity isexpected to be available in 2006.

Shell and BASF completed the sale of Basell, their50:50 polyolefins joint venture, to Access Industries.The sale proceeds, after debt, were over $1 billion.We also completed the sale to Basell of our shareof the ethylene plant, along with the butadienebusiness at Berre in France.

Other Industry Segments andCorporateOther industry segments include Renewables and Hydrogen. Renewables works to developbusinesses based on renewable sources of energy,including wind and solar power. Hydrogendevelop business opportunities in hydrogen andfuel cell technology.

Capital investment $345 million

EarningsOther industry segments consists of the combinedresults of the Renewables and Hydrogen businessand Corporate, which is a non-operating segmentconsisting primarily of interest expenses on debtand certain other non-allocated costs. This part ofthe business made a loss of $523 million in 2005compared with a loss of $1,126 million last year.

Portfolio actionsRenewables and HydrogenShell aims to develop at least one alternative energysource such as wind, hydrogen or advanced solartechnology into a substantial business.

We see wind as one of the most promisingsources of renewable energy and we currentlyhave interests in wind projects around the worldwith a total capacity of 350 megawatts.

In 2005, we signed final contracts for theNoordzeeWind project and expect construction to start during 2006. This will be the first Dutchoffshore wind project with 36 turbines and anoverall capacity of 108 megawatts and is a jointventure between Shell and Nuon. We also madeprogress with the London Array wind project. Thisproject, in the outer Thames Estuary, if approved,would have up to 271 turbines and wouldgenerate up to 1,000 megawatts of electricity.

We are also one of the largest wind energydevelopers in the US and we are extending ourpresence in this market by pursuing the acquisitionof development rights for the Mount Storm windpark in West Virginia. We have also madeprogress in securing the appropriate permits for the Cotterel Mountain wind project in Idaho.

In Solar, we have revised our approach to focuson advanced solar panel technology, includingwhat is known as CIS thin film technology, whichis applied to glass in thin layers. We are nowworking with Saint Gobain, one of the worldsleading producers of glass and building materialsto explore its potential further.

During the year, Shell Hydrogen continued its workto promote and support the development of theinfrastructure and technology that will help hydrogenplay its part in meeting future energy needs. Newprojects agreed included an agreement with theTokyo Gas Company to conduct a pre-feasibilitystudy for a combined LNG/Liquid Hydrogen/CO2terminal in Tokyo and with Tongju University to builda hydrogen station in Shanghai.

SUSTAINABLE DEVELOPMENTOne of the main challenges in responding tosocietys rapidly growing demand for energy is the need to work in environmentally and sociallyresponsible ways. Shells work to achieve theseaims is governed by applicable laws as well as the Shell General Business Principles which include a commitment to contribute to sustainabledevelopment. This requires balancing short and long-term interests, integrating economic,environmental and social consideration intobusiness decision-making. This includes givingproper regard to health, safety, security and theenvironment and working to achieve continuousperformance improvements towards our long-termaspirations of causing no harm to people andprotecting the environment.

This is becoming increasingly important as weundertake more very large energy projects, manyof which will present environmental and socialchallenges. These can range from managing a development in an environmentally sensitive area, to working to minimise carbon emissions or ensuring that we make a positive contribution to the communities in which we work by being a good neighbour. Meeting these challengeseffectively will be vitally important in ensuring the future success of our business.

One of those challenges is the need to mitigate theeffect of carbon emissions from meeting growingenergy demand and Shell was one of the firstcompanies to recognise the importance of theneed to take action on climate change. Since1997, we have taken a number of initiatives bothto reduce and manage carbon emissions from ourown activities and to reduce emissions by ourcustomers from the products we supply. Thisincluded setting voluntary targets to reducegreenhouse gas emissions from our own operations.We met the first target in 2002 and reconfirmed the second which requires our greenhouse gasemissions in 2010 to be 5% below 1990 levels.We also continue to improve energy efficiencyat our major downstream operations and arecommitted to ending continuous flaring of naturalgas at oil production facilities. At the same time,we are working to develop carbon capture andstorage technology that can help reduce andmanage emissions from fossil fuels. We are alsodeveloping alternative energies such as wind,advanced solar, hydrogen and biofuels.

Summary operating and financial review 21

SUMMARY OPERATING AND FINANCIAL REVIEW

Another important challenge is establishing an appropriate balance between the need fordevelopment and the conservation of nature. We have a Group Biodiversity Standard, whichensures that the potential impact on biodiversity of any projects is identified at an early stage. It requires plans to be developed to manage those impacts including work with experts andrelevant stakeholders. We have already developedconsiderable practical experience in this area and we are now working to ensure we apply what we have learned in new projects.

An essential element in our commitment tocontribute to sustainable development is improving our relationships with the communities who liveclose to our existing plants. Those communitiessometimes have concerns about the possibleenvironmental impact of our operations and want to ensure that our operations bring economicbenefits to them. We have made good progress at a number of these in establishing effectivedialogues with communities and gain theirconfidence that we are running our facilities safely and in a way that does not harm the local environment.

Every year we measure our environmental andsocial performance in a number of key areas. In 2005, our safety performance improved with a reduction in the number of fatalities in roadaccidents but progress was less good in other areas,reflecting work on major projects in challengingareas. We are now focusing on improvingcompliance with procedures and on changingbehaviour to strengthen our safety culture. Ourenvironmental performance showed progresstowards ending continuous flaring and reducingspills from our operations. More details of Shellssocial and environmental performance can befound in the Shell Sustainability Report.

In all these respects we believe that ourcommitment to sustainable development willcontinue to be a vital element in the future of ourbusiness and will deliver competitive advantagesas we work to meet the energy challenges ahead.

LIQUIDITY AND CAPITAL RESOURCESOverviewIn general, the most significant factors affectingyear-to-year comparisons of cash flow provided byoperating activities are changes in realised pricesfor crude oil and natural gas, crude oil and naturalgas production levels and refining and marketingmargins. These factors are also the most significantaffecting income. Acquisitions and divestments canaffect the comparability of cash flows in the yearof the transaction. On a longer term basis, theability to replace proved reserves that are producedaffects cash provided by operating activities, as well as income.

Reserve replacement will affect the ability of theGroup to continue to maintain or increase productionlevels in Exploration & Production, which in turnwill affect our cash flow provided by operatingactivities and income. We will need to takemeasures to maintain or increase production levelsand cash flows in future periods, which mayinclude developing new fields, continuing to developand apply new technologies and recovery processesto existing fields, and making selective focusedacquisitions. Our goal is to offset declines fromproduction and increase reserve replacements.We currently expect overall production to increase,beginning in 2006, as additional production fromnew projects begins to come onstream.

It is our intention to continue to divest and, whereappropriate, make selective focused acquisitionsas part of active portfolio management. However,the Group does not generally expect that thepurchase and sale of assets in the normal courseof business will have a significant adverse effecton cash flow provided by operating activities. The number of divestments will depend on marketopportunities and are recorded as assets held for sale where appropriate.

Statement of cash flows Cash flow provided by operating activities reacheda record level of $30.1 billion in 2005 comparedwith $26.5 billion in 2004. Income increased to $26.3 billion in 2005 from $19.3 billion in 2004, reflecting higher realised prices inExploration & Production and higher refiningmargins in Oil Products. Additionally, $2.3 billionof cash flows were realised in 2005 through salesof assets (2004: $5.1 billion). Cash flow in 2005

has mainly been deployed for capital expenditure($15.9 billion), debt repayment ($2.7 billion) anddividends paid to shareholders ($10.6 billion).

Financial condition and liquidityCash and cash equivalents amounted to $11.7 billion at the end of 2005 (2004: $9.2 billion). Total short and long-term debt fell $1.7 billion between 2004 and 2005.

Total debt at the end of 2005 amounted to $12.9 billion and the Groups total debt ratiodecreased from 13.8% in 2004 to 11.7% in 2005.

Credit ratingsOn February 4, 2005, Standard & Poors Ratings Services (S&P) downgraded to AA fromAA+ its long-term ratings on the Group. MoodysInvestors Services (Moodys) continues to rate the guaranteed long-term debt of Shell Finance(Netherlands) B.V. and Shell Finance (U.K.) P.L.C,as Aa1. In July 2005, following implementationof the Unification Transaction, S&P and Moodyseach extended the same ratings to debtprogrammes guaranteed by Royal Dutch Shell.

Capital investment and dividendsGroup companies capital expenditure, explorationexpense and new investments in equity accountedinvestments increased by $2.1 billion to $17.4 billionin 2005. Capital investment (excluding the contributionof the Groups minority partners in Sakhalin) in 2006is estimated to be $19 billion, with Exploration & Production continuing to account for the majority of this amount. Royal Dutch Shell currently expects toreturn up to $5 billion to shareholders via buybackof shares for cancellation in 2006. Share buybackplans will be reviewed periodically, and are subjectto market conditions and the capital requirementsof the company. In line with the financial framework,the target for gearing over time in the 2025% rangeremains unchanged, including other commitmentssuch as operating leases, contingent liabilities,retirement benefits and operating cash requirements.

Our first priority for applying our cash is ourdividend, which is declared in euro. We intend to pay quarterly dividends and provide per shareincreases in dividend at least in line with Europeaninflation over time. With the adoption of quarterlydividends in 2005, Royal Dutch Shell, together withRoyal Dutch and Shell Transport prior to Unification,returned $10.6 billion to shareholders in dividendsduring 2005.

22 Royal Dutch Shell plc

People 23

PEOPLE

PeopleDuring 2005, our focus was on supporting theGroups strategy of more upstream and profitabledownstream. This included targeted recruitment ofkey technical staff, greater investment in technicalprofessionalism, and driving the benefits of thesimpler corporate structure.

Resourcing for the futureIn 2005, we recruited more than 700 graduatesand almost 2,000 experienced people from over70 different nationalities, underlining our focus on recruiting from a wider range of countries andregions, especially Asia Pacific and the MiddleEast. Our successful, large-scale recruitment drive for experienced Exploration & Productionprofessionals in 2005 means that Shell is wellpositioned to deliver on the increased level ofinvestment in our upstream business. The recentappointment of Chief Scientists also demonstratesour continued commitment to technical excellence,and confirms the strength of Shells career anddevelopment opportunities for technical staff. We place strong emphasis on local careers andemployee development with 49 nationalitiesrepresented amongst our senior leaders.

Strengthening leadership and deepeningprofessionalismShells ability to capitalise on growth opportunitiesin emerging markets relies on the skills andprofessionalism of our employees. We continue to invest in training and development through a balance of on and off-the-job learning. The establishment of Project and CommercialAcademies will provide new opportunities for staff to develop expertise in these areas. Just as important is the ability to manage changeeffectively, and in 2005 we increased bothresources and capability in support of businesscritical change initiatives. In addition, we arecommitted to the development of leadershipcapability through the integrated cross-businessShell Leadership Development programmes. Theseare delivered through strong partnerships withmajor international academic institutions and in2005, more than 7,000 people with leadershippotential participated in these programmes.

Communication and involvementThe success of our business depends on the fullcommitment of all employees. We encourage theinvolvement of employees in the planning anddirection of their work, and provide them with safe and confidential channels to report concerns.

Employees in all countries where we operate have access to staff forums, grievance proceduresor other support systems. A global Ethics andCompliance Helpline was introduced duringDecember 2005, offering an independent,confidential and anonymous facility for reportingnon-compliance and resolving dilemmas andconcerns. A wide range of methods is employedglobally to communicate and consult withemployees on matters of concern to them and to raise their awareness generally about theperformance of Shell. These methods range fromface-to-face communication, through targeted e-mails and intranet sites to focus groups andwebcasts. The Shell People Survey is conductedevery two years, and asks employees for theiropinions on a number of topics relating to howthey feel about working at Shell. The last survey in 2004 had a 78% response rate and showed an overall satisfaction rate of 64%. The next survey will take place in 2006. We seek to establish andmaintain high quality, direct and open dialogue withemployees. Our staff are represented by collectivelabour agreements, unions and staff councils inmany countries in which the Group has operations.

Diversity and inclusivenessShell has had a long-standing commitment to the integration of diversity and inclusiveness intoevery aspect of our operations and culture. We set explicit expectations for all employees andleaders, underpinned by clear plans and targets.There are three global objectives: improving therepresentation of women in senior leadershippositions to a minimum of 20% in the long term;improving the representation of local people in senior positions in their own countries; andimproving the positive perceptions of inclusiveness in the workplace. At the end of 2005, women in senior leadership positions had increased to9.9%, compared with 9.6% in 2004. In 36% of countries, local nationals fill more than half of senior leadership positions. The Shell PeopleSurvey (2004) reported that 64% of employeesperceived workplace inclusiveness favourably.These results represent good progress, but furtherimprovement is needed to meet our aspirations.

We endeavour to ensure equal opportunity in recruitment, career development, promotion,training and reward for all employees, includingthose with disabilities. All applicants andemployees are assessed against clear andobjective criteria.

Employees by segment(average numbers thousands) 2005

80706050403020100

Exploration & Production Oil ProductsGas & Power

Chemicals Other industry segments and Corporate

Employees by geographical area(average numbers thousands) 2005

35302520151050

The Netherlands UK Other Europe

USA Other Western HemisphereOther Eastern Hemisphere

Employees emoluments($ million) 2005

10,0008,0006,0004,0002,0000

Remuneration Retirement benefitsSocial law taxes

Share-based compensation

SUMMARY D IRECTORS REPORT

24 Royal Dutch Shell plc

The share capital of Royal Dutch Shell was listed on the official list of theUnited Kingdom Listing Authority and was admitted to trading on the LondonStock Exchange, Euronext Amsterdam and (in the form of ADRs) on the NewYork Stock Exchange on July 20, 2005. Prior to July 20, 2005, the sharecapital of Royal Dutch Shell was not listed nor admitted to trading in Londonor elsewhere and Royal Dutch Shell had no operations.

This Summary Directors Report gives information about Royal Dutch Shell fromthe date of its listing on July 20, 2005 although the Summary ConsolidatedFinancial Statements set out on pages 26 to 29 together with other sectionsof this Annual Review contain information in respect of the Group for the full2005 financial year.

Principal activitiesRoyal Dutch Shell is a holding company which owns, directly or indirectly,investments in the numerous companies constituting the Group. The Group isengaged worldwide in all of the principal aspects of the oil and natural gasindustry. The Group also has interests in chemicals and additional interestsin power generation and renewable energy.

Recent developments and post balance sheet eventsSince December 31, 2005 additional purchases of shares have been madeunder the buyback programme. As at March 1, an additional 26,427,974Class A shares (representing 0.4% of Royal Dutch Shells entire issued ordinaryshare capital at December 31, 2005) had been purchased for cancellationat a total cost of $853 million including expenses.

On January 6, 2006, 4,827,974 Class A shares were issued in exchangefor loan notes issued to the remaining public shareholders of Royal Dutch aspart of the Restructuring.

On March 8, 2006, 62,280,114 euro deferred shares were redeemed for0.01 in accordance with the rights attached to those shares.

Financial statements and dividendsThe Summary Consolidated Statement of Income and Summary ConsolidatedBalance Sheet are available on pages 26 and 27.

Board of DirectorsThe Directors of Royal Dutch Shell are Malcolm Brinded, Sir Peter Burt, LindaCook, Nina Henderson, Aad Jacobs, Sir Peter Job, Lord Kerr of Kinlochard,Wim Kok, Aarnout Loudon, Christine Morin-Postel, Lawrence Ricciardi, RobRouts, Maarten van den Bergh, Jeroen van der Veer and Peter Voser. Therehave been no changes to this membership between the year end and thedate of this Annual Review. All of the above have served as Directors ofRoyal Dutch Shell since October 28, 2004. Each of the Directors served asDirectors of either Royal Dutch or Shell Transport for the majority of the periodfrom January 1, 2005 to July 20, 2005.

Election and re-election of DirectorsThe Directors seeking re-election at the 2006 AGM are Lord Kerr of Kinlochard,Jeroen van der Veer, Rob Routs and Wim Kok. Sir Peter Burt is retiring and notstanding for re-election at the 2006 AGM.

Shareholders will also be asked to vote on the election of Jorma Ollila andNick Land as Directors of Royal Dutch Shell, with effect from June 1, 2006and July 1, 2006 respectively.

The terms and conditions of appointment of Non-executive Directors are setout in their letters of appointment with Royal Dutch Shell which, in accordancewith the Combined Code, are available for inspection. No Director is, or was,materially interested in any contract subsisting during or at the end of the yearthat was significant in relation to Royal Dutch Shells business.

Financial risk management, objectives and policiesDescriptions of the use of financial instruments and