Downstream overview

Key milestones

We continued to high-grade our portfolio in 2017, and we continue to look for the right opportunities to grow our Downstream business.

In September 2017, we opened our first Mexican retail service station on the outskirts of Mexico City. Assuming market conditions continue to develop at their current rate, we plan to open more sites in Mexico over the next few years.

We also continued to divest selected assets and restructure parts of our portfolio. In 2017 this included:

• In the USA, the separation of assets, liabilities and businesses of the Motiva Enterprises LLC (Motiva) joint venture took place, in which Shell held a 50% interest (Motiva transaction). Shell assumed sole ownership of the Norco and Convent refineries in Louisiana, 11 distribution terminals and Shell-branded markets in Alabama, Mississippi, Tennessee, Louisiana, a portion of the Florida panhandle, and the north-eastern region of the USA, and received cash in return which was reported in Divestments. This transaction, completed in early 2017, impacts Shell’s ongoing reporting and therefore the comparison with 2016. With effect from May 2017, Shell reports revenue and costs from assets which were previously part of the Motiva joint venture, instead of reporting a share of joint venture profit.
• In the USA, we issued 10.46 million new common units in Shell Midstream Partners, L.P., bringing the total common units issued and outstanding to 187.78 million.
• In Saudi Arabia, we sold our 50% share in the SADAF petrochemicals joint venture located in Al Jubail. The joint venture encompassed six petrochemical plants with a total output of more than 4 million tonnes per year. The sale marked an early termination of the joint venture agreement which was due to expire in 2020. Shell’s other activities in the country are not impacted.
• We completed the sale of our 20% interest in Vivo Energy to Vitol Africa B.V. (Vitol). As part of the transaction, a long-term brand licence agreement was renewed with Vitol to ensure that the Shell brand will remain visible in more than 16 countries across Africa.
• In Australia, we sold our aviation business.
• In Hong Kong and Macau, we completed the first phase of the sale of our LPG businesses to DCC Energy.

The previously agreed sale of A/S Dansk Shell, which included the Fredericia refinery and local trading and supply activities in Denmark, was cancelled.

Downstream CCS earnings and ROACE [A]

$ billion

%

[A] Earnings and ROACE on CCS basis, excluding identified items

Downstream capital investment

$ billion