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Economic performance

Our income in 2012 was around $27 billion and we announced dividends of more than $11 billion for our shareholders. Our net capital investment of around $30 billion will help to build and sustain our business for the future. We also spent $1.3 billion on our research and development programme.

Shell generated $46 billion of cash flow from our operating activities in 2012. This cash is used to fund our capital investment and research and development programme. It also funds our dividend payments to shareholders. Our average reserve replacement ratio, which represents our ability to grow and maintain production, was around 125% over the last five years.

In 2012, the Pearl GTL (gas-to-liquids) plant (Shell interest 100%) in Qatar completed its ramp-up to full production. Pearl can produce 140,000 barrels of oil equivalent (boe) a day of synthetic oil products and 120,000 boe a day of natural gas liquids and ethane for industrial use.

With joint-venture partners we started production at the Caesar Tonga deep-water project in the USA (Shell interest 22.5%) and the Harweel enhanced oil recovery project in Oman (Shell interest 34%). Also with partners, we started producing oil from our deep-water Gumusut-Kakap project (Shell interest 33%) in Malaysia. The Port Arthur refinery expansion project in Texas, USA, came on-stream and will add a capacity of around 320,000 barrels a day (Shell interest 50%). The Pluto LNG plant in Australia (Shell indirect interest 21%) also started production.

We took the final investment decision in 2012 on two natural gas projects in Nigeria that will help to reduce flaring. We also decided to go ahead with the Quest CCS project in Canada that will reduce CO2 emissions from our oil sands operations. Other projects we decided to move forward with were the Tempa Rossa project (Shell interest 25%) in Italy and the Malakai project (Shell interest 35%) in the deep waters off Malaysia, which is expected to produce around 60,000 boe a day at peak production.

Shell’s oil and gas production in 2012 was 3.3 million boe a day, up slightly from 2011. We increased our sales of liquefied natural gas (LNG) by 7% to around 20 million tonnes. Exploration and commercial activities continued to add potential resources, underpinning Shell’s long-term growth plan.

Shell scorecard

In 2012, sustainable development continued to account for 20% of the company scorecard, which helps determine the annual bonus levels for all our employees, including members of the Shell Executive Committee (EC). For the EC in 2012, sustainable development measures were split evenly between Shell’s safety performance and targeted measures covering operational spills, energy efficiency and use of fresh water.