“Shell is committed to Raízen as we grow our renewable energy business and our presence in Brazil and Argentina,” said Huibert Vigeveno, Shell’s Downstream Director. “This IPO should help Raízen to grow faster, enabling it to deliver more and cleaner energy to our customers. We believe this IPO is the best way to fund the strategy and provide consistent returns on investment for the joint venture partners and new investors alike.”

Raízen is a global leader in the production of first- and second-generation biofuel from sugar cane1. It is pursuing an ambitious growth strategy, as shown by the recent agreement to acquire Biosev and the integration of Shell’s lubricants business in Brazil into Raízen (both subject to deal completion), and the investment decision to expand Raízen’s second-generation biofuels production capacity. Growing Raízen will also contribute to Shell’s target to become a net-zero emissions energy business by 2050, in step with society.

The Shell-branded retail sites and lubricants business in Brazil and Argentina will continue to be managed by Raízen.

1 Raízen produces first generation ethanol from sugar cane, and it is also the only company in the world to produce second generation ethanol on a commercial scale, reusing bagasse, the fibrous by-product of sugar cane production. Second-generation biofuels such as these are Shell’s primary focus for investment and scaling up biofuels availability. Further information on Raízen’s biofuels production is available on the Raízen website.

Notes to editors

  • Under the IPO, 810,811,000 preference shares have been made available to investors, at a price of R$7.40. The IPO has raised R$6.0bn (USD $1.15bn) to fund Raízen’s growth programme.
  • Following the IPO, and subject to an over-allotment option being exercised and completion of the Biosev acquisition, Shell and Cosan’s equity stake in Raizen will be around 43.5% each, although both will continue to hold 50% of the ordinary voting stock.
  • Raízen was formed in 2011 as a joint venture between Shell and Brazilian energy company Cosan. It is an integrated energy company and leading producer of sugar cane, ethanol and bioenergy in Brazil. It has 26 production units, 860,000 hectares of cultivated agricultural land, a network of more than 7,300 Shell retail stations, 1,300 Shell Select convenience stores and more than 4,000 business customers in Brazil and Argentina. In its most recent financial year, 2020-21, Raízen produced around 2.5 billion litres of ethanol (excluding second generation cellulosic ethanol production – see below).
  • In February 2021, Raízen announced an agreement to acquire Biosev, a leading ethanol producer in Brazil (subject to deal completion). In May 2021, agreement was reached to extend the Retail Brand Licence Agreement between Shell and Raízen, under which retail sites operated by Raízen carry the Shell brand and sell Shell fuels, by 13 more years with options to extend. And in June 2021, agreement was reached for Raízen to acquire Shell’s lubricants business in Brazil (subject to deal completion), and an investment decision was taken on a new second-generation biofuels plant which is due to begin production in 2023 and will add 82 million litres of cellulosic ethanol production capacity per year to Raízen’s current 38 million litres.
  • The São Paulo Stock Exchange, now known as B3 (Brasil, Bolsa, Balcão) is one of the largest exchanges in the Americas. Over 350 companies are listed on the exchange, with a total market capitalization of around $1.08 trillion. B3 is a listed company (B3SA3) and serves as the main integrator for several indexes in the Brazilian Stock Market (Ibovespa, IBrX-50, IBrX, Itag).

Cautionary note

The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities. In this announcement “Shell”, “Shell Group” and “Group” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to Royal Dutch Shell plc and its subsidiaries in general or to those who work for them. These terms are also used where no useful purpose is served by identifying the particular entity or entities. “Subsidiaries”, “Shell subsidiaries” and “Shell companies” as used in this announcement refer to entities over which Royal Dutch Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally referred to as “joint ventures” and “joint operations”, respectively. Entities over which Shell has significant influence but neither control nor joint control are referred to as “associates”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.

This announcement contains the following forward-looking Non-GAAP measure: Adjusted Earnings. We are unable to provide a reconciliation of these forward-looking Non-GAAP measures to the most comparable GAAP financial measures because certain information needed to reconcile the above Non-GAAP measure to the most comparable GAAP financial measure is dependent on future events some which are outside the control of the company, such as oil and gas prices, interest rates and exchange rates. Moreover, estimating such GAAP measures with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort. Non-GAAP measures in respect of future periods which cannot be reconciled to the most comparable GAAP financial measure are calculated in a manner which is consistent with the accounting policies applied in Royal Dutch Shell plc’s consolidated financial statements.

Shell’s operating plan, outlook and budgets are forecasted for a ten-year period and are updated every year. They reflect the current economic environment and what we can reasonably expect to see over the next ten years. Accordingly, Shell’s operating plans, outlooks, budgets and pricing assumptions do not reflect our net-zero emissions target. In the future, as society moves towards net-zero emissions, we expect Shell’s operating plans, outlooks, budgets and pricing assumptions to reflect this movement.

This announcement contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as “aim”, “ambition”, “anticipate”, “believe”, “could”, “estimate”, “expect”, “goals”, “intend”, “may”, “objectives”, “outlook”, “plan”, “probably”, “project”, “risks”, “schedule”, “seek”, “should”, “target”, “will” and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this announcement, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; (m) risks associated with the impact of pandemics, such as the COVID-19 (coronavirus) outbreak; and (n) changes in trading conditions. No assurance is provided that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this announcement are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Royal Dutch Shell’s Form 20-F for the year ended December 31, 2020 (available at www.shell.com/investors and www.sec.gov). These risk factors also expressly qualify all forward-looking statements contained in this announcement and should be considered by the reader. Each forward-looking statement speaks only as of the date of this announcement, August 5, 2021. Neither Royal Dutch Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this announcement.

LEI number of Royal Dutch Shell plc: 21380068P1DRHMJ8KU70

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