##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20-FAnnual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934For the fiscal year ended December 31, 2002

|                                                                                                                                          |  |                                                                                                                                                      
|----------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------
|Commission file number 1-3788N.V. KONINKLIJKE NEDERLANDSCHE
PETROLEUM MAATSCHAPPIJ
(Exact name of registrant as specified in its charter) |  | Commission file number 1-4039THE SHELL TRANSPORT AND TRADING
COMPANY, PUBLIC LIMITED COMPANY
(Exact name of registrant as specified in its charter)

ROYAL DUTCH PETROLEUM COMPANY(Translation of registrants name into English)

|                                                                                                                                                                                     |  |                                                                                                                                                              
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|The Netherlands                                                                                                                                                                      |  | England                                                                                                                                                      
|(Jurisdiction of incorporation or organisation)
30, Carel van Bylandtlaan, 2596 HR The Hague, The Netherlands
tel. no: (011 31 70) 377 9111
(Address of principal executive offices) |  | (Jurisdiction of incorporation or organisation)
Shell Centre, London SE1 7NA, England
tel. no: (011 44 20) 7934 1234
(Address of principal executive offices)

Securities Registered Pursuant to Section 12(b) of the Act

|                                                                     |  |                          |  |                                                                                                                                                                                                 |  |                          
|-------------------------------------------------------------------- |  | ------------------------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------
|                                                                     |  | Name of Each Exchange    |  |                                                                                                                                                                                                 |  | Name of Each Exchange    
|Title of Each Class                                                  |  | on Which Registered      |  | Title of Each Class                                                                                                                                                                             |  | on Which Registered      
|Ordinary shares of the nominal
(par) value of 0.56 Euro
(0.56) each |  | New York Stock Exchange* |  | New York Shares representing Ordinary shares of the issuer of
an aggregate nominal amount of
£1.50 each and evidenced by
Depositary Receipts
(New York Shares)
Ordinary shares of 25p each*** |  | New York Stock Exchange**

|                                                                                                                                      |  |                                                                                                                                                                                                                                                      
|------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*Also admitted to unlisted trading privileges on the following
Stock Exchanges: Boston, Cincinnati, Midwest, Pacific and Philadelphia |  | **Also admitted to unlisted trading privileges on the following
Stock Exchanges: Boston, Cincinnati, Midwest, Pacific and Philadelphia.
***Not for trading, but only in connection with the listing of New York Shares on the New York Stock Exchange

Securities Registered Pursuant to Section 12 (g) of the Act
None
Securities For Which There is a Reporting Obligation
Pursuant to Section 15(d) of the Act
None

|                                                                                                                                                                                                                                                  |  |                                                                                                                                                                                                                                                                       
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Indicate the number of outstanding shares of each of the
issuers classes of capital or common stock as of the close
of the period covered by the annual report.
Outstanding as of December 31, 2002: 2,099,285,000
ordinary shares of 0.56 each |  | Indicate the number of outstanding shares of each of the
issuers classes of capital or common stock as of the close
of the period covered by the annual report.
Outstanding as of December 31, 2002: 9,667,500,000
Ordinary shares of the nominal amount of 25p each.

Indicate by check mark whether the registrants (1) have filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrants were required to file such reports), and (2) have
been subject to such filing requirements for the past 90 days.
Yes(CHECK) No

Indicate by check mark which financial statement item the registrants have elected to follow.
Item 17(CHECK)
Item 18
Copies of notices and communications from the Securities and Exchange Commission should be sent to:

CRAVATH, SWAINE & MOORE,
CityPoint, One Ropemaker Street, London EC2Y 9HR, England
Attn: William P. Rogers





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##### Table of Contents



Cross Reference Sheet for Annual Report on Form 20-F

Headings* in this Annual Report which relate to:

|                         |  |                                                                              |  |                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                    
|------------------------ |  | ---------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                         |  |                                                                              |  | N.V. Koninklijke Nederlandsche                                                                                                                                                                                                                                |  |                                                                                                                                                                                                                                                    
|                         |  |                                                                              |  | Petroleum Maatsschappij                                                                                                                                                                                                                                       |  | The Shell Transport and Trading                                                                                                                                                                                                                  
|Item number and captions |  | (Royal Dutch Petroleum Company)                                              |  | Company, Public Limited Company                                                                                                                                                                                                                              
|                         |  |                                                                              |  |                                                                                                                                                                                                                                                              
|1                        |  | Identity of Directors, Senior
Management and Advisers                        |  | Not applicable                                                                                                                                                                                                                                                |  | Not applicable                                                                                                                                                                                                                                     
|                         |  |                                                                              |  |                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                    
|2                        |  | Offer Statistics and Expected
Timetable                                      |  | Not applicable                                                                                                                                                                                                                                                |  | Not applicable                                                                                                                                                                                                                                     
|                         |  |                                                                              |  |                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                    
|3                        |  | Key Information                                                              |  | Selected Financial Data Royal DutchDiscussion and Analysis of Financial
Condition and Results of Operations Group
Group  Business and Property risk factors                                                                                               |  | Selected Financial Data Shell TransportDiscussion and Analysis of Financial
Condition and Results of Operations Group
Group  Business and Property risk factors                                                                                
|                         |  |                                                                              |  |                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                    
|4                        |  | Information on the Company                                                   |  | Introduction Parent Companies, GroupDiscussion and Analysis of Financial
Condition and Results of Operations Group
Group  Business and Property
Supplementary Information  Oil and Gas
Introduction Group                                                |  | Introduction Parent Companies, GroupDiscussion and Analysis of Financial
Condition and Results of Operations Group
Group  Business and Property
Supplementary Information  Oil and Gas
Introduction Group                                     
|                         |  |                                                                              |  |                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                    
|5                        |  | Operating and Financial Review
and Prospects                                 |  | Discussion and Analysis of Financial Condition
and Results of Operations Royal Dutch, Group
Group  Business and Property business
environment, description of activities, research                                                                         |  | Discussion and Analysis of Financial Condition
and Results of Operations Shell Transport, Group
Group  Business and Property business
environment, description of activities, research                                                          
|                         |  |                                                                              |  |                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                    
|6                        |  | Directors, Senior Management
and Employees                                   |  | Royal Dutch  control of registrant,
management, share ownership
Note 11 to Royal Dutch Financial Statements Group  Business and Property personnel                                                                                                         |  | Shell Transport  control of registrant,
management, share ownership
Note 10 to Shell Transport Financial Statements
Group  Business and Property personnel                                                                                      
|                         |  |                                                                              |  |                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                    
|7                        |  | Major Shareholders and Related
PartyTransactions                             |  | Royal Dutch  control of registrant                                                                                                                                                                                                                           |  | Shell Transport  control of registrant                                                                                                                                                                                                            
|                         |  |                                                                              |  |                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                    
|8                        |  | Financial Information                                                        |  | Index to Financial Statements and Exhibits
Financial Statements Royal Dutch, GroupSelected Financial Data Royal DutchDiscussion and Analysis of Financial Condition
and Results of Operations Royal Dutch, Group                                           |  | Index to Financial Statements and Exhibits
Financial Statements Shell Transport, GroupSelected Financial Data Shell TransportDiscussion and Analysis of Financial Condition
and Results of Operations Shell Transport, Group                    
|                         |  |                                                                              |  |                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                    
|9                        |  | The Offer and Listing                                                        |  | Royal Dutch  Nature of trading market                                                                                                                                                                                                                        |  | Shell Transport  Nature of trading market                                                                                                                                                                                                         
|                         |  |                                                                              |  |                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                    
|10                       |  | Additional Information                                                       |  | Royal Dutch  Articles of Association, exchange
controls and other limitations affecting security
holders, taxationIntroduction documents on display                                                                                                         |  | Shell Transport  Memorandum and Articles of
Association, exchange controls and other
limitations affecting security holders, taxationIntroduction documents on display                                                                           
|                         |  |                                                                              |  |                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                    
|11                       |  | Quantitative and Qualitative Disclosures about Market Risk                   |  | Discussion and Analysis of Financial
Condition and Results of Operations Group  risk management and internal control, treasury and trading risksSupplementary Information Derivatives and other Financial Instruments and Derivative Commodity Instruments |  | Discussion and Analysis of Financial
Condition and Results of Operations Group 
risk management and internal control, treasury
and trading risksSupplementary Information  Derivatives
and other Financial Instruments and
Commodity Instruments
|                         |  |                                                                              |  |                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                    
|12                       |  | Description of Securities Other
than Equity Securities                       |  | Not applicable                                                                                                                                                                                                                                                |  | Not applicable                                                                                                                                                                                                                                     
|                         |  |                                                                              |  |                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                    
|13                       |  | Defaults, Dividend Arrearages and
Delinquencies                              |  | None                                                                                                                                                                                                                                                          |  | None                                                                                                                                                                                                                                               
|                         |  |                                                                              |  |                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                    
|14                       |  | Material Modifications to the
Rights of Security Holders and Use of
Proceeds |  | None                                                                                                                                                                                                                                                          |  | None                                                                                                                                                                                                                                               
|                         |  |                                                                              |  |                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                    
|15                       |  | Controls and Procedures                                                      |  | Controls and Procedures Royal Dutch                                                                                                                                                                                                                          |  | Controls and Procedures Shell Transport                                                                                                                                                                                                           
|                         |  |                                                                              |  |                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                    
|17                       |  | Financial Statements                                                         |  | Financial Statements Royal Dutch, Group                                                                                                                                                                                                                      |  | Financial Statements Shell Transport, Group                                                                                                                                                                                                       
|                         |  |                                                                              |  |                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                    
|18                       |  | Financial Statements                                                         |  | Not applicable                                                                                                                                                                                                                                                |  | Not applicable                                                                                                                                                                                                                                     
|                         |  |                                                                              |  |                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                    
|19                       |  | Exhibits                                                                     |  | Index to Financial Statements and Exhibits                                                                                                                                                                                                                    |  | Index to Financial Statements and Exhibits                                                                                                                                                                                                         



---

|* |  | Names of the registrants and references to the Royal Dutch/Shell Group of Companies appearing in headings have been abbreviated to Royal Dutch,
Shell Transport and Group, respectively.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





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##### Table of Contents





|N. |  | V. Koninklijke Nederlandsche Petroleum Maatschappij
(Royal Dutch Petroleum Company),
The Shell Transport and Trading Company, Public Limited Company
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                 |                               |      |     |    | 
|-------------------------------------------------------------------------------- | ----------------------------- | ---- | --- | -- | 
|List of contents                                                                 |                               | Page
|                                                                                 |                               |     
|Introduction                                                                     |                               |      |     |   
|A. The Parent Companies                                                          |                               |      | 1   |   
|B. Royal Dutch/Shell Group of Companies                                          |                               |      | 2   |   
|C. Presentation of information                                                   |                               |      | 3   |   
|D. Documents on display                                                          |                               |      | 3   |   
|                                                                                 |                               |     
|Royal Dutch/Shell Group of Companies  Business and Property                     |                               |      |     |   
|A. Activities and major interests                                                |                               |      | 4   |   
|B. Business environment                                                          |                               |      | 5   |   
|C. General development of the business                                           |                               |      | 5   |   
|D. Risk factors                                                                  |                               |      | 6   |   
|E. Description of activities                                                     |                               |      | 7   |   
|                                                                                 | 1. Exploration and Production |      |     | 7  | 
|                                                                                 | 2. Gas & Power                |      |     | 20 | 
|                                                                                 | 3. Oil Products               |      |     | 24 | 
|                                                                                 | 4. Chemicals                  |      |     | 30 | 
|                                                                                 | 5. Renewables                 |      |     | 33 | 
|                                                                                 | 6. Other Activities           |      |     | 34 | 
|                                                                                 | 7. Research                   |      |     | 34 | 
|F. Personnel                                                                     |                               |      | 35  |   
|                                                                                 |                               |     
|Selected Financial Data                                                          |                               |      |     |   
|Royal Dutch                                                                      |                               |      | 36  |   
|Shell Transport                                                                  |                               |      | 36  |   
|                                                                                 |                               |     
|Discussion and Analysis of Financial Condition and Results of Operations         |                               |      |     |   
|                                                                                
|Royal Dutch Petroleum Company                                                    |                               |      | 37  |   
|The Shell Transport and Trading Company, Public Limited Company                |                               |      | 38  |   
|Royal Dutch/Shell Group of Companies                                             |                               |      | 39  |   
|                                                                                 |                               |     
|Royal Dutch Petroleum Company                                                    |                               |      |     |   
|Control of registrant                                                            |                               |      | 58  |   
|Nature of trading market                                                         |                               |      | 58  |   
|Articles of Association                                                          |                               |      | 59  |   
|Exchange controls and other limitations affecting security holders               |                               |      | 62  |   
|Taxation                                                                         |                               |      | 62  |   
|Management                                                                       |                               |      | 63  |   
|Shares under option and share purchase plan                                      |                               |      | 67  |   
|Controls and procedures                                                          |                               |      | 67  |   
|                                                                                 |                               |     
|The Shell Transport and Trading Company, Public Limited Company                |                               |      |     |   
|Control of registrant                                                            |                               |      | 68  |   
|Nature of trading market                                                         |                               |      | 68  |   
|Memorandum and Articles of Association                                           |                               |      | 69  |   
|Exchange controls and other limitations affecting security holders               |                               |      | 72  |   
|Taxation                                                                         |                               |      | 72  |   
|Management                                                                       |                               |      | 73  |   
|Shares under option and share purchase plan                                      |                               |      | 78  |   
|Controls and procedures                                                          |                               |      | 78  |   
|                                                                                 |                               |     
|Index to the Financial Statements and Exhibits                                   |                               |      | 79  |   
|                                                                                 |                               |     
|Financial Statements                                                            
|Royal Dutch Petroleum Company                                                    |                               |      | R2  |   
|The Shell Transport and Trading Company, Public Limited Company                |                               |      | S2  |   
|Royal Dutch/Shell Group of Companies                                             |                               |      | G2  |   
|                                                                                 |                               |     
|Supplementary Information                                                        |                               |      |     |   
|Oil and Gas                                                                      |                               |      | G34 |   
|Derivatives and other Financial Instruments and Derivative Commodity Instruments |                               |      | G37 |   
|                                                                                 |                               |     
|Exhibits                                                                         |                               |      |     |   
|Significant Group companies as at December 31, 2002                              |                               |      |     |   
|Consents of Independent Accountants                                              |                               |      |     |   
|                                                                                 |                               |     





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TABLE OF CONTENTS



|                                                                                 |                              |  |  |  |  |  |  | 
|-------------------------------------------------------------------------------- | ---------------------------- |  |  |  |  |  |  | 
|Introduction                                                                    
|A THE PARENT COMPANIES                                                          
|B ROYAL DUTCH/SHELL GROUP OF COMPANIES                                          
|C PRESENTATION OF INFORMATION                                                   
|D DOCUMENTS ON DISPLAY                                                          
|Royal Dutch/Shell Group of Companies  Business and Property                    
|A ACTIVITIES AND MAJOR INTERESTS                                                
|B BUSINESS ENVIRONMENT                                                          
|C GENERAL DEVELOPMENT OF THE BUSINESS                                           
|D RISK FACTORS                                                                  
|E DESCRIPTION OF ACTIVITIES                                                     
|                                                                                 | 1 Exploration and Production
|                                                                                 | 2 Gas & Power               
|                                                                                 | 3 Oil Products              
|                                                                                 | 4 Chemicals                 
|                                                                                 | 5 Renewables                
|                                                                                 | 6 Other Activities          
|                                                                                 | 7 Research                  
|F PERSONNEL                                                                     
|Selected Financial Data                                                         
|Royal Dutch                                                                     
|Shell Transport                                                                 
|Discussion and Analysis of Financial Condition and Results of Operations        
|Royal Dutch Petroleum Company                                                   
|The Shell Transport and Trading Company, Public Limited Company               
|Royal Dutch/Shell Group of Companies                                            
|Royal Dutch Petroleum Company                                                   
|CONTROL OF REGISTRANT                                                           
|NATURE OF TRADING MARKET                                                        
|ARTICLES OF ASSOCIATION                                                         
|EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS              
|TAXATION                                                                        
|MANAGEMENT                                                                      
|SHARES UNDER OPTION AND SHARE PURCHASE PLAN                                     
|CONTROLS AND PROCEDURES                                                         
|The Shell Transport and Trading Company, Public Limited Company               
|CONTROL OF REGISTRANT                                                           
|NATURE OF TRADING MARKET                                                        
|MEMORANDUM AND ARTICLES OF ASSOCIATION                                          
|EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS              
|TAXATION                                                                        
|MANAGEMENT                                                                      
|SHARES UNDER OPTION AND SHARE PURCHASE PLAN                                     
|CONTROLS AND PROCEDURES                                                         
|Index to the Financial Statements and Exhibits                                  
|Financial Statements                                                            
|Royal Dutch Petroleum Company                                                   
|The Shell Transport and Trading Company, Public Limited Company               
|Royal Dutch/Shell Group of Companies                                            
|Supplementary Information                                                       
|Oil and Gas                                                                     
|Derivatives and other Financial Instruments and
Derivative Commodity Instruments
|Exhibits                                                                        
|Articles of Association                                                         
|Adjustment Agreement                                                            
|Significant group Companies as at Dec 31, 2002                                  
|Consent of KPMG Accountants N.V.                                                
|Consent of PricewaterhouseCoopers LLP, London                                   
|Consent of KPMG and PWC                                                         
|Consent of KPMG Accountants N.V., The Hague                                     
|Consent of KPMG & PWC                                                           



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Introduction

(FLOW CHART)

A THE PARENT COMPANIES

N.V. Koninklijke Nederlandsche Petroleum Maatschappij (Royal Dutch Petroleum
Company, hereinafter referred to as Royal Dutch) was incorporated on June 16,
1890, under the laws of the Netherlands.

The Shell Transport and Trading Company, Public Limited Company (hereinafter
referred to as Shell Transport) was incorporated on October 18, 1897, under
the laws of England.




A THE PARENT COMPANIES

Royal Dutch and Shell Transport do not engage in operational activities. They
derive the whole of their respective incomes  except for interest income on
cash balances or short-term investments  from their respective interests in
the companies known collectively as the Royal Dutch/Shell Group of Companies.





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##### Table of Contents

(FLOW CHART OF COMPANY)

Introduction 1



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##### Table of Contents






B ROYAL DUTCH/SHELL GROUP OF COMPANIES

The numerous companies in which Royal Dutch and Shell Transport own investments
are collectively referred to as the Royal Dutch/Shell Group of Companies. Royal
Dutch and Shell Transport are the Parent Companies of the Group but are not
themselves part of it. The Royal Dutch/Shell Group of Companies has grown out
of an alliance made in 1907 between Royal Dutch and Shell Transport, by which
the two companies agreed to merge their interests on a 60:40 basis while
remaining separate and distinct entities. Arrangements between Royal Dutch and
Shell Transport provide, inter alia, that, notwithstanding variations in
shareholdings, Royal Dutch and Shell Transport shall share in the aggregate net
assets and in the aggregate dividends and interest received from Group
companies in the proportion of 60:40. It is further arranged that the burden of
all taxes in the nature of or corresponding to an income tax leviable in
respect of such dividends and interests shall fall in the same proportion.
Details of supplemental arrangements to the 60:40 arrangements are given in
Note 1 on page G5.

The illustration on the previous page shows the relationship between the Parent
Companies and the Royal Dutch/Shell Group of Companies.

Group Holding Companies
There are two Group Holding Companies: Shell Petroleum N.V. in the Netherlands
and The Shell Petroleum Company Limited in the UK. The Group Holding Companies
between them hold all the shares in the Service Companies and, directly or
indirectly, all Group interests in the Operating Companies. Some of these
interests, including all the shares in the US-based Shell Oil Company
(hereinafter referred to as Shell Oil, which expression shall include its
subsidiaries), are held by Shell Petroleum Inc., a Delaware Corporation. Shell
Petroleum N.V. holds equity shares in Shell Petroleum Inc. that entitle it to
the dividend flow from that company, but direct controlling interest in Shell
Petroleum Inc. is jointly held by Royal Dutch and Shell Transport.

Royal Dutch is entitled to have its nominees elected as a majority of, and
Shell Transport is entitled to have its nominees elected as the balance of, the
members of the Boards of Directors of the two Group Holding Companies. Every
member of the Board of Management of Royal Dutch and every Managing Director of
Shell Transport is also a member of the Presidium of the Board of Directors of
Shell Petroleum N.V. and a Managing Director of The Shell Petroleum Company
Limited. As such, they are generally known as Group Managing Directors. They
are also appointed by the Boards of Shell Petroleum N.V. and The Shell
Petroleum Company Limited to a joint committee known as the Committee of
Managing Directors, which considers and develops objectives and long-term
plans.

Service Companies
The main business of the Service Companies is to provide advice and services to
other Shell companies.

Operating Companies
Present in more than 145 countries and territories around the world, the
companies of the Royal Dutch/Shell Group are engaged in the business of
Exploration and Production, Gas & Power, Oil Products, Chemicals and Renewables
as well as Other Activities.

Exploration and Production: Searches for, finds and produces crude oil and
natural gas. Builds and operates the infrastructure needed to deliver
hydrocarbons to market.

Gas & Power: Liquefies and transports natural gas, develops gas markets and
infrastructure, develops gas-fired power plants and engages in the marketing
and trading of natural gas and electricity. Converts natural gas to liquids to
provide clean fuels.

Oil Products: Markets transportation fuels, lubricants and speciality products.
Refines, supplies, trades and ships crude oil and petroleum products. Provides
technical consultancy services.

Chemicals: Produces and sells petrochemical building blocks and polyolefins
globally.

Renewables: Generates green electricity and provides renewable energy
solutions. Develops and operates wind parks; manufactures and markets solar
systems.

Other Activities include Shell Consumer and Shell Hydrogen.

The management of each Operating Company is responsible for the performance and
long-term viability of its own operations, but it can draw on the experience of
the Service Companies and, through them, of other Operating Companies.

2 Introduction



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##### Table of Contents



The information contained on the list of significant Group companies, including
the jurisdiction of incorporation and the Parent Companies proportion of
ownership, filed as Exhibit 8 to this Annual Report on Form 20-F, is
incorporated herein by reference.




C PRESENTATION OF INFORMATION

The information in this Report relating to Royal Dutch has been provided by
Royal Dutch and that relating to Shell Transport has been provided by Shell
Transport.

The information given in this Report for the Royal Dutch/Shell Group of
Companies reflects the operational and financial results of Group companies
throughout the world. The financial information given is an aggregation of the
accounts of all Group companies (except where otherwise indicated) expressed in
US dollars. It should be noted that the accounts of Royal Dutch for the year
2002 (of which the Financial Statements of the Royal Dutch/Shell Group of
Companies and the notes thereto form part) are subject to finalisation by the
General Meeting of Shareholders to be held on April 23, 2003.

The companies in which Royal Dutch and Shell Transport directly or indirectly
own investments are separate and distinct entities, but in this report the
collective expressions Shell and Group are sometimes used for convenience
in contexts where reference is made to the companies of the Royal Dutch/Shell
Group in general. Likewise the words we, us and our are sometimes used in
some places to refer to companies of the Royal Dutch/Shell Group in general,
and in others to those who work in those companies. These expressions are also
used where no useful purpose is served by identifying the particular company or
companies. The expression Group companies as used in this report refers to
companies in which Royal Dutch and Shell Transport either directly or
indirectly have control, by having either a majority of the voting rights or
the right to exercise a controlling influence. The companies in which Group
companies have significant influence but not control are referred to as
associated companies.

The expression Operating Companies as used in this Report refers to those
Group and associated companies which are engaged in various branches of the
businesses of oil, natural gas, chemicals, power generation and renewable
energy as well as in other businesses. The term Group interest is used for
convenience to indicate the direct or indirect equity interest held by the
Group Holding Companies in a venture or partnership or company (i.e., after
exclusion of all third-party interests).

The figures shown in most of the tables in this Report represent those in
respect of Group companies only, without deduction of minority interests.
However, where figures are given specifically for oil production (net of
royalties in kind), natural gas production available for sale, and both the
refinery processing intake and total oil product sales volumes of Equilon and
the Motiva joint venture (following the Groups additional share purchases in
2002, Equilon is no longer a joint venture), the term Group share is used for
convenience to indicate not only the volumes to which Group companies are
entitled (without deduction in respect of minority interests in Group
companies) but also the portion of the volumes of associated companies to which
Group companies are entitled or which is proportionate to the Group interest in
those companies.

The discussion and analysis in this Annual Report contains forward-looking
statements that are subject to risk factors associated with the oil, gas,
chemicals, power generation and renewable resources businesses. It is believed
that the expectations reflected in these statements are reasonable, but they
may be affected by a variety of variables which could cause actual results or
trends to differ materially, including, but not limited to: price fluctuations,
actual demand, currency fluctuations, drilling and production results, reserve
estimates, loss of market, industry competition, environmental risks, physical
risks, legislative, fiscal and regulatory developments, economic and financial
market conditions in various countries and regions, political risks, project
delay or advancement, approvals and cost estimates.




D DOCUMENTS ON DISPLAY

Documents concerning Royal Dutch, Shell Transport or the Royal Dutch/Shell
Group of Companies referred to in this Annual Report that have been filed with
the Securities and Exchange Commission may be examined and copied at the public
reference facility maintained by the Securities and Exchange Commission at 450
Fifth Street, N.W., Room 1300, Washington, D.C. 20549. You may also obtain
copies of these materials by mail. For further information on the operation of
the public reference room and the copy charges, please call the Securities and
Exchange Commission at (800) SEC0330. All of the Securities and Exchange
Commission filings made electronically by Royal Dutch and Shell Transport are
available to the public at the Securities and Exchange Commission website at
www.sec.gov.

Introduction 3



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##### Table of Contents






Royal Dutch/Shell Group of Companies  Business and Property




A ACTIVITIES AND MAJOR INTERESTS

The companies of the Royal Dutch/Shell Group are engaged worldwide in all the
principal aspects of the oil and natural gas industry. They also have interests
in chemicals and additional interests in power generation, renewable energy
(chiefly in wind and solar energy), and other businesses.

Oil and gas, by far the largest of the Group companies business activities,
accounted for over 90% of net proceeds in 2002. In fact, Group and associated
companies constitute one of the largest oil and gas enterprises in the world.
They market their oil products in more countries than any other oil company,
and have a strong position not only in the major industrialised countries but
also in the developing ones. The distinctive Shell pecten (a trademark in use
since the early part of the twentieth century) and trademarks in which the word
Shell appears, support this marketing effort throughout the world. Taken
together, Group and associated companies also rank among the worlds major
chemical companies; in 2002 chemicals accounted for around 8% of the net
proceeds of Group companies. The Groups interests in power generation and
renewable energy are considerably smaller. Nevertheless, the Groups Renewables
business is now one of the largest global solar enterprises following the
acquisition of the Siemens solar business early in 2002. Renewables also has
plans to become a leading player in the wind energy sector. The Groups various
activities are conducted  to one extent or another  in more than 145
countries and territories.

The breakdown of net proceeds of Group companies by industry segment and by
geographical region for the years 2000 to 2002 is set out in the following
tables:

|                                                                |  |          
|--------------------------------------------------------------- |  | ---------
|Net Proceeds by Industry Segment(including inter-segment sales) |  | $ million

|                           |  |      |         |      |  |      |         |  |  |  |         | 
|-------------------------- |  | ---- | ------- | ---- |  | ---- | ------- |  |  |  | ------- | 
|                           |  | 2002 |         | 2001 |  | 2000
|                           |  |      |         |      |  |     
|Exploration and Production |  |      |         |      |  |      |         |  |  |  |         | 
|Third parties              |  |      | 12,017  |      |  |      | 12,137  |  |  |  | 13,468  | 
|Inter-segment              |  |      | 14,319  |      |  |      | 13,951  |  |  |  | 14,326  | 
|                           |  |      |         |      |  |      |         |  |  |  |         | 
|                           |  |      | 26,336  |      |  |      | 26,088  |  |  |  | 27,794  | 
|                           |  |      |         |      |  |      |         |  |  |  |         | 
|Gas & Power                |  |      |         |      |  |      |         |  |  |  |         | 
|Third parties              |  |      | 16,992  |      |  |      | 15,721  |  |  |  | 15,991  | 
|Inter-segment              |  |      | 620     |      |  |      | 705     |  |  |  | 496     | 
|                           |  |      |         |      |  |      |         |  |  |  |         | 
|                           |  |      | 17,612  |      |  |      | 16,426  |  |  |  | 16,487  | 
|                           |  |      |         |      |  |      |         |  |  |  |         | 
|Oil Products               |  |      |         |      |  |      |         |  |  |  |         | 
|Third parties              |  |      | 135,544 |      |  |      | 93,517  |  |  |  | 104,002 | 
|Inter-segment              |  |      | 3,080   |      |  |      | 2,108   |  |  |  | 2,280   | 
|                           |  |      |         |      |  |      |         |  |  |  |         | 
|                           |  |      | 138,624 |      |  |      | 95,625  |  |  |  | 106,282 | 
|                           |  |      |         |      |  |      |         |  |  |  |         | 
|Chemicals                  |  |      |         |      |  |      |         |  |  |  |         | 
|Third parties              |  |      | 14,125  |      |  |      | 13,260  |  |  |  | 15,205  | 
|Inter-segment              |  |      | 1,082   |      |  |      | 990     |  |  |  | 1,102   | 
|                           |  |      |         |      |  |      |         |  |  |  |         | 
|                           |  |      | 15,207  |      |  |      | 14,250  |  |  |  | 16,307  | 
|                           |  |      |         |      |  |      |         |  |  |  |         | 
|Corporate and other        |  |      |         |      |  |      |         |  |  |  |         | 
|Third parties              |  |      | 753     |      |  |      | 576     |  |  |  | 480     | 
|Inter-segment              |  |      | 17      |      |  |      | 2       |  |  |  |        | 
|                           |  |      |         |      |  |      |         |  |  |  |         | 
|                           |  |      | 770     |      |  |      | 578     |  |  |  | 480     | 
|                           |  |      |         |      |  |      |         |  |  |  |         | 
|                           |  |      | 198,549 |      |  |      | 152,967 |  |  |  | 167,350 | 
|                           |  |      |         |      |  |      |         |  |  |  |         | 

|                                                                 |  |          
|---------------------------------------------------------------- |  | ---------
|Net Proceeds by Geographical Area(excluding inter-segment sales) |  | $ million

|                         |  |      |         |      |  |      |         |  |  |  |         | 
|------------------------ |  | ---- | ------- | ---- |  | ---- | ------- |  |  |  | ------- | 
|                         |  | 2002 |         | 2001 |  | 2000
|                         |  |      |         |      |  |     
|Europe                   |  |      | 65,137  |      |  |      | 62,259  |  |  |  | 68,060  | 
|Other Eastern Hemisphere |  |      | 33,322  |      |  |      | 31,866  |  |  |  | 34,144  | 
|USA                      |  |      | 62,632  |      |  |      | 21,095  |  |  |  | 26,089  | 
|Other Western Hemisphere |  |      | 18,340  |      |  |      | 19,991  |  |  |  | 20,853  | 
|                         |  |      |         |      |  |      |         |  |  |  |         | 
|                         |  |      | 179,431 |      |  |      | 135,211 |  |  |  | 149,146 | 
|                         |  |      |         |      |  |      |         |  |  |  |         | 

4 Royal Dutch/Shell Group of Companies - Business and Property



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B BUSINESS ENVIRONMENT

In 2002, Brent crude prices averaged $25.05 a barrel compared with $24.45 a
barrel in 2001. Crude oil prices recovered steadily in the first three quarters
of 2002 from below $20 to in excess of $30 a barrel amid production restraints
by key producing countries. Prices subsequently weakened as major oil producers
increased output significantly to meet higher seasonal demand in the fourth
quarter, falling close to $24 a barrel by late November. In December prices
rebounded when supply from Venezuela was disrupted and had risen to just above
$30 a barrel by year-end. Crude price outlook for 2003 is highly uncertain with
prices expected to be volatile. Much will depend on the pace of economic
growth, severity of the northern hemisphere winter and political developments
in Venezuela and the Middle East.

Oil demand was weak in 2002 and grew by a mere 0.2 mb/d due to a slow US
economic recovery and a very mild winter in the first quarter. Demand growth is
expected to move closer to trend in 2003 but there are more uncertainties than
usual surrounding the pace of economic recovery, the weakness of equity markets
and the impact of high oil prices.

For the full year 2002, Henry Hub gas prices averaged $3.33 per million British
Thermal Units (Btu) compared to $4.10 per million Btu in 2001 (when gas prices
spiked to around $10 in the 2000/2001 winter). Prices strengthened towards the
end of 2002. In the fourth quarter of 2002, Henry Hub cash prices averaged
$4.27 per million Btu, with prices over $1 higher than in the third quarter of
2002 and almost $2 more than a year ago. Higher prices were driven by a rundown
in levels of gas in storage below prior year levels. Concerns about production
declines onshore USA and Western Canada also contributed to higher prices. In
contrast, a year ago, storage was reaching record levels.

In 2002, industry refining margins averaged $0.85 and $0.40 a barrel in
Rotterdam and Singapore compared to $1.80 and $0.80 a barrel respectively a
year ago; for 2002 the US Gulf Coast and West Coast margins were $2.90 and
$3.90 a barrel (2001 $5.30 and $7.75). Refining margins for the first three
quarters of 2002 were squeezed by a combination of weak product demand and
firming crude oil prices due to supply tightness. Margins recovered in October
and November as seasonal product demand increased and crude oil prices fell
with rising supply availability. Decline came in December as crude oil prices
escalated as a result of the Venezuelan crisis. Overall refining margins in
2002 were poor and at their lowest level for a decade in many locations.
Furthermore heavy crude coking margins in the US Gulf Coast were exceptionally
weak with a very negative impact on refining profitability in the region. The
refining margin outlook for this year is uncertain but on average may improve
marginally from the poor level in 2002. Much will depend on crude supply
availability and the pace of global economic recovery. Margins have been firm
in the first quarter as a result of the loss of the Venezuelan product exports,
a heavy industry refinery maintenance program in the Atlantic Basin and cold
weather in the northern hemisphere.

Retail margins were under pressure for much of 2002, reflecting difficulties in
passing on escalating supply cost to customers. The margin outlook for 2003 is
uncertain. Keen competition in the mature markets will continue to temper
margins.

Chemicals saw some signs of improvement in the business environment but it was
still a very challenging year due to difficult trading conditions, particularly
in the USA. Industry utilisation remained flat in Europe but improved in the
USA from historically low levels in 2001. Cracker margins in both regions were
down from a year ago. The outlook for Chemicals is mixed and will depend on
economic recovery and improvement in consumer confidence levels.




C GENERAL DEVELOPMENT OF THE BUSINESS

Total capital investment in 2002 amounted to $24.6 billion, including
acquisitions. Four important acquisitions were completed; Enterprise Oil
(Enterprise) in the UK, DEA Oil (DEA) in Germany, and in the USA
Pennzoil-Quaker State and Texacos interests in Equilon and Motiva. Excluding
major acquisitions, capital investment totalled $14.2 billion.

Net additions to proved hydrocarbon reserves, including oil sands, over the
last five years (19982002) are equivalent to 109% of total production. The
total five year proved oil and natural gas reserves
replacement ratio, excluding oil sands, is 100% (111% for oil, including
natural gas liquids, and 83% for gas).

Group and associated companies natural gas production available for sale has
increased by 10% since 2000. Investment continues in the expansion of existing
operations and in major new pipelines. Moreover, additional liquefied natural
gas (LNG) projects and

Royal Dutch/Shell Group of Companies - Business and Property 5



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Gas to Liquids plants are being considered in several countries. Gas is the
environmentally preferred fuel for power generation and demand for both gas and
electricity is expected to grow.

Group companies continue to pursue a policy of a diversified supply base, and
they trade actively in crude oil and its refined products throughout the world.
Major acquisitions in the USA, the worlds largest market and in Germany,
Europes largest market have strengthened Oil Products competitive position
and enhanced the quality of the global portfolio. This has reinforced the Oil
Products objective of leading the global downstream industry. Furthermore, the
Group will continue to address environmental concerns through tighter product
specifications. Above all, Group companies will maintain their emphasis on
innovative customer offers, portfolio optimisation and structural cost
reduction. Both refining and marketing operations have maintained efforts to
improve their health, safety and environmental performance.

After a period when the focus has been on divestment, attention in the
Chemicals business in 2002 turned to strengthening and enhancing the portfolio.
A single marketing and supply company for Europe was established in order to
improve speed and efficiency for customers and suppliers. The final investment
decision to proceed with construction of the $4.3 billion Nanhai petrochemicals
complex in southern China was taken. The completion of a new olefins and
alcohols unit at the Geismar plant in Louisiana consolidated the Groups
position as a major player in these products. Further strengthening of the
portfolio was achieved through the completion of a styrene monomer/propylene
oxide business unit in Singapore, and a benzene plant at Moerdijk, the
Netherlands.

In 2002, Renewables became one of the largest global solar photovotaic (pv)
players by acquiring the balance of shares in its solar joint venture with
Siemens and E.On, and continued its growth in the wind energy sector with the
development of two wind parks in California, Whitewater Hill and Cabazon Pass.

All the business activities described in this section are supported by
research. The finding of oil and gas, the enhancement of recovery from existing
fields and the engineering of offshore structures, are subjects that receive
particular attention, as do the products and processes of oil refining, gas
processing and chemicals manufacturing.




D RISK FACTORS

The Group and its businesses are subject to various risks relating to changing
competitive, economic, political, legal, social, industry, business and
financial conditions. These conditions are described below and discussed in
greater detail elsewhere in this Annual Report.

Price fluctuations
Oil, natural gas and chemical prices can vary as a result of changes in supply
and demand for products, which may be global or limited to specific regions and
influenced by factors such as economic conditions, weather conditions or action
taken by major oil exporting countries.

Currency fluctuations
The Group is present in more than 145 countries and territories throughout the
world and is subject to risks from changes in currency values and exchange
controls.

Drilling and production results
The Groups future oil and gas production is significantly dependent on
successful drilling and well development. There are risks in this process in
interpretation of geological and engineering data, project delay, cost overruns
and technical, fiscal and other conditions.

Reserve estimates
Information on oil and gas reserves is given on pages G34 to G36. Oil and gas
reserves cannot be measured exactly since estimation of reserves involves
subjective judgement and arbitrary determinations and is dependent, amongst
other things, on the reliability of technical and economic data.

Loss of market
Group companies are subject to differing economic and financial market
conditions in countries and regions throughout the world. There are risks to
such markets from political or economic instability, as well as from industry
competition.

6 Royal Dutch/Shell Group of Companies - Business and Property



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Environmental risks
Group companies are subject to a number of different environmental laws,
regulations and reporting requirements. Costs are incurred for prevention,
control, abatement or elimination of releases into the air and water, as well
as in the disposal and handling of wastes at operating facilities. Expenditures
of a capital nature include both remedial measures on existing plants and
integral features of new plants.

Physical risks
The Groups assets are subject to risk from operational hazards, natural
disasters and expropriation of property.

Legislative, fiscal and regulatory developments
The Groups operations are subject to risk of change in legislation, taxation
and regulation. For exploration and production activities, these matters
include land tenure, entitlement to produced hydrocarbons, production rates,
royalties, pricing, environmental protection, social impact, exports, taxes and
foreign exchange.

Political developments
Political developments, including war, embargos and internal political strife
can affect world oil supply and prices.




E   DESCRIPTION OF ACTIVITIES




1   Exploration and Production

(a) General
Group and associated companies involved in the exploration for and production
of crude oil and natural gas operate under a broad range of legislation and
regulations that change over time. These laws and rules cover virtually all
aspects of exploration and production activities, including matters such as
land tenure, entitlement to produced hydrocarbons, production rates, royalties,
pricing, environmental protection, social impact, exports, taxes and foreign
exchange. The conditions of the leases, licences and contracts under which oil
and gas interests are held vary from country to country. In almost all cases,
the legal agreements generally have in common that they are granted by or
entered into with a government, government entity or state oil company, and
that the exploration risk practically always rests with the oil company. Of
these agreements, the following are most relevant to Group interests:



| |  | Licences (or concessions) entitle the holder to explore for hydrocarbons
and exploit any commercial discoveries. Under a licence, the holder bears
the risk of exploration, development and production activities and of
financing these activities. In principle, the licence holder is entitled
to the totality of production minus any royalties in kind. The state or
state oil company may sometimes enter as a joint-venture partner sharing
the rights and obligations of the licence but usually without sharing the
exploration risk. In a few cases the state company or agency has an option
to purchase a certain share of production.                                                                                                 
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Production-sharing contracts entered into with a state or state oil
company obligate the oil company, as contractor, to provide all the
financing and bear the risk of exploration, development and production
activities in exchange for a share of the production. Usually this share
consists of a fixed or variable part, which is reserved for the recovery
of contractors cost (cost oil); the remainder is split with the state or
state oil company on a fixed or volume/revenue-dependent basis. In some
cases the state oil company will participate in the rights and obligations
of the contractor and will share in the costs of development and
production. Such participation can be across the venture or be on a
per-field basis.

Group companies exploration and production interests, including acreage
holdings and statistics on wells drilled and drilling, are shown on pages 11 to
13.

Details of Group companies and the Group share of associated companies
estimated net proved reserves are summarised in the following table and are set
out in the supplementary information on pages G34 to G36. Particular reference
is made to the statement: Oil and gas reserves cannot be
measured exactly since estimation of reserves involves subjective judgement and
arbitrary determinations. Estimates remain subject to revision. It should be
noted that totals are further influenced by acquisition and divestment
activities. Proved reserves are shown net of any quantities of crude oil or
natural gas that are expected to be taken by others as royalties in kind but do
not exclude certain quantities related to royalties expected to be paid in cash
or those related to fixed margin contracts. Proved reserves also include
certain quantities of crude oil or natural gas which will be produced under
arrangements which involve Group companies in upstream risks and rewards but
which do not transfer title of the product to those Group companies.

Royal Dutch/Shell Group of Companies - Business and Property 7



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|                                                          |  |                
|--------------------------------------------------------- |  | ---------------
|Proved Developed and Undeveloped Reserves(at December 31) |  | million barrels

|                                    |  |      |        |      |  |      |       |  |  |  |       | 
|----------------------------------- |  | ---- | ------ | ---- |  | ---- | ----- |  |  |  | ----- | 
|                                    |  | 2002 |        | 2001 |  | 2000
|                                    |  |      |        |      |  |     
|Crude oil and natural gas liquids   |  |      |        |      |  |      |       |  |  |  |       | 
|Group companies                     |  |      | 9,026  |      |  |      | 8,544 |  |  |  | 8,670 | 
|Group share of associated companies |  |      | 1,107  |      |  |      | 925   |  |  |  | 1,081 | 
|                                    |  |      |        |      |  |      |       |  |  |  |       | 
|                                    |  |      | 10,133 |      |  |      | 9,469 |  |  |  | 9,751 | 
|                                    |  |      |        |      |  |      |       |  |  |  |       | 

thousand million standard cubic feet

|                                    |  |  |        |  |  |  |        |  |  |  |        | 
|----------------------------------- |  |  | ------ |  |  |  | ------ |  |  |  | ------ | 
|Natural gas                         |  |  |        |  |  |  |        |  |  |  |        | 
|Group companies                     |  |  | 48,240 |  |  |  | 50,613 |  |  |  | 50,842 | 
|Group share of associated companies |  |  | 5,198  |  |  |  | 5,216  |  |  |  | 5,441  | 
|                                    |  |  |        |  |  |  |        |  |  |  |        | 
|                                    |  |  | 53,438 |  |  |  | 55,829 |  |  |  | 56,283 | 
|                                    |  |  |        |  |  |  |        |  |  |  |        | 

Capital Expenditure and Exploration Expense by Geographical Areaa

|                                              |  |          
|--------------------------------------------- |  | ---------
|(oil and gas exploration and production only) |  | $ million

|                         |  |      |        |      |  |      |       |  |  |  |       | 
|------------------------ |  | ---- | ------ | ---- |  | ---- | ----- |  |  |  | ----- | 
|                         |  | 2002 |        | 2001 |  | 2000
|                         |  |      |        |      |  |     
|Europe                   |  |      | 7,519  |      |  |      | 1,236 |  |  |  | 1,024 | 
|Other Eastern Hemisphere |  |      | 2,996  |      |  |      | 3,214 |  |  |  | 1,551 | 
|USA                      |  |      | 2,015  |      |  |      | 2,009 |  |  |  | 1,217 | 
|Other Western Hemisphere |  |      | 1,531  |      |  |      | 1,273 |  |  |  | 762   | 
|                         |  |      |        |      |  |      |       |  |  |  |       | 
|                         |  |      | 14,061 |      |  |      | 7,732 |  |  |  | 4,554 | 
|                         |  |      |        |      |  |      |       |  |  |  |       | 



|a |  | Capital expenditureCapital expenditure is the cost of
acquiring property, plant and equipment, and  following
the successful efforts method in accounting for exploration
costs  includes exploration drilling costs capitalised
pending determination of commercial reserves. In the case
of material capital projects, the related interest cost is
included until these are substantially complete. The amount shown above includes acquisitions and the
costs of acquiring Enterprise Oil in 2002 of $5.3
billion has been included within the amount shown for
Europe.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|  |  | Exploration expenseis the cost of geological and
geophysical surveys and of other exploratory work
charged to income as incurred, and exploratory drilling
costs which were initially taken up in capital
expenditure pending determination of commercial reserves
but where the efforts are subsequently determined to be
unsuccessful and then charged to income (with a
corresponding reduction in capital expenditure).
Exploration expense excludes depreciation and release of
currency translation differences.                                                       

Average Production Costs of Group Companies by Geographical Area

$/barrel of oil equivalent

|                         |  |      |      |      |  |      |      |  |  |  |      | 
|------------------------ |  | ---- | ---- | ---- |  | ---- | ---- |  |  |  | ---- | 
|                         |  | 2002 |      | 2001 |  | 2000 |     
|                         |  |      |      |      |  |      |     
|Europe                   |  |      | 2.94 |      |  |      | 2.35 |  |  |  | 2.42 | 
|Other Eastern Hemisphere |  |      | 2.75 |      |  |      | 2.28 |  |  |  | 2.31 | 
|USA                      |  |      | 2.61 |      |  |      | 2.38 |  |  |  | 2.10 | 
|Other Western Hemisphere |  |      | 3.73 |      |  |      | 3.32 |  |  |  | 3.93 | 
|                         |  |      |      |      |  |      |      |  |  |  |      | 
|Total Group              |  |      | 2.86 |      |  |      | 2.39 |  |  |  | 2.42 | 
|                         |  |      |      |      |  |      |      |  |  |  |      | 

8 Royal Dutch/Shell Group of Companies - Business and Property



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|            |  |                       
|----------- |  | ----------------------
|Productiona |  | thousand barrels daily

|                                       |              |  |       |     |      |  |       |     |      |  |       |     |  |  |                       |     |  |  |       |     | 
|-------------------------------------- | ------------ |  | ----- | --- | ---- |  | ----- | --- | ---- |  | ----- | --- |  |  | --------------------- | --- |  |  | ----- | --- | 
|                                       |              |  | 2002b |     | 2001 |  | 2000  |     | 1999 |  | 1998 
|                                       |              |  |       |     |      |  |       |     |      |  |      
|Europe                                 |              |  |       |     |      |  |       |     |      |  |       |     |  |  |                       |     |  |  |       |    
|UK                                     |              |  | 402   |     |      |  | 311   |     |      |  | 378   |     |  |  | 402                   |     |  |  | 373   |    
|Denmark                                |              |  | 140   |     |      |  | 130   |     |      |  | 129   |     |  |  | 118                   |     |  |  | 109   |    
|Norway                                 |              |  | 131   |     |      |  | 89    |     |      |  | 87    |     |  |  | 83                    |     |  |  | 87    |    
|Netherlands                            |              |  | 9     |     |      |  | 10    |     |      |  | 13    |     |  |  | 13                    |     |  |  | 14    |    
|Germany                                |              |  | 5     |     |      |  | 6     |     |      |  | 6     |     |  |  | 6                     |     |  |  | 7     |    
|Others                                 |              |  | 9     |     |      |  | 1     |     |      |  | *     |     |  |  | *                     |     |  |  | *     |    
|                                       |              |  |       |     |      |  |       |     |      |  |       |     |  |  |                       |     |  |  |       |    
|                                       |              |  | 696   |     |      |  | 547   |     |      |  | 613   |     |  |  | 622                   |     |  |  | 590   |    
|                                       |              |  |       |     |      |  |       |     |      |  |       |     |  |  |                       |     |  |  |       |    
|Other Eastern Hemisphere               |              |  |       |     |      |  |       |     |      |  |       |     |  |  |                       |     |  |  |       |    
|                                       | Africa       |  |       |     |      |  |       |     |      |  |       |     |  |  |                       |     |  |  |       |     | 
|                                       | Nigeria      |  |       | 215 |      |  |       | 250 |      |  |       | 239 |  |  |                       | 212 |  |  |       | 232 | 
|                                       | Gabon        |  |       | 46  |      |  |       | 56  |      |  |       | 69  |  |  |                       | 89  |  |  |       | 110 | 
|                                       | Cameroon     |  |       | 17  |      |  |       | 19  |      |  |       | 21  |  |  |                       | 22  |  |  |       | 25  | 
|                                       | Egypt        |  |       | 11  |      |  |       | 14  |      |  |       | 10  |  |  |                       | 7   |  |  |       | 7   | 
|                                       | Others       |  |       | 2   |      |  |       | 3   |      |  |       | 3   |  |  |                       | 3   |  |  |       | 3   | 
|                                       |              |  |       |     |      |  |       |     |      |  |       |     |  |  |                       |     |  |  |       |    
|                                       |              |  | 291   |     |      |  | 342   |     |      |  | 342   |     |  |  | 333                   |     |  |  | 377   |    
|                                       |              |  |       |     |      |  |       |     |      |  |       |     |  |  |                       |     |  |  |       |    
|                                       | Middle East  |  |       |     |      |  |       |     |      |  |       |     |  |  |                       |     |  |  |       |     | 
|                                       | Omanc        |  |       | 319 |      |  |       | 327 |      |  |       | 326 |  |  |                       | 299 |  |  |       | 284 | 
|                                       | Abu Dhabi    |  |       | 100 |      |  |       | 94  |      |  |       | 96  |  |  |                       | 82  |  |  |       | 90  | 
|                                       | Syria        |  |       | 49  |      |  |       | 48  |      |  |       | 50  |  |  |                       | 71  |  |  |       | 88  | 
|                                       | Yemen        |  |       |    |      |  |       |    |      |  |       |    |  |  |                       |    |  |  |       | 14  | 
|                                       | Others       |  |       | 46  |      |  |       | 23  |      |  |       | 9   |  |  |                       | 1   |  |  |       |    | 
|                                       |              |  |       |     |      |  |       |     |      |  |       |     |  |  |                       |     |  |  |       |    
|                                       |              |  | 514   |     |      |  | 492   |     |      |  | 481   |     |  |  | 453                   |     |  |  | 476   |    
|                                       |              |  |       |     |      |  |       |     |      |  |       |     |  |  |                       |     |  |  |       |    
|                                       | Asia Pacific |  |       |     |      |  |       |     |      |  |       |     |  |  |                       |     |  |  |       |     | 
|                                       | Australia    |  |       | 92  |      |  |       | 99  |      |  |       | 111 |  |  |                       | 47  |  |  |       | 54  | 
|                                       | Brunei       |  |       | 101 |      |  |       | 97  |      |  |       | 95  |  |  |                       | 86  |  |  |       | 74  | 
|                                       | Malaysia     |  |       | 59  |      |  |       | 60  |      |  |       | 56  |  |  |                       | 66  |  |  |       | 76  | 
|                                       | China        |  |       | 24  |      |  |       | 23  |      |  |       | 25  |  |  |                       | 20  |  |  |       | 27  | 
|                                       | Thailand     |  |       | 15  |      |  |       | 16  |      |  |       | 18  |  |  |                       | 18  |  |  |       | 18  | 
|                                       | New Zealand  |  |       | 29  |      |  |       | 30  |      |  |       | 9   |  |  |                       | 10  |  |  |       | 12  | 
|                                       | Others       |  |       | 5   |      |  |       |    |      |  |       |    |  |  |                       |    |  |  |       |    | 
|                                       |              |  |       |     |      |  |       |     |      |  |       |     |  |  |                       |     |  |  |       |    
|                                       |              |  | 325   |     |      |  | 325   |     |      |  | 314   |     |  |  | 247                   |     |  |  | 261   |    
|                                       |              |  |       |     |      |  |       |     |      |  |       |     |  |  |                       |     |  |  |       |    
|Total Other Eastern Hemisphere         |              |  | 1,130 |     |      |  | 1,159 |     |      |  | 1,137 |     |  |  | 1,033                 |     |  |  | 1,114 |    
|                                       |              |  |       |     |      |  |       |     |      |  |       |     |  |  |                       |     |  |  |       |    
|USA                                    |              |  | 442   |     |      |  | 411   |     |      |  | 417   |     |  |  | 504                   |     |  |  | 521   |    
|                                       |              |  |       |     |      |  |       |     |      |  |       |     |  |  |                       |     |  |  |       |    
|Other Western Hemisphere               |              |  |       |     |      |  |       |     |      |  |       |     |  |  |                       |     |  |  |       |    
|Canada                                 |              |  | 56    |     |      |  | 56    |     |      |  | 58    |     |  |  | 61                    |     |  |  | 68    |    
|Colombia                               |              |  |      |     |      |  |      |     |      |  |      |     |  |  |                      |     |  |  | 18    |    
|Others                                 |              |  | 48    |     |      |  | 47    |     |      |  | 49    |     |  |  | 48                    |     |  |  | 43    |    
|                                       |              |  |       |     |      |  |       |     |      |  |       |     |  |  |                       |     |  |  |       |    
|                                       |              |  | 104   |     |      |  | 103   |     |      |  | 107   |     |  |  | 109                   |     |  |  | 129   |    
|                                       |              |  |       |     |      |  |       |     |      |  |       |     |  |  |                       |     |  |  |       |    
|Total                                  |              |  | 2,372 |     |      |  | 2,220 |     |      |  | 2,274 |     |  |  | 2,268                 |     |  |  | 2,354 |    
|                                       |              |  |       |     |      |  |       |     |      |  |       |     |  |  |                       |     |  |  |       |    
|* Less than one
thousand barrels daily |              |  |       |     |      |  |       |     |      |  |       |     |  |  |                       |     |  |  |       |    
|                                       |              |  |       |     |      |  |       |     |      |  |       |     |  |  | million tonnes a year
|Metric equivalent                      |              |  | 119   |     |      |  | 111   |     |      |  | 114   |     |  |  | 113                   |     |  |  | 118   |    



|a |  | Of Group companies, plus Group share of associated companies, and including natural gas liquids (Group share of associated companies is assumed to be
equivalent to Group interest). Royalty purchases are excluded. In those countries where production-sharing contracts operate, the figures shown represent the
entitlements of the Group companies concerned under those contracts.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|b |  | The acquisition of Enterprise contributed some 180 thousand barrels of oil equivalent per day to 2002 total hydrocarbon production (9 months of production
averaged over the full year). Production came mainly from assets in the UK and Norway.                                                                                                                                       
| 
|c |  | Exceptionally, the minority interest is deducted in respect of production volumes given for Oman.                                                                                                                                                                                                                                                                                       

| |  | 
| |  | 

Royal Dutch/Shell Group of Companies - Business and Property 9



---



##### Table of Contents



|                                            |  |                                  
|------------------------------------------- |  | ---------------------------------
|Natural gas production available for sale a |  | million standard cubic feet daily

|                         |  |       |       |      |  |      |       |      |  |      |       |  |  |  |                                     |  |  |  |       | 
|------------------------ |  | ----- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- |  |  |  | ----------------------------------- |  |  |  | ----- | 
|                         |  | 2002b |       | 2001 |  | 2000 |       | 1999 |  | 1998
|                         |  |       |       |      |  |      |       |      |  |     
|Europe                   |  |       |       |      |  |      |       |      |  |      |       |  |  |  |                                     |  |  |  |       | 
|Netherlands              |  |       | 1,527 |      |  |      | 1,555 |      |  |      | 1,431 |  |  |  | 1,520                               |  |  |  | 1,616 | 
|UK                       |  |       | 1,148 |      |  |      | 1,196 |      |  |      | 1,118 |  |  |  | 967                                 |  |  |  | 824   | 
|Germany                  |  |       | 408   |      |  |      | 428   |      |  |      | 450   |  |  |  | 484                                 |  |  |  | 489   | 
|Denmark                  |  |       | 313   |      |  |      | 309   |      |  |      | 300   |  |  |  | 312                                 |  |  |  | 310   | 
|Norway                   |  |       | 242   |      |  |      | 176   |      |  |      | 199   |  |  |  | 230                                 |  |  |  | 202   | 
|Others                   |  |       | 29    |      |  |      | 20    |      |  |      | 17    |  |  |  | 16                                  |  |  |  | 14    | 
|                         |  |       |       |      |  |      |       |      |  |      |       |  |  |  |                                     |  |  |  |       | 
|                         |  |       | 3,667 |      |  |      | 3,684 |      |  |      | 3,515 |  |  |  | 3,529                               |  |  |  | 3,455 | 
|                         |  |       |       |      |  |      |       |      |  |      |       |  |  |  |                                     |  |  |  |       | 
|Other Eastern Hemisphere |  |       |       |      |  |      |       |      |  |      |       |  |  |  |                                     |  |  |  |       | 
|Oman                     |  |       | 786   |      |  |      | 553   |      |  |      | 459   |  |  |  | 119                                 |  |  |  |      | 
|Malaysia                 |  |       | 664   |      |  |      | 580   |      |  |      | 553   |  |  |  | 634                                 |  |  |  | 597   | 
|Brunei                   |  |       | 508   |      |  |      | 491   |      |  |      | 450   |  |  |  | 455                                 |  |  |  | 480   | 
|New Zealand              |  |       | 461   |      |  |      | 470   |      |  |      | 157   |  |  |  | 148                                 |  |  |  | 129   | 
|Australia                |  |       | 373   |      |  |      | 379   |      |  |      | 367   |  |  |  | 361                                 |  |  |  | 360   | 
|Nigeria                  |  |       | 244   |      |  |      | 219   |      |  |      | 177   |  |  |  | 78                                  |  |  |  | 84    | 
|Egypt                    |  |       | 232   |      |  |      | 248   |      |  |      | 140   |  |  |  | 105                                 |  |  |  | 103   | 
|Others                   |  |       | 135   |      |  |      | 126   |      |  |      | 121   |  |  |  | 113                                 |  |  |  | 95    | 
|                         |  |       |       |      |  |      |       |      |  |      |       |  |  |  |                                     |  |  |  |       | 
|                         |  |       | 3,403 |      |  |      | 3,066 |      |  |      | 2,424 |  |  |  | 2,013                               |  |  |  | 1,848 | 
|                         |  |       |       |      |  |      |       |      |  |      |       |  |  |  |                                     |  |  |  |       | 
|USA                      |  |       | 1,679 |      |  |      | 1,598 |      |  |      | 1,644 |  |  |  | 1,774                               |  |  |  | 1,738 | 
|                         |  |       |       |      |  |      |       |      |  |      |       |  |  |  |                                     |  |  |  |       | 
|Other Western Hemisphere |  |       |       |      |  |      |       |      |  |      |       |  |  |  |                                     |  |  |  |       | 
|Canada                   |  |       | 610   |      |  |      | 614   |      |  |      | 594   |  |  |  | 562                                 |  |  |  | 587   | 
|Others                   |  |       | 64    |      |  |      | 47    |      |  |      | 35    |  |  |  | 46                                  |  |  |  | 51    | 
|                         |  |       |       |      |  |      |       |      |  |      |       |  |  |  |                                     |  |  |  |       | 
|                         |  |       | 674   |      |  |      | 661   |      |  |      | 629   |  |  |  | 608                                 |  |  |  | 638   | 
|                         |  |       |       |      |  |      |       |      |  |      |       |  |  |  |                                     |  |  |  |       | 
|Total                    |  |       | 9,423 |      |  |      | 9,009 |      |  |      | 8,212 |  |  |  | 7,924                               |  |  |  | 7,679 | 
|                         |  |       |       |      |  |      |       |      |  |      |       |  |  |  |                                     |  |  |  |       | 
|                        
|                         |  |       |       |      |  |      |       |      |  |      |       |  |  |  | million standard cubic metres daily
|Europe                   |  |       |       |      |  |      |       |      |  |      |       |  |  |  |                                     |  |  |  |       | 
|Netherlands              |  |       | 43    |      |  |      | 44    |      |  |      | 40    |  |  |  | 43                                  |  |  |  | 46    | 
|UK                       |  |       | 32    |      |  |      | 34    |      |  |      | 32    |  |  |  | 27                                  |  |  |  | 23    | 
|Germany                  |  |       | 12    |      |  |      | 12    |      |  |      | 13    |  |  |  | 14                                  |  |  |  | 14    | 
|Denmark                  |  |       | 9     |      |  |      | 9     |      |  |      | 8     |  |  |  | 9                                   |  |  |  | 9     | 
|Norway                   |  |       | 7     |      |  |      | 5     |      |  |      | 6     |  |  |  | 7                                   |  |  |  | 6     | 
|Others                   |  |       | 1     |      |  |      | *     |      |  |      | *     |  |  |  | *                                   |  |  |  | *     | 
|                         |  |       |       |      |  |      |       |      |  |      |       |  |  |  |                                     |  |  |  |       | 
|                         |  |       | 104   |      |  |      | 104   |      |  |      | 99    |  |  |  | 100                                 |  |  |  | 98    | 
|                         |  |       |       |      |  |      |       |      |  |      |       |  |  |  |                                     |  |  |  |       | 
|Other Eastern Hemisphere |  |       |       |      |  |      |       |      |  |      |       |  |  |  |                                     |  |  |  |       | 
|Oman                     |  |       | 22    |      |  |      | 16    |      |  |      | 13    |  |  |  | 4                                   |  |  |  |      | 
|Malaysia                 |  |       | 19    |      |  |      | 16    |      |  |      | 16    |  |  |  | 18                                  |  |  |  | 17    | 
|Brunei                   |  |       | 14    |      |  |      | 14    |      |  |      | 13    |  |  |  | 13                                  |  |  |  | 13    | 
|New Zealand              |  |       | 13    |      |  |      | 13    |      |  |      | 4     |  |  |  | 4                                   |  |  |  | 4     | 
|Australia                |  |       | 11    |      |  |      | 11    |      |  |      | 10    |  |  |  | 10                                  |  |  |  | 10    | 
|Nigeria                  |  |       | 7     |      |  |      | 6     |      |  |      | 5     |  |  |  | 2                                   |  |  |  | 2     | 
|Egypt                    |  |       | 7     |      |  |      | 7     |      |  |      | 4     |  |  |  | 3                                   |  |  |  | 3     | 
|Others                   |  |       | 3     |      |  |      | 4     |      |  |      | 4     |  |  |  | 3                                   |  |  |  | 3     | 
|                         |  |       |       |      |  |      |       |      |  |      |       |  |  |  |                                     |  |  |  |       | 
|                         |  |       | 96    |      |  |      | 87    |      |  |      | 69    |  |  |  | 57                                  |  |  |  | 52    | 
|                         |  |       |       |      |  |      |       |      |  |      |       |  |  |  |                                     |  |  |  |       | 
|USA                      |  |       | 48    |      |  |      | 45    |      |  |      | 46    |  |  |  | 50                                  |  |  |  | 49    | 
|                         |  |       |       |      |  |      |       |      |  |      |       |  |  |  |                                     |  |  |  |       | 
|Other Western Hemisphere |  |       |       |      |  |      |       |      |  |      |       |  |  |  |                                     |  |  |  |       | 
|Canada                   |  |       | 17    |      |  |      | 18    |      |  |      | 17    |  |  |  | 16                                  |  |  |  | 17    | 
|Others                   |  |       | 2     |      |  |      | 1     |      |  |      | 1     |  |  |  | 1                                   |  |  |  | 1     | 
|                         |  |       |       |      |  |      |       |      |  |      |       |  |  |  |                                     |  |  |  |       | 
|                         |  |       | 19    |      |  |      | 19    |      |  |      | 18    |  |  |  | 17                                  |  |  |  | 18    | 
|                         |  |       |       |      |  |      |       |      |  |      |       |  |  |  |                                     |  |  |  |       | 
|Total                    |  |       | 267   |      |  |      | 255   |      |  |      | 232   |  |  |  | 224                                 |  |  |  | 217   | 
|                         |  |       |       |      |  |      |       |      |  |      |       |  |  |  |                                     |  |  |  |       | 



---

|* |  | Less than one million cubic metres daily
|- |  | ----------------------------------------



|a |  | By country of origin from gas produced by Group and associated companies
(Group share). In those countries where production sharing contracts operate,
the figures shown represent the entitlements of the Group companies concerned
under those contracts.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|b |  | The acquisition of Enterprise contributed some 180 thousand barrels of oil equivalent
per day to 2002 total hydrocarbon production (9 months of production averaged
over the full year). Production came mainly from assets in the UK and Norway.          

10 Royal Dutch/Shell Group of Companies - Business and Property



---



##### Table of Contents



Location of activities(at December 31, 2002)a

---

ShellEurope
    
    Exploration
    
    Production
    
    OperatorbAustria
    
    

l
    
    
    

l
    
    
    

lDenmark
    
    

l
    
    
    
    lGermany
    
    
    ll
    
    
    
    ll
    
    
    

lIreland, Republic of
    l
    
    
    
    
    
    
    
    lItaly
    
    
    ll
    
    
    

l
    
    
    
    llNetherlands
    
    
    ll
    
    
    
    ll
    
    
    
    llNorway
    
    
    l
    
    
    
    l
    
    
    
    lSpain
    
    
    lUK
    
    
    l
    
    
    
    l
    
    
    
    lOther
Eastern HemisphereAlgeria
    
    

lAngola
    
    
    lAustralia
    
    
    l
    
    
    
    l
    
    
    
    lAzerbaijan
    
    
    lBangladesh
    
    
    ll
    
    
    
    l
    
    
    
    llBrunei
    
    
    ll
    
    
    
    ll
    
    
    
    llCameroon
    
    
    l
    
    
    
    l
    
    
    
    lChina
    
    
    ll
    
    
    
    l
    
    
    
    ll




ShellExploration
    
    Production
    
    OperatorbEgypt
    
    
    ll
    
    
    
    ll
    
    
    
    llGabon
    
    
    ll
    
    
    

l
    
    
    
    llIran
    
    
    
    
    
    
    l
    
    
    
    lKazakhstan
    
    
    llMalaysia
    
    
    l
    
    
    
    l
    
    
    
    lMauritania
    
    
    lMorocco
    
    
    l
    
    
    
    
    
    
    
    lNew Zealand
    
    
    ll
    
    
    
    ll
    
    
    
    llNigeria
    
    
    ll
    
    
    
    ll
    
    
    
    llOman
    
    

l
    
    
    

l
    
    
    

lPakistan
    
    
    ll
    
    
    

l
    
    
    
    lPapua New Guinea
    llPhilippines
    
    
    l
    
    
    
    l
    
    
    
    lRussia
    
    
    ll
    
    
    
    ll
    
    
    
    llSenegal
    
    
    lSyria
    
    
    
    
    
    

l
    
    
    

lThailand
    
    

l
    
    
    

l
    
    
    
    llUnited Arab Emirates
    l
    
    
    

l




ShellExploration
    
    Production
    
    OperatorbUSA
    
    
    ll
    
    
    
    ll
    
    
    
    llOther Western HemisphereArgentina
    
    

l
    
    
    

l
    
    
    

lBrazil
    
    
    l
    
    
    
    l
    
    
    
    lCanada
    
    
    ll
    
    
    
    ll
    
    
    

lTrinidad and Tobago
    l
    
    
    
    
    
    
    
    lVenezuela
    
    
    
    
    
    
    l
    
    
    
    l  l = Onshore   l = Offshore






|a |  | Including associated companies.                                                                                                                           
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|b |  | In several countries where Shell operator
is indicated, a Group interest company is operator of some but not all
exploration and/or production ventures.

Royal Dutch/Shell Group of Companies - Business and Property 11



---



##### Table of Contents



|                                          |  |                |        |                |  |           |        |             |  |       |         |     |  |       |         |     |  |  |        |      |  |  |        |  |  |  |         |  |  |  |        | 
|----------------------------------------- |  | -------------- | ------ | -------------- |  | --------- | ------ | ----------- |  | ----- | ------- | --- |  | ----- | ------- | --- |  |  | ------ | ---- |  |  | ------ |  |  |  | ------- |  |  |  | ------ | 
|Oil and gas acreage (at December 31)a,b,c |  | thousand acres |        | thousand acres
|                                          |  |                |        |               
|                                          |  |                |        |                |  |           |        |             |  | 2002  |         |     |  |       |         |     |  |  |        | 2001
|                                          |  | Developed      |        | Undeveloped    |  | Developed |        | Undeveloped
|                                          |  |                |        |                |  |           |        |            
|                                          |  | Gross          |        | Net            |  | Gross     |        | Net         |  | Gross |         | Net |  | Gross |         | Net
|                                          |  |                |        |                |  |           |        |             |  |       |         |     |  |       |         |    
|Europe                                    |  |                | 10,417 |                |  |           | 3,259  |             |  |       | 19,752  |     |  |       | 6,930   |     |  |  | 9,570  |      |  |  | 3,031  |  |  |  | 12,616  |  |  |  | 4,581  | 
|Other Eastern Hemisphere                  |  |                | 45,701 |                |  |           | 15,185 |             |  |       | 162,407 |     |  |       | 68,740  |     |  |  | 44,760 |      |  |  | 14,821 |  |  |  | 160,957 |  |  |  | 69,801 | 
|USA                                       |  |                | 1,557  |                |  |           | 754    |             |  |       | 4,670   |     |  |       | 3,183   |     |  |  | 1,599  |      |  |  | 702    |  |  |  | 3,931   |  |  |  | 2,609  | 
|Other Western Hemisphere                  |  |                | 832    |                |  |           | 509    |             |  |       | 33,338  |     |  |       | 22,841  |     |  |  | 767    |      |  |  | 492    |  |  |  | 35,709  |  |  |  | 22,001 | 
|                                          |  |                |        |                |  |           |        |             |  |       |         |     |  |       |         |     |  |  |        |      |  |  |        |  |  |  |         |  |  |  |        | 
|                                          |  |                | 58,507 |                |  |           | 19,707 |             |  |       | 220,167 |     |  |       | 101,694 |     |  |  | 56,696 |      |  |  | 19,046 |  |  |  | 213,213 |  |  |  | 98,992 | 
|                                          |  |                |        |                |  |           |        |             |  |       |         |     |  |       |         |     |  |  |        |      |  |  |        |  |  |  |         |  |  |  |        | 

Number of productive wells(at December 31)a,b

|                         |  |       |        |     |  |       |        |     |  |       |       |     |  |       |       |     |  |  |        |      |  |  |        |  |  |  |       |  |  |  |       | 
|------------------------ |  | ----- | ------ | --- |  | ----- | ------ | --- |  | ----- | ----- | --- |  | ----- | ----- | --- |  |  | ------ | ---- |  |  | ------ |  |  |  | ----- |  |  |  | ----- | 
|                         |  |       |        |     |  |       |        |     |  | 2002  |       |     |  |       |       |     |  |  |        | 2001
|                         |  | Oil   |        | Gas |  | Oil   |        | Gas
|                         |  |       |        |     |  |       |        |    
|                         |  | Gross |        | Net |  | Gross |        | Net |  | Gross |       | Net |  | Gross |       | Net
|                         |  |       |        |     |  |       |        |     |  |       |       |     |  |       |       |    
|Europe                   |  |       | 2,002  |     |  |       | 533    |     |  |       | 1,454 |     |  |       | 458   |     |  |  | 1,618  |      |  |  | 429    |  |  |  | 1,299 |  |  |  | 427   | 
|Other Eastern Hemisphere |  |       | 6,172  |     |  |       | 2,257  |     |  |       | 426   |     |  |       | 223   |     |  |  | 6,066  |      |  |  | 2,169  |  |  |  | 375   |  |  |  | 197   | 
|USA                      |  |       | 15,686 |     |  |       | 8,294  |     |  |       | 945   |     |  |       | 686   |     |  |  | 16,717 |      |  |  | 8,511  |  |  |  | 956   |  |  |  | 658   | 
|Other Western Hemisphere |  |       | 112    |     |  |       | 110    |     |  |       | 314   |     |  |       | 259   |     |  |  | 86     |      |  |  | 86     |  |  |  | 298   |  |  |  | 251   | 
|                         |  |       |        |     |  |       |        |     |  |       |       |     |  |       |       |     |  |  |        |      |  |  |        |  |  |  |       |  |  |  |       | 
|                         |  |       | 23,972 |     |  |       | 11,194 |     |  |       | 3,139 |     |  |       | 1,626 |     |  |  | 24,487 |      |  |  | 11,195 |  |  |  | 2,928 |  |  |  | 1,533 | 
|                         |  |       |        |     |  |       |        |     |  |       |       |     |  |       |       |     |  |  |        |      |  |  |        |  |  |  |       |  |  |  |       | 

Number of net productive wells and
dry holes drilleda

|                         |  |            |     |     |  |            |    |     |  |            |     |      |  |            |    |     |  |            |     |     |  |  |    |      |  |  |     |  |  |      |    |  |  |  |     |  |  |  |    | 
|------------------------ |  | ---------- | --- | --- |  | ---------- | -- | --- |  | ---------- | --- | ---- |  | ---------- | -- | --- |  | ---------- | --- | --- |  |  | -- | ---- |  |  | --- |  |  | ---- | -- |  |  |  | --- |  |  |  | -- | 
|                         |  |            |     |     |  | 2002       |    |     |  |            |     | 2001 |  |            |    |     |  | 2000       |     |     |  |  |    | 1999 |  |  |     |  |  | 1998
|                         |  | Productive |     | Dry |  | Productive |    | Dry |  | Productive |     | Dry  |  | Productive |    | Dry |  | Productive |     | Dry
|                         |  |            |     |     |  |            |    |     |  |            |     |      |  |            |    |     |  |            |     |    
|Exploration              |  |            |     |     |  |            |    |     |  |            |     |      |  |            |    |     |  |            |     |     |  |  |    |      |  |  |     |  |  |      |    |  |  |  |     |  |  |  |    | 
|Europe                   |  |            | 3   |     |  |            | 4  |     |  |            | 2   |      |  |            | 4  |     |  |            | 3   |     |  |  | 3  |      |  |  | 5   |  |  |      | 2  |  |  |  | 6   |  |  |  | 6  | 
|Other Eastern Hemisphere |  |            | 12  |     |  |            | 11 |     |  |            | 17  |      |  |            | 14 |     |  |            | 15  |     |  |  | 11 |      |  |  | 13  |  |  |      | 16 |  |  |  | 12  |  |  |  | 18 | 
|USA                      |  |            | 10  |     |  |            | 4  |     |  |            | 2   |      |  |            | 4  |     |  |            | 9   |     |  |  | 4  |      |  |  | 8   |  |  |      | 9  |  |  |  | 18  |  |  |  | 16 | 
|Other Western Hemisphere |  |            | 2   |     |  |            | 2  |     |  |            | 3   |      |  |            | 3  |     |  |            | 1   |     |  |  | 2  |      |  |  |    |  |  |      | 13 |  |  |  | 6   |  |  |  | 9  | 
|                         |  |            |     |     |  |            |    |     |  |            |     |      |  |            |    |     |  |            |     |     |  |  |    |      |  |  |     |  |  |      |    |  |  |  |     |  |  |  |    | 
|                         |  |            | 27  |     |  |            | 21 |     |  |            | 24  |      |  |            | 25 |     |  |            | 28  |     |  |  | 20 |      |  |  | 26  |  |  |      | 40 |  |  |  | 42  |  |  |  | 49 | 
|                         |  |            |     |     |  |            |    |     |  |            |     |      |  |            |    |     |  |            |     |     |  |  |    |      |  |  |     |  |  |      |    |  |  |  |     |  |  |  |    | 
|Development              |  |            |     |     |  |            |    |     |  |            |     |      |  |            |    |     |  |            |     |     |  |  |    |      |  |  |     |  |  |      |    |  |  |  |     |  |  |  |    | 
|Europe                   |  |            | 55  |     |  |            |   |     |  |            | 30  |      |  |            | 10 |     |  |            | 19  |     |  |  |   |      |  |  | 32  |  |  |      | 2  |  |  |  | 46  |  |  |  | 1  | 
|Other Eastern Hemisphere |  |            | 166 |     |  |            | 13 |     |  |            | 165 |      |  |            | 11 |     |  |            | 152 |     |  |  | 10 |      |  |  | 149 |  |  |      | 2  |  |  |  | 179 |  |  |  | 6  | 
|USA                      |  |            | 559 |     |  |            | 1  |     |  |            | 549 |      |  |            | 2  |     |  |            | 492 |     |  |  | 3  |      |  |  | 290 |  |  |      |   |  |  |  | 555 |  |  |  | 8  | 
|Other Western Hemisphere |  |            | 31  |     |  |            |   |     |  |            | 25  |      |  |            |   |     |  |            | 10  |     |  |  | 1  |      |  |  | 14  |  |  |      | 2  |  |  |  | 49  |  |  |  |   | 
|                         |  |            |     |     |  |            |    |     |  |            |     |      |  |            |    |     |  |            |     |     |  |  |    |      |  |  |     |  |  |      |    |  |  |  |     |  |  |  |    | 
|                         |  |            | 811 |     |  |            | 14 |     |  |            | 769 |      |  |            | 23 |     |  |            | 673 |     |  |  | 14 |      |  |  | 485 |  |  |      | 6  |  |  |  | 829 |  |  |  | 15 | 
|                         |  |            |     |     |  |            |    |     |  |            |     |      |  |            |    |     |  |            |     |     |  |  |    |      |  |  |     |  |  |      |    |  |  |  |     |  |  |  |    | 



|a |  | Including associated companies.                                                                                                                                                                                                                                        
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|b |  | The term gross relates to the total activity in which Group and associated companies have an interest, and the term
net relates to the sum of the fractional interests owned by Group companies
plus the Group share of associated companies fractional interests.
| 
|c |  | One thousand acres equals approximately four square kilometres.                                                                                                                                                                                                        

12 Royal Dutch/Shell Group of Companies - Business and Property



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##### Table of Contents



|               |  |                |        |                |  |             |         |           |  |             |         |       |  |     |        |       |  |     |        |       |  |     |         |  |  |      |         |  |  |  |        |  |  |  |        |  |  |  |         |  |  |  |         | 
|-------------- |  | -------------- | ------ | -------------- |  | ----------- | ------- | --------- |  | ----------- | ------- | ----- |  | --- | ------ | ----- |  | --- | ------ | ----- |  | --- | ------- |  |  | ---- | ------- |  |  |  | ------ |  |  |  | ------ |  |  |  | ------- |  |  |  | ------- | 
|thousand acres |  | thousand acres |        | thousand acres
|               |  |                |        |               
|               |  |                |        |                |  | 2000        |         |           |  |             |         |       |  |     |        | 1999  |  |     |        |       |  |     |         |  |  | 1998
|Developed      |  | Undeveloped    |        | Developed      |  | Undeveloped |         | Developed |  | Undeveloped
|               |  |                |        |                |  |             |         |           |  |            
|Gross          |  | Net            |        | Gross          |  | Net         |         | Gross     |  | Net         |         | Gross |  | Net |        | Gross |  | Net |        | Gross |  | Net
|               |  |                |        |                |  |             |         |           |  |             |         |       |  |     |        |       |  |     |        |       |  |    
|9,399          |  |                | 2,973  |                |  |             | 13,951  |           |  |             | 4,920   |       |  |     | 10,162 |       |  |     | 3,218  |       |  |     | 16,697  |  |  |      | 5,790   |  |  |  | 10,078 |  |  |  | 3,189  |  |  |  | 20,141  |  |  |  | 7,640   | 
|44,761         |  |                | 14,534 |                |  |             | 131,644 |           |  |             | 68,854  |       |  |     | 44,680 |       |  |     | 14,530 |       |  |     | 135,798 |  |  |      | 75,106  |  |  |  | 44,896 |  |  |  | 14,946 |  |  |  | 158,345 |  |  |  | 86,520  | 
|1,967          |  |                | 934    |                |  |             | 4,280   |           |  |             | 2,743   |       |  |     | 3,642  |       |  |     | 1,245  |       |  |     | 6,074   |  |  |      | 3,499   |  |  |  | 4,290  |  |  |  | 1,331  |  |  |  | 8,054   |  |  |  | 4,485   | 
|1,198          |  |                | 824    |                |  |             | 49,219  |           |  |             | 27,368  |       |  |     | 1,149  |       |  |     | 850    |       |  |     | 61,344  |  |  |      | 33,215  |  |  |  | 1,430  |  |  |  | 1,052  |  |  |  | 39,910  |  |  |  | 25,699  | 
|               |  |                |        |                |  |             |         |           |  |             |         |       |  |     |        |       |  |     |        |       |  |     |         |  |  |      |         |  |  |  |        |  |  |  |        |  |  |  |         |  |  |  |         | 
|57,325         |  |                | 19,265 |                |  |             | 199,094 |           |  |             | 103,885 |       |  |     | 59,633 |       |  |     | 19,843 |       |  |     | 219,913 |  |  |      | 117,610 |  |  |  | 60,694 |  |  |  | 20,518 |  |  |  | 226,450 |  |  |  | 124,344 | 
|               |  |                |        |                |  |             |         |           |  |             |         |       |  |     |        |       |  |     |        |       |  |     |         |  |  |      |         |  |  |  |        |  |  |  |        |  |  |  |         |  |  |  |         | 

|       |  |     |        |       |  |     |       |       |  |      |       |       |  |     |        |       |  |     |        |       |  |     |       |      |  |     |       |  |  |  |        |     |  |  |        |  |  |      |       |  |  |  |       | 
|------ |  | --- | ------ | ----- |  | --- | ----- | ----- |  | ---- | ----- | ----- |  | --- | ------ | ----- |  | --- | ------ | ----- |  | --- | ----- | ---- |  | --- | ----- |  |  |  | ------ | --- |  |  | ------ |  |  | ---- | ----- |  |  |  | ----- | 
|       |  |     |        |       |  |     |       |       |  | 2000 |       |       |  |     |        |       |  |     |        |       |  |     |       | 1999 |  |     |       |  |  |  |        |     |  |  |        |  |  | 1998
|       |  | Oil |        |       |  |     |       | Gas   |  |      |       |       |  | Oil |        |       |  |     |        | Gas   |  |     |       |      |  | Oil |       |  |  |  |        | Gas
|Gross  |  | Net |        | Gross |  | Net |       | Gross |  | Net  |       | Gross |  | Net |        | Gross |  | Net |        | Gross |  | Net
|       |  |     |        |       |  |     |       |       |  |      |       |       |  |     |        |       |  |     |        |       |  |    
|1,640  |  |     | 442    |       |  |     | 1,349 |       |  |      | 438   |       |  |     | 1,642  |       |  |     | 447    |       |  |     | 1,359 |      |  |     | 436   |  |  |  | 1,603  |     |  |  | 437    |  |  |      | 1,334 |  |  |  | 424   | 
|5,910  |  |     | 2,097  |       |  |     | 332   |       |  |      | 159   |       |  |     | 6,299  |       |  |     | 2,271  |       |  |     | 352   |      |  |     | 153   |  |  |  | 6,037  |     |  |  | 2,249  |  |  |      | 275   |  |  |  | 119   | 
|17,870 |  |     | 8,870  |       |  |     | 1,044 |       |  |      | 627   |       |  |     | 28,165 |       |  |     | 11,636 |       |  |     | 1,631 |      |  |     | 845   |  |  |  | 27,818 |     |  |  | 10,679 |  |  |      | 1,909 |  |  |  | 938   | 
|338    |  |     | 193    |       |  |     | 274   |       |  |      | 230   |       |  |     | 413    |       |  |     | 267    |       |  |     | 259   |      |  |     | 223   |  |  |  | 1,009  |     |  |  | 650    |  |  |      | 260   |  |  |  | 226   | 
|       |  |     |        |       |  |     |       |       |  |      |       |       |  |     |        |       |  |     |        |       |  |     |       |      |  |     |       |  |  |  |        |     |  |  |        |  |  |      |       |  |  |  |       | 
|25,758 |  |     | 11,602 |       |  |     | 2,999 |       |  |      | 1,454 |       |  |     | 36,519 |       |  |     | 14,621 |       |  |     | 3,601 |      |  |     | 1,657 |  |  |  | 36,467 |     |  |  | 14,015 |  |  |      | 3,778 |  |  |  | 1,707 | 
|       |  |     |        |       |  |     |       |       |  |      |       |       |  |     |        |       |  |     |        |       |  |     |       |      |  |     |       |  |  |  |        |     |  |  |        |  |  |      |       |  |  |  |       | 

Number of wells drilling(at December 31, 2002)a,b

|                         |  |             |    |             |  |       |   |     |  |       |     |     |  |  |    |  |  |  |     |  |  |  |    | 
|------------------------ |  | ----------- | -- | ----------- |  | ----- | - | --- |  | ----- | --- | --- |  |  | -- |  |  |  | --- |  |  |  | -- | 
|                         |  | Exploration |    | Development |  | Total
|                         |  |             |    |             |  |      
|                         |  | Gross       |    | Net         |  | Gross |   | Net |  | Gross |     | Net
|                         |  |             |    |             |  |       |   |     |  |       |     |    
|Europe                   |  |             | 2  |             |  |       | 1 |     |  |       | 31  |     |  |  | 9  |  |  |  | 33  |  |  |  | 10 | 
|Other Eastern Hemisphere |  |             | 9  |             |  |       | 2 |     |  |       | 63  |     |  |  | 24 |  |  |  | 72  |  |  |  | 26 | 
|USA                      |  |             | 6  |             |  |       | 3 |     |  |       | 16  |     |  |  | 10 |  |  |  | 22  |  |  |  | 13 | 
|Other Western Hemisphere |  |             | 3  |             |  |       | 2 |     |  |       | 7   |     |  |  | 5  |  |  |  | 10  |  |  |  | 7  | 
|                         |  |             |    |             |  |       |   |     |  |       |     |     |  |  |    |  |  |  |     |  |  |  |    | 
|                         |  |             | 20 |             |  |       | 8 |     |  |       | 117 |     |  |  | 48 |  |  |  | 137 |  |  |  | 56 | 
|                         |  |             |    |             |  |       |   |     |  |       |     |     |  |  |    |  |  |  |     |  |  |  |    | 



|a |  | Including associated companies.                                                                                                                                                                                                                                        
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|b |  | The term gross relates to the total activity in which Group and associated companies have an interest, and the term
net relates to the sum of the fractional interests owned by Group companies
plus the Group share of associated companies fractional interests.

(b)  Major oil and gas interestsMajor oil and gas interests as well as recent developments in countries where
Group or associated companies have exploration and production interests are
summarised, by country, in the following pages. Certain aspects of the
legislation, regulations or agreements affecting the activities of the
significant companies are also included.

Europe

DenmarkA Group company has a 46% non-operator interest in a producing
concession due to expire in 2012, as well as varying percentage interests in 6
(non-operated) exploration licences.

GermanyA Group company holds a 50% interest in the Brigitta & Elwerath
Betriebsfuehrungsgesellschaft (BEB) joint venture (50:50) which is the major
producer of oil and gas in Germany. Since September 2002, the BEB upstream and
operational midstream activities have been contracted out to a service company.
Activities include onshore and offshore exploration and production activities,
gas storage, the operation of two large sour gas treatment plants, numerous
compression stations and some 3,000km of pipelines. BEB is also one of the
major transmission and distribution companies in Germany. (See also page 21).

Exploration and Production licences are awarded under the terms of Germanys
Federal Mining Law. Most licences are awarded to more than one company and are
governed by consortia (JVs). Operatorship is normally awarded to the party
holding the highest equity share. BEB is involved in some 30 consortia with
varying interests and is the main operator in Germany. Further German interests
include the 43% Group share in the outside operated Deutsche Offshore
Konsortium. Royalties are determined by the individual German states on a
yearly basis and are different for the production of natural gas and oil.
Royalty incentives are given for the development of tight gas reservoirs.

Royal Dutch/Shell Group of Companies - Business and Property 13



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IrelandDuring 2002 EO Ireland (Group interest 100%) was acquired as a part of
the Groups acquisition of Enterprise Oil. The main assets are offshore, north
west of Ireland and include a 45% interest in the Corrib project (a potential
gas development) and exploration prospects that include the Dooish discovery.

ItalyDuring 2002 EO Italy (Group interest 100%) was acquired as a part of the
Groups acquisition of Enterprise Oil. The main assets are onshore in southern
Italy and include various interests in producing assets (Monte Alpi, Monte
Enoch and Cerro Falcone), development projects (including Tempa Rossa) and
nearby exploration prospects.

NetherlandsThe Group share of natural gas and crude oil is produced by
Nederlandse Aardolie Maatschappij B.V. (NAM), (Group interest 50%) in a 50:50
joint venture. An important part of NAMs gas production is from its very large
onshore Groningen gas field in which the Dutch State has a 40% financial
interest.

NAMs production of oil and gas is covered by concessions (onshore) and
production licences (offshore). Government participation in development and
production varies between 0% and 50%, depending mainly on the legislation
applicable when the concessions or licences were granted and whether the
participation covered gas or oil. Production is preceded by a drilling permit
(onshore) or an exploration licence (offshore), the duration of which, since
1997, varies with the work programme that has to be submitted with the
application for a permit or licence. In practice, this means a period of about
3 to 10 years, which can be shortened by the authorities when the exploration
effort falls short of the licence or permit programme. Upon making a commercial
discovery, a concession (onshore) or production licence (offshore) is granted.
The onshore concessions are not currently limited in time but the duration of
the offshore licenses vary with the estimated production period  normally a
period of 15 to 45 years.

NorwayA/S Norske Shell (Group interest 100%) holds an interest in a number of
Production Licences (PL), three of which encompass currently producing oil and
gas fields, Statfjord area (PL 37, expiring in 2009), Draugen area (PL 93,
expiring in 2024), and Troll area (PL 54, expiring in 2030). A/S Norske Shell
also holds interests in three non-producing licences (PL 208, PL 209 and PL
250, expiring in 2039, 2041 and 2041 respectively) which straddle the large
undeveloped Ormen Lange gas field discovered in 1997. Shell International
Pipelines Inc. (Group Interest 100%) holds interests in gas transportation and
processing systems (pipelines and terminals). The licence period for these
assets expire in the period from 2010 to 2020.

Various Norwegian assets were part of the Groups acquisition of Enterprise Oil
in 2002, including 10 producing fields, the largest of which were Jotun (45%
interest) and Valhall (28.09% interest). Also during 2002 A/S Norske Shell
increased their ownership interest in the Draugen area to 26.2%.

United KingdomShell UK Limited (Group interest 100%) is one of the largest
integrated oil and gas exploration and production companies operating in the
UK. It operates in the North Sea on behalf of a 50:50 joint venture and has
interests in the UK Continental Shelf on behalf of this venture and with other
partners.

Most of Shell UKs production comes from the North Sea. Natural gas comes from
associated gas in mixed oil and gas fields in the northern North Sea and gas
fields in the southern sector of the North Sea, whereas crude oil comes from
the central and northern fields, which include the large Brent field. Shell UK
also has interests, as a non-operator partner, in another joint venture in the
North Sea in the Atlantic margin, West of Shetlands. Group production in the
West of Shetlands comes from the Schiehallion/Loyal fields. Licences issued
before August 20, 1976 were for an initial period of six years and, following
successful exploration, were extended for a further 40 years in respect of half
the original licence area. Licences issued between August 20, 1976 and June 13,
1980 were for an initial period of four years followed by a second period of
three years. In cases of successful exploration, these licences were extended
for a further 30 years after relinquishment of two-thirds of the acreage. From
June 14, 1980, licences were granted for an initial period of six years (nine
years for deepwater) and in successful cases extended for a further 30 years
(40 years for deepwater) in respect of no more than half the licence area.
Licences issued since July 1988 carry an additional requirement that if, after
12 years of the 30-year period, no field development has been approved, the
licence must be surrendered. No royalty is payable on production from fields
for which development approval was
granted after April 1982; royalties for other fields has been abolished with
effect from January 2003. In August 2002, and with effect from April 2002, a
new oil tax on firms operating in the British North Sea was enacted raising the
marginal tax rate from 30% to 40%.

14 Royal Dutch/Shell Group of Companies - Business and Property



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The acquisition of Enterprise Oil in 2002 for a cash consideration of $5.3
billion was the most significant change to the Groups upstream portfolio,
adding new developments and exploration acreage in Ireland, Italy, Norway, the
UK, the USA, Brazil and Russia (see respective write-ups in this section). In
the UK, interest in various exploratory and producing assets such as Pierce,
Nelson and Beryl, was acquired as part of the Groups acquisition of Enterprise
Oil.

Also during 2002 Shell UK increased their ownership interest in the Goldeneye
development from 41.5% to 48%.

Other Eastern Hemisphere

Abu DhabiCrude oil and natural gas liquids are produced by the Abu Dhabi
Company for Onshore Oil Operations in which a Group companys concessionary
share is 9.5% (licence expiry in 2014), arising from a 23.75% Group interest in
the Abu Dhabi Petroleum Company, which in turn holds a 40% interest in the
concession granted by the Abu Dhabi government. A Group company has a 15%
interest in Abu Dhabi Gas Industries Limited, which extracts propane and
butane, as well as heavier liquid hydrocarbons, for export sales from wet
associated natural gas produced by Abu Dhabi Petroleum Company.

AustraliaShell Development Australia (SDA) (Group interest 100%) has interests
in some 50 offshore production and exploration licences in the North-West Shelf
(NWS), in the Browse basin and Timor Sea area. The interests are held by SDA
directly, or indirectly through its shareholding (34%) in Woodside Petroleum
Ltd. (Woodside) which is the operator on behalf of six joint-venture partners
of the NWS gas/condensate and oil fields. (See also page 21.) Gas and
condensate are produced from the North Rankin and Goodwyn facilities to an
onshore treatment and LNG facility at Burrup. Woodside is also the operator of
the producing Laminaria and Corallina fields situated in the Timor Sea.
Together with its partner Woodside, SDA also has interests in significant
liquid-rich gas fields in the Timor Sea as well as the Browse basin.

SDA is also a participant in another joint venture that carries out exploration
and production operations in the NWS region. As party to this joint venture,
SDA has non-operator interest (ranging from 12.5% to 28.57%) in the significant
gas reserves known as greater Gorgon, which are situated West of Barrow Island.

BruneiA Group company is a 50% shareholder in Brunei Shell Petroleum Company
Sendirian Berhad (the other 50% shareholder being the Brunei government). The
company, which has renewable long-term oil and gas concession rights both
onshore and offshore Brunei, sells most of its natural gas production to Brunei
LNG Sendirian Berhad (Group interest 25%). (See also page 21.)

A Group company has a 35% share in the non-operated Block B Joint Venture
(BBJV) concession where gas is produced from the Maharaja Lela Field.

EgyptShell Egypt (Group interest 100%) participates in four exploration
concessions (operator in three and non-operator in Rosetta) and in five
development leases (operator in four and non-operator in Rashid). All
concessions and leases are granted on the basis of production-sharing
agreements. Included in Shell Egypts portfolio is an 84% interest in the
North-eastern Mediterranean deepwater concession. Shell Egypt has a 50%
interest in Badr Petroleum Company (Bapetco), a joint venture company with the
Egyptian General Petroleum Corporation (the Egyptian national oil company).
Bapetco operates two producing fields, Badr El Din and Obaiyed.

GabonShell Gabon (Group interest 75%) has interests in 6 onshore mining
concessions/exploitation permits, two of which
(Rabi/Kounga and Gamba/Ivinga) are operated by the company. The Rabi/Kounga
concession expires in 2007, Gamba/Ivinga in 2042; all other concessions expire
between 2010 and 2018. Production in Gabon is dominated by the Rabi field,
which is operated by Shell Gabon holding 42.5% equity in the field. Shell
Gabons portfolio also includes 4 exploration permits, one around the
Gamba/Ivinga concession, two near the Rabi field, and one directly offshore
Libreville.

Two Group companies Shell Offshore North Gabon BV (SONG) and Shell Offshore
Gabon BV (SOSG) hold 7 permits in the Ultra-Deepwater areas in the north and
south.

MalaysiaFour 100%-owned Group companies have production-sharing contracts with
the state oil company Petronas. In most of these contracts Petronas Carigali
Sendirian Berhad (PCSB), a 100% Petronas subsidiary, is the sole joint-venture
partner. One Group company, Sarawak Shell Berhad (SSB) is the operator, with a
50% equity stake, of five non-associated producing gas fields. The majority of
the gas is supplied to Malaysian LNG Sendirian Berhad (Group interest 15%) for
deliveries of liquefied natural gas to customers mainly in Japan and Korea.
(See page 22.) SSB operates one oil field (D35) and has a 50% equity stake in
the non-operated

Royal Dutch/Shell Group of Companies - Business and Property 15



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Baram Delta production-sharing contract. SSB has exploration interests in the
deepwater SK-E block and shallow-water blocks SK-307, SK-308 and SK-8. SSB also
holds exploration acreage in SB-301, SB-J and the deepwater block SB-G. Sabah
Shell Petroleum Company (SSPC) operates five producing fields in Sabah waters
of which Kinabalu (80% equity share) is the largest. SSPC and Shell Sabah
Selatan Sdn Bhd (SSS) also have a production-sharing contract for the
exploration and production in Block SB-303, offshore Sabah. Shell Exploration
and Production Malaysia (SEPM) operates an exploration license in Peninsula
Malaysia (PM-303) where they also have 50% interest in Block PM-301/302.

New ZealandShell New Zealand BV (SNZ) (Group interest 100%) has 77.5% interest
in the production licences for the large offshore Maui gas field, in which
another wholly owned Group company has a further 6.25% indirect interest, and a
50% interest in the onshore Kapuni gas field. The gas produced is sold
domestically, mainly under long-term contracts. SNZ also has interests in other
exploration licence areas in the Taranaki Basin. All of these interests are
operated by Shell Todd Oil Services Ltd, a service company (Group interest
50%).

During 2002 the Group completed the divestment of a number of New Zealand
interests which were a condition of the New Zealand Commerce Commission
granting approval for the acquisition of Fletcher Challenge Energy which was
completed in 2001.

NigeriaThe Shell Petroleum Development Company of Nigeria Ltd. (SPDC) (Group
interest 100%) is operator of a joint venture (Group interest 30%) with the
Nigerian National Petroleum Corporation and two other companies. The ventures
offshore oil and gas mining leases expire in 2008 and its onshore leases in
2019. At the end of 2002 production began from the EA field offshore Nigeria.

Shell Nigeria Exploration and Production Company (SNEPCO) (Group interest 100%)
operates production-sharing contracts with 30-year terms with a 55% equity for
two deepwater blocks (OML-118 and OPL-219). SNEPCO also has non-operator
interests in four other deepwater blocks (OPL-209, OPL-316, OPL-211 and
OPL-250).

OmanA Group company has a 34% interest in Petroleum Development Oman (PDO),
which is the operator of an oil concession expiring in 2012, or at such a later
date as the government and the 40% concession-owning company Private Oil
Holdings Oman Ltd. (in which a Group company has an 85% shareholding) may
agree.

Gas Investment and Services Company Ltd. (GISCO) (in which a Group company has
an 85% shareholding) holds a gas operating agreement which appoints PDO as the
operator for any gas discovered in central Oman until 2024, with provisions for
extension upon agreement with the government. The first major central Oman gas
project involves the supply of gas to customers in the Sur area of north-east
Oman, the largest of which is Oman LNG (Group interest 30%). (See page 22.) The
upstream investment required to develop and supply the gas is being provided to
the government by GISCO.

SyriaGroup companies have interests varying from 62.5% to 66.7% in five
production-sharing contracts with the government and with the state-owned
Syrian Petroleum Company (SPC). Under the contracts, they have certain rights
and obligations in respect of the production of petroleum. Three contracts (Ash
Sham, Deir Ez-Zor and Fourth Annex expiring between 2008 and 2014) concern
development activities. In addition, Group companies are parties to a gas
utilisation agreement with the government and SPC for the collection and
processing of natural gas from the contract areas for use in Syrian power
generation and other industrial plants.

USA

Shell Oil Company (SOC) (Group interest 100%) produces crude oil, natural gas
and natural gas liquids principally in the Gulf of Mexico, California, Texas,
Wyoming and Michigan. The majority of SOCs oil and gas production interests
are acquired under leases granted by the owner of the minerals underlying
relevant acreage (including many leases for federal onshore and offshore
tracts). Such leases are generally obtained for an initial fixed term that is
automatically extended by the establishment of production for so long as production continues, subject to
compliance with the terms of the lease (including, in the case of federal
leases, extensive regulations imposed by federal law).

As part of the Groups acquisition of Enterprise Oil, SOC acquired interests in
the Boomvang development, which started production in 2002, and in the Tahiti
discovery. SOC also acquired additional interests in the Pinedale field in the
Rocky Mountain region under two separate transactions.

16 Royal Dutch/Shell Group of Companies - Business and Property



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Shell Oil holds a 52% interest in a USA-based exploration and production joint
venture: Aera Energy LLC, holding exploration and production assets in
California. This venture is accounted for using the equity method of
accounting.

Other Western Hemisphere

BrazilShell Brasil Ltda. (Group interest 100%) has interests in fourteen
deepwater exploration blocks  five operated (BS-4, BC-10, BM-C-10, BM-ES-10
and BM-C-25) and nine non-operated (BC-2, BM-FZA-1, BM-S-8, BM-C-8, BM-C-14,
BM-S-17, BM-S-19, BM-SEAL-5 and BM-S-31). Group interest in these blocks ranges
from 15% to 100%.

During 2002, as a part of the Groups acquisition of Enterprise Oil, Shell
Brasil acquired and retained interests in six of these deepwater exploration
blocks  one operated (BM-ES-10) and five non-operated (BM-C-8, BM-C-14,
BM-S-17, BM-S-19, BM-SEAL-5). Interest in these blocks ranges from 15% to 100%.
Also acquired was an 80% interest in the Bijupirá and Salema oil fields,
currently under development.

The Group retains an interest through Pecten Victoria Inc. in the revenue
stream from the producing offshore Merluza gas field. The field is operated by
Petrobras.

CanadaShell Canada (Group interest 78%) is a major producer of natural gas,
natural gas liquids and sulphur. The majority of its gas production comes from
Alberta and the Sable gas field offshore Nova Scotia (where Shell Canada has
34% interest in the onshore assets and 31% interest in the offshore assets).
Exploration rights in Canada are generally granted for terms ranging from one
to nine years. Subject to certain conditions, exploration rights can be
converted to production leases, which may be extended as long as there is
commercial production pursuant to the lease.

Shell Canada produces heavy oil through thermal recovery in the Peace River
project and is nearing completion of its new heavy oil project in the Athabasca
oil sands area. Shell Canada holds 60% interest in the Athabasca Oil Sands
Project (AOSP) under a joint venture agreement to develop and produce syncrude
from oil sand leases in northern Alberta. The AOSP is comprised of the
following:



| |                                                                                                                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Muskeg River mine, is located 75 kilometers north of Fort McMurray,
Alberta. The mine uses trucks and shovels to excavate the oil sands, as well
as advanced extraction technologies to separate the bitumen from the sands.
AOSP is expected to produce 155,000 barrels of bitumen per day, approximately
10% of Canadas oil supply.
|
| | The Scotford upgraderis adjacent to Shell Canadas existing Scotford
refinery north of Fort Saskatchewan, Alberta. The Scotford upgrader will
process the bitumen from the Muskeg River mine into a range of premium,
synthetic crude oils and will be operated by Shell Canada.                                                          
|
| | Production of bitumen from the Muskeg River Mine commenced in October 2002,
with commissioning of the bitumen pipeline and upgrader also progressing on
schedule. First synthetic crude from the upgrader is scheduled for early
2003.                                                                                                    

VenezuelaShell Venezuela S.A. (Group interest 100%) holds an Operating Service
Agreement (expiring 2013) with a subsidiary of the state oil company, Petroleos
de Venezuela, to develop and produce the Urdaneta West Unit in Lake Maracaibo.

(c)  Other oil and gas interests
Other oil and gas interests as well as recent developments in countries where
Group or associated companies have exploration and production interests are
summarised, by country, in the following pages. Certain aspects of the
legislation, regulations or agreements affecting the activities of the
significant companies are also included.

AngolaShell Development Angola B.V. (SDAN) has interest of 50% in Block 18,
10% in Block 21 and 15% in Block 34.

ArgentinaShell Compania Argentina de Petroleo (CAPSA) (Group interest 100%)
holds an interest with rights to operatorship and 51.25% of production in the
Valle Morado Exploitation Lot and a 22.5% interest in the Acambuco concession.
During 2002 CNO-4 Exploration Permit Rio Colorado (CAPSA interest 51.25%) was
relinquished.

Royal Dutch/Shell Group of Companies - Business and Property 17



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AzerbaijanA Group company holds a 25% interest in the non-operated Inam
licence, offshore Azerbaijan.

BangladeshA Group company holds a 50% interest in and is operator of Blocks 15
and 16, a 37.5% interest in the producing Sangu gas field (located in Block 16)
and a 22% interest in Block 7. Another Group company holds 45% interest in and
is operator of a joint venture owning Block 5 and Block 10 (exploration only).

CameroonPecten Cameroon Company (PCC) (Group interest 80%) has 40% working
interest in a PCC operated property (Lokele), 24.5% interest in non-operated
property (Rio del Rey) and 25% interest in exploratory opportunities with the
state (SNH) and another partner.

ChinaGroup Companies (Shell China Exploration & Production Company (SCEP),
formerly Shell Exploration China Limited, and Pecten Orient China) hold a 47.5%
interest in the offshore South China Sea Block 15/22 (Xijiang 30-2 producing
field) and 24.5% in Block 15/11 (Xijiang 24-1 & 24-3 producing fields). In
addition, SCEP operates an exploration license to the north of the Xijiang
fields (Block 15/12). SCEP also holds 100% of the contractors interest in the
Changbei Petroleum Contract with China National Petroleum Corporation (CNPC),
to assess the development potential of the Changbei gas field in the Ordos
Basin of western onshore China.

SCEP, as part of a Consortium of International Companies (IOC), signed a Joint
Venture Framework Agreement with PetroChina for the potential participation
(IOC 45%, PetroChina 55%) in the China West to East project. This integrated
project includes the development of upstream natural gas resources in the Tarim
Basin, construction of a 40-inch diameter, 3,920km cross country gas pipeline
from Xinjang province in the West to Shanghai in the East and development and
supply of clean energy to the emerging gas markets in the Eastern Industrial
provinces.

Democratic Republic of CongoIn 2002 the Group sold its share in Shell Lirex
and Shell Kirex which held 45% non-operator interest in the East-Mibale,
Liawenda-Kinkasi and Maunda-Banana concessions.

IndiaA Group company divested its 50% interest in the production-sharing
contract for the Rajisthan Block RJ-ON-90/1.

IranAfter ownership dilutions in 2002, a Group company has a 70% interest in
an agreement with the National Iranian Oil Company (NIOC) to develop the
Soroosh and Nowrooz field in the northern Persian Gulf. This Group company will
establish operations with a view to handing over operatorship to NIOC once full
production has been reached.

KazakhstanAfter pre-emptive purchase in 2002 of an additional 2.38% interest,
a Group company holds a 16.67% interest in the North Caspian Production Sharing
Agreement in respect of some 6,000km2 offshore in the Kazakhstan sector of the
Caspian Sea. During 2002 the Kashagan field was declared commercial and an oil
& gas discovery was made in the Kalamkas structure, which is located 80km
southwest of the Kashagan field.

MoroccoA Group company owns an exploration license for 5 deepwater blocks
named Rimella. The exploration contract calls for 7% royalty on oil and 3.5%
royalty on gas. The exploration licence is for a period of two years with two
extensions of two years subject to a minimum work commitment.

In 2002, an interest in the adjacent Cap Draa concession was acquired as part
of the Enterprise Oil acquisition.

NamibiaShell Exploration and Production Namibia BV (SEPN) (Group interest
100%) withdrew as operator of the Kudu gas field offshore Namibia and no longer
holds interest in this field.

PakistanA Group company holds 28% interest in the Bhit Development and
Production Lease and 33.25% interest in the Kirthar Exploration license.

PhilippinesTwo Group companies hold interest in the deepwater block SC-38
which includes the Malampaya gas field. Shell Philippines Exploration B.V.
(SPEX) holds 20% and is operator and Shell Philippines LLC holds 25%.

18 Royal Dutch/Shell Group of Companies - Business and Property



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RussiaShell Sakhalin Holdings B.V. (Group interest 100%) holds 55% interest in
Sakhalin Energy Investment Company Ltd. (Sakhalin Energy). Seasonal oil
production continued from the Molikpaq facility on the Piltun field, offshore
Sakhalin island. The planned next steps will be the full development of the
Piltun oil field and Lunskoye gas field including an LNG plant in the south of
Sakhalin Island for export to the Asia Pacific LNG markets.

During 2002 a group company acquired 49% interest in KMOC (Khanty Mansiysk Oil
Corporation) as part of the Groups acquisition of Enterprise Oil.

Salym Petroleum Development (Group interest 50%) has the licence to develop the
Salym fields.

Saudi ArabiaThe Group holds an interest in two core venture agreements, Core
Venture 3 (projects in South Rub al Khali and Shaybah areas; Group interest 40%
and appointed project leadership) and Core Venture 1 (South Ghawar gas
development and related projects; Group interest 25%).

ThailandA Group company holds a 75% interest in and is operator of the
producing Sirikit concession and an interest in the non-producing offshore
Block B6/27.

TrinidadTrinidad Shell EP (TSEP) (Group interest 100%) holds 55% interest in
and is operator of deepwater Block 25a.

Royal Dutch/Shell Group of Companies - Business and Property 19



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2  Gas & Power

The Gas & Power business encompasses: processing, selling and delivering
natural gas by long-distance pipeline and  in liquefied form  by tanker;
selling and delivering liquid by-products of natural gas processing and Gas to
Liquids conversion; marketing and trading of natural gas and electricity to
industrial and commercial customers; and developing and operating independent
power plants.

|                              |  |  |  |  
|----------------------------- |  |  |  | -
|Utilisation of plant capacity |  |  |  | %

|                            |  |      |    |      |  |      |    |      |  |      |    |  |  |  |    |  |  |  |    | 
|--------------------------- |  | ---- | -- | ---- |  | ---- | -- | ---- |  | ---- | -- |  |  |  | -- |  |  |  | -- | 
|                            |  | 2002 |    | 2001 |  | 2000 |    | 1999 |  | 1998
|                            |  |      |    |      |  |      |    |      |  |     
|Liquefied natural gas (LNG) |  |      | 97 |      |  |      | 92 |      |  |      | 89 |  |  |  | 93 |  |  |  | 89 | 
|                            |  |      |    |      |  |      |    |      |  |      |    |  |  |  |    |  |  |  |    | 

|                                                                          |  |           |  |                |    |  |  |  |      |  |  | 
|------------------------------------------------------------------------- |  | --------- |  | -------------- | -- |  |  |  | ---- |  |  | 
|                                                                          |  | Group     |  | 100% capacity 
|Processing Liquefied natural gas (LNG) plants                             |  | interest  |  | million tonnes
|Location,
Group interest in plants(a) and capacity (at December 31, 2002) |  | %         |  | a year        
|                                                                          |  |           |  |               
|Malaysia                                                                  |  | Bintulu   |  |                | 15 |  |  |  | 15.9 | 
|Australia                                                                 |  | Karratha  |  |                | 22 |  |  |  | 7.5  | 
|Brunei                                                                    |  | Lumut     |  |                | 25 |  |  |  | 7.1  | 
|Oman                                                                      |  | Qalhat    |  |                | 30 |  |  |  | 6.6  | 
|Nigeria                                                                   |  | Bonny     |  |                | 26 |  |  |  | 8.8  | 
|                                                                          |  |           |  |                |    |  |  |  |      |  |  | 
|Regasification
terminal                                                   |  |           |  |                |    |  |  |  |      |  |  | 
|                                                                          |  |           |  |                |    |  |  |  |      |  |  | 
|Belgium                                                                   |  | Zeebrugge |  |                | 17 |  |  |  | 3.9  | 
|                                                                          |  |           |  |                |    |  |  |  |      |  |  | 

|                                    |  | 
|----------------------------------- |  | 
|Liquefied natural gas sales volumes |  | 

|          |  |      |     |      |  |      |     |      |  |                     |     |  |  |  |     |  |  |  |     | 
|--------- |  | ---- | --- | ---- |  | ---- | --- | ---- |  | ------------------- | --- |  |  |  | --- |  |  |  | --- | 
|          |  | 2002 |     | 2001 |  | 2000 |     | 1999 |  | million tonnes
1998
|          |  |      |     |      |  |      |     |      |  |                    
|Malaysia  |  |      | 2.3 |      |  |      | 2.3 |      |  |                     | 2.3 |  |  |  | 2.2 |  |  |  | 2.2 | 
|Australia |  |      | 1.7 |      |  |      | 1.7 |      |  |                     | 1.7 |  |  |  | 1.7 |  |  |  | 1.7 | 
|Brunei    |  |      | 1.7 |      |  |      | 1.7 |      |  |                     | 1.7 |  |  |  | 1.6 |  |  |  | 1.5 | 
|Oman      |  |      | 1.9 |      |  |      | 1.7 |      |  |                     | 0.7 |  |  |  |    |  |  |  |    | 
|Nigeria   |  |      | 1.5 |      |  |      | 1.5 |      |  |                     | 1.1 |  |  |  |    |  |  |  |    | 
|          |  |      |     |      |  |      |     |      |  |                     |     |  |  |  |     |  |  |  |     | 
|Total     |  |      | 9.1 |      |  |      | 8.9 |      |  |                     | 7.5 |  |  |  | 5.5 |  |  |  | 5.4 | 
|          |  |      |     |      |  |      |     |      |  |                     |     |  |  |  |     |  |  |  |     | 



|(a) |  | Percentage rounded to nearest whole percentage point where appropriate.
|--- |  | -----------------------------------------------------------------------

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Europe

BelgiumA 16.7% Group interest is held in both Distrigaz, now a Belgian gas
marketing and trading company, and Fluxys, into which Distrigazs pipeline and
transportation interests were transferred in 2001.

GermanyBrigitta & Elwerath Betriebsfuehrungsgesellschaft (BEB), a joint
venture with ExxonMobil in which a Group company holds a 50% interest, is the
major producer of oil and gas in Germany, and also one of the countrys major
gas transmission companies. Group companies have minority shareholdings in
major gas transmission and distribution companies, including Thyssengas (25%),
Avacon (1.2%, through BEB), Erdgas Munster (15% through BEB), Verbundnetz Gas
(5.3 % through BEB), and in pipeline companies METG, SETG and NETG (12.5 %
through Thyssengas). In 2002 the Group divested its indirect participation in
HEIN GAS Hamburger Gas Werke (5.1% through BEB) and its direct participations
of 16.7% in METG and 25% in SETG. In 2002, the sale of the indirect 14.75%
interest in Ruhrgas was agreed subject to final clearance. In March 2003 the
sale was closed.

GreeceThe Group holds a 24% interest in EPA Attikis, a local gas distribution
company currently with some 10,000 customers (mainly residential, but also
commercial and industrial). Other shareholders are Cinergy 25%, and DEPA (State
Gas Company) 51%. EPA Attikis holds a 30-year exclusive distribution licence to
market and distribute gas to industrial, commercial and residential customers.

NetherlandsContracts between Nederlandse Gasunie (Group interest 25%) and
customers in Europe will provide for long-term sales of Dutch gas for the
future. In 2002, Gasunie sold approximately 79 billion cubic metres of gas for
both export and domestic consumption.

SpainShell Espana a wholly-owned Group subsidiary launched a natural gas
marketing business in 1999.

United KingdomA wholly Group-owned gas marketing company, Shell Gas Direct,
maintained its market position during 2002 selling in the industrial and
commercial market. The wholly owned Shell Energy, established in 1999,
continues to develop sales of gas and power in a number of European markets.

Other European CountriesWholly owned Shell Group companies in other European
countries continue to seek opportunities to develop the gas and power business.
For this purpose they receive advice and assistance from Shell Energy Limited,
a wholly owned Group company.

Other Eastern Hemisphere

AustraliaA Group company directly and indirectly has a 22.3% interest in the
liquefied natural gas (LNG) export phase and a 25.5% interest in the domestic
gas phase of a joint venture formed to develop the gas fields of the North-West
Shelf (NWS) (see page 15). Sale and purchase agreements with eight Japanese
utilities call for the supply of LNG at a rate of some 7.3 million tonnes a
year, equivalent to some 27 million cubic metres of gas a day. Currently, the
joint venture is constructing a fourth LNG train with a 4.2 million tonnes
capacity a year. This new LNG train is planned to start up in 2004 and will
supply both existing and new customers. In 2002, the NWS joint venture was
awarded the supply contract for the first LNG terminal in China, to be located
in the Guangdong province in south-east China. The contract volume is 3.3
million tonnes per annum and first deliveries are planned in 2006.

The Group has a 28.6% interest in the Gorgon area joint venture that is
considering various LNG and domestic gas project options.

A wholly owned Group company is also involved in a number of licences in the
Timor Sea between the Northern Territory and Timor Leste with opportunities for
both domestic gas and LNG export. The Sunrise gas fields are the most mature of
these licences where a proposal to develop these fields using Shells floating
LNG technology has been made.

BruneiGas is liquefied and sold to customers in Japan and Korea by Brunei LNG
Sendirian Berhad (Group interest 25%). In March 1993 the companys main
contract, to supply LNG to three power and gas utilities in Tokyo and Osaka,
was extended for a further 20 years at an increased sales quantity of some 5.5
million tonnes a year. In 2002, the total sales quantity was some 6.8 million
tonnes , mainly to Japan and Korea, but supplemented by small sales to the US
and Europe. The LNG continues to be delivered in a fleet of 7 LNG vessels owned
by Brunei Shell Tankers Sendirian Berhad (Group interest now 25%, following
sale of 25% to a partner in BLNG during 2002), as well as a larger vessel,
brought into service in June 2002, owned by Brunei Gas Carriers Sendirian
Berhad (Group interest 10%).

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IndiaThe Group holds 100% interest in three companies  Shell Hazira Gas
Private Ltd., Hazira Port Private Ltd. and Hazira LNG Private Ltd., all of
which are located in the State of Gujarat. Under a Build-Own-Operate-Transfer
(BOOT) Concession Agreement with the Gujarat Maritime Board (with an initial
term of 30 years) Hazira Port Private Ltd., together with Hazira LNG Private
Ltd., is constructing a port and LNG terminal at Hazira in Gujarat. The initial
capacity of this terminal is 2.5 mtpa, expandable to 5 mtpa and then 10 mtpa.
Currently under construction the terminal is intended to be commissioned at the
end of 2004. Shell Hazira Gas Private Ltd., will use these facilities to import
LNG and to market and supply regasified LNG to customers in Gujarat and North
West India.

MalaysiaExports of LNG from Sarawak by Malaysia LNG Sendirian Berhad (MLNG 
Group interest 15%) began in January 1983 to two Japanese customers. The
contract delivery rate was increased to 7.6 million tonnes of LNG a year in
1993. Three additional liquefaction trains (Group interest 15%) came on stream
at the end of 1995 (MLNG Dua), doubling capacity to some 15.9 million tonnes a
year, with customers in Japan, South Korea and Taiwan. For the export volume,
gas is supplied from fields operated by Group companies (see page 15).
Construction of a third expansion to the Bintulu facilities, MLNG Tiga (Group
interest 15%), is ongoing and scheduled for completion in the first half of
2003.

The Group shareholding in the first venture, MLNG, reverts to Petronas in 2003
under a transfer agreement contained in the original joint venture agreement. A
continuing role in the gas supply to MLNG has already been extended to 2020,
and work is ongoing with Petronas to assess the feasibility of a continuing
role in MLNG itself.

Adjacent to the LNG facilities is a Gas to Liquids plant, operated by Shell MDS
(Malaysia) Sendirian Berhad (Group interest 71.8%). This plant converts
approximately three million cubic meters a day of natural gas into some 12,500
barrels a day high-quality middle distillates and other products using
Shell-developed technology. First commercial production of middle distillates
and solvents from the plant occurred during 1993 using feedstock from offshore
gas fields. Following an incident in late 1997, the plant re-started
successfully in mid 2000. A full range of liquid and wax products is being sold
into specialty markets in Asia Pacific, the USA and Europe.

NigeriaA LNG plant owned by Nigeria LNG Limited (NLNG) (Group interest 25.6%)
started up in October 1999. The plant produces some 5.9 million tonnes of LNG a
year from two LNG trains (Trains 1&2) for export under long-term contracts to
customers in Europe. A final investment decision was taken in February 1999 by
the shareholders of NLNG to expand the existing venture, through the
construction of an additional 2.9 million tonnes per annum LNG train and
associated LPG facilities. The third train commenced production in quarter 4
2002, three months ahead of schedule. LNG volumes from this expansion have been
sold under long-term contracts to existing customers. In the first quarter of
2002, the shareholders of NLNG committed to the NLNG Plus project, a further
two-train expansion (Trains 4&5), to supply US and European markets. NLNG Plus
will increase NLNGs production capacity to approximately 16.7 million tonnes a
year of LNG and 2.5 million tonnes a year of LPG in 2006.

OmanThe LNG plant owned by Oman LNG (Group interest 30%) commenced operations
in April 2000. The annual capacity of the plant is some 6.6 million tonnes per
annum. The majority of the LNG is sold to Korea and Japan on long term
contracts with remaining volumes sold to customers on short term sales
agreements.

RussiaA Group Company holds a 55% interest in Sakhalin Energy Investment
Company Ltd. (Sakhalin Energy). Following the successful first phase oil
development in July 1999, the potential second phase includes construction, in
the south of Sakhalin Island, of a two-train LNG plant with 9.6 million tonnes
a year capacity for export to the Asia Pacific LNG markets.

USA

During 2002, Gas & Power in the USA conducted business in the following areas:
transportation of natural gas through offshore pipelines in the Gulf of Mexico,
power equity investments, holding of LNG capacity rights in US import
terminals, gas storage and arbitrage activities in Texas, natural gas marketing
and trading in the USA and Canada, power marketing and trading in the USA, and
energy management services.

Shell US Gas & Power (Group interest 100%) manages LNG import capacity rights
at the Cove Point and Elba Island terminals, the offshore pipelines in the Gulf
of Mexico, an equity position in Enterprise Product Partners L.P., an equity
position in Tenaska Gateway power plant in Texas, and long-term gas
transportation contracts in Canada. Additionally, during 2002 Shell US Gas &
Power evaluated various options to expand its LNG import capabilities.

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Following the 2001 acquisition by InterGen of 30% interest in Coral Energy
Holdings, Shell Trading continues to operate and manage all of Corals gas and
power activities in the USA and Canada. In 2002, Kinder Morgan purchased
InterGens Tejas gas pipeline and storage system.

Other Western Hemisphere

BoliviaIn 1997, a Group company acquired a 25% interest in Transredes, an oil
and gas pipeline company in Bolivia. In 1999, gas exports to Brazil commenced
through a pipeline owned by GTB, a Transredes subsidiary in which the Group has
both direct and indirect interests totalling 29.75%.

BrazilIn 1997, Group companies acquired a minority interest in Comgas, a
Brazilian natural gas distribution company in the state of São Paulo. In 1999,
a joint venture was formed with BG International that successfully bid for the
final and controlling block of Comgas (total Group interest now 18.2%). In
1998, an interest (25-30%) was acquired in a power station and associated gas
supply pipeline at Cuiaba in western Brazil; the pipeline also crosses
through eastern Bolivia. In 2000, Group companies, jointly with Enron, acquired
the Transredes interests in the Cuiaba pipeline and power plant (Group interest
in the various project entities now average 37%). The Cuiaba gas-fired power
plant (480MW) became commercially operational in 2002. In 1998, an agreement
was signed with Petrobras to develop an LNG import terminal in north eastern
Brazil.

VenezuelaIn 2002, a Group company signed a Framing Agreement (June) and a
Preliminary Development Agreement (November) covering a 30% interest in the
Mariscal Sucre LNG scheme.

LNG Supply and Shipping

Two operations, Shell Western LNG (SWLNG) and Shell Eastern LNG (SELNG) have
been established to secure supplies and terminal capacity for downstream
markets that Shell is developing. SWLNG sources LNG in the West and supplies
Shells outlets in the Atlantic Basin (currently Spain and the USA), while
SELNG sources supplies in the East, and may eventually supply Shells terminal
in India, and other potential outlets in the region including Taiwan and China.
These operations will primarily use ships which have been acquired by Shell
Tankers Singapore Limited (currently a fleet of 3, but with 2 more to be
delivered by early 2004), and also transact short-term supplies and charters.

InterGen

InterGen is a major international developer of private power projects in which
the Group has a 68% non-controlling equity interest. InterGen brought five new
facilities in Egypt, Mexico, Turkey and Australia into operation in 2002,
bringing the total generating capacity to 5.2 Gigawatt (GW) (InterGen net
equity interest) at year-end. At the end of December 2002, the company had
interests in seven other power stations under construction, with 6.9GW
(InterGen net equity interest) capacity, in the UK, Turkey, Mexico, the
Netherlands and the USA. Three projects in the UK, Mexico and the Netherlands
secured financing in 2002.

Royal Dutch/Shell Group of Companies - Business and Property 23



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##### Table of Contents






3   Oil Products

(a)Overview
Oil Products encompasses all the activities which transform crude oil from the
wellhead into Shell products for customers.

The Group has an interest in 55 refineries worldwide and markets fuels for the
automotive, aviation and marine sectors, along with heating oils, industrial
and consumer lubricants, speciality products such as bitumen and liquefied
petroleum gas (LPG) and technical services.

The Oil Products business operates the worlds largest single branded retail
network, serving some 25 million retail customers a day through 55,000 service
stations. Convenience retailing, offering a wide range of products, continues
to show steady growth in revenues, gross margin and income. In addition, the
Oil Products business serves around one million industrial and commercial
customers; from small family-run businesses through to multinational companies.
Lubricants, fuels and other speciality products are supplied to industrial
sectors as diverse as mining, automotive manufacturing, food processing and
steel-making. Underpinning Shells marketing strength is the Shell brand. The
Shell brand is one of the most trusted and reputable in the world. The Shell
Global Brand Tracker is run annually, measuring in a structured and objective
way the health of the Shell brand across the world, and enables Shell companies
to assess their competitive strength and brand appeal. The latest study
confirmed Shells global lead in terms of Brand Preference  it was the most
preferred brand in 30 of the 50 markets covered. The reach of the brand  with
a Shell presence in over 145 countries and territories  provides the
opportunity to combine the operational and cost benefits of global operations
with a strong brand affiliation.

Group companies continue to be leaders in automotive fuel performance and
quality. The range of innovative products and services offered to customers has
been further expanded, drawing upon extensive research and development. The
differentiated fuels programme has now been launched in 46 countries with 9
product launches in 2002. Environmentally friendlier products continued to be
introduced more widely, such as low-sulphur diesel, lead replacement fuel and
LPG.

Oil Products actively manages the health and safety risk of its operations and
products for staff, contractors, customers and neighbours. All Oil Products
business activities are covered by structured HSE management systems.

USA

Oil Product activities in the USA are carried out through various Shell Oil
Company subsidiaries.

In early 2002, Shell Oil Company acquired the 44% Texaco Inc. interest in
Equilon Enterprises LLC, which is now doing business as Shell Oil Products US.
At the same time Shell Oil Company and Saudi Refining, Inc. acquired Texacos
interest in Motiva Enterprises LLC, making each company a 50% owner of that
business. Shell Oil Company also holds a 50% interest in the Deer Park Refining
Limited Partnership, which is a joint venture between Shell Oil Company and a
subsidiary of Mexicos national oil company Petroleos Mexicanos (Pemex).

Together, Shell Oil Products US and Motiva hold a significant position in the
US refined products industry, having an approximate 15% share of the US
gasoline market. At the end of 2002 the two companies together with Deer Park
Refining Limited Partnership had 9 refineries with a combined capacity of
approximately 1.7 million barrels per day, interests in approximately 25,000
miles of pipelines and some 21,000 retail outlets.

Shell Oil Products US and Motiva both market petroleum and other products
directly and through independent wholesalers and retailers and have the
exclusive rights to use the Shell brand on refined oil product sales in those
areas of the USA where each company is authorised to conduct its respective
business. In addition, Shell Oil Products US and Motiva have the exclusive
rights to use the Texaco brand on refined oil product sales in their
respective areas through June 2004, and non-exclusive rights until June 2006.
Shell Oil Products US also has the non-exclusive right to use the Texaco
lubricant brands through August 2003. Shell Oil Products US and Motiva plan to
reduce the number of service stations in the overall network by around 30%. Furthermore a
re-branding programme is underway to re-brand Texaco branded sites to the Shell
brand, which will be largely completed by mid-2004.

24 Royal Dutch/Shell Group of Companies - Business and Property



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The purchase of Pennzoil-Quaker State Company was completed in October 2002
after regulatory clearance. The transaction has a total equity value of $1.8
billion and debt of $1.1 billion. This acquisition will make the Group a leader
in both passenger car motor oil and diesel engine oil in the USA. This
acquisition (with pre tax benefits expected to be $140 million by 2004) aligns
with the Groups strategy to become a leader in the Global lubricants market.

In 2002 Shell Oil Company sold its pipeline assets in West Texas including the
Permian Basin gathering system and the Basin and Rancho pipelines to Plains All
American Pipeline, L.P.

In February 2003 Shell Oil Company announced the proposed sale of the majority
of the companys onshore crude pipeline systems. The assets to be sold are the
Ozark pipeline, the W. Tulsa 10-inch pipeline, the Cushing Tank Farms, Poplar
pipeline and the Powder River and Baker gathering systems. In addition, Shell
Pipelines ownership interest in the Capline, Capwood, Woodpat, Osage and
Little Missouri pipeline systems will be sold.

CanadaShell Canada (Group interest 78%) owns 3 refineries in Alberta, Ontario
and Quebec, with a total refinery capacity of 0.3 million barrels per day and a
network of some 1,800 service stations. Under a joint agreement Shell Canada
holds 60 per cent interest in the Athabasca Oil Sands Project in Northern
Alberta. This includes the Muskeg River mine and the Scotford upgrader. Bitumen
production started late in 2002, with synthetic crude oil production coming
soon after.

The synthetic crude feedstock from the upgrader will be processed at the
Scotford refinery, which was ranked as Best-in-Class (first out of 132
refineries in North America) in the 2000 Solomon benchmarking study.

Shell Europe Oil Products (SEOP)

SEOP has a presence in 37 countries. Group companies have 11 refineries with a
total capacity of 1.6 million barrels per day. In addition, associated
companies have 8 refineries with a capacity of 1.1 million barrels per day
(Group interest 0.3 million barrels per day). There are a total of some 13,000
service stations, in particular growth has been realised in recent years in
Central and Eastern Europe.

Differentiated fuels have now been launched in 20 countries.

A Group company entered into a refining and marketing joint venture (50:50)
with RWE-DEA in Germany, the largest oil products market in Europe, in January
2002 and took ownership of 100% of the venture in July; the cash consideration
of $1.3 billion will be paid in July 2003. The acquisition will lead to
expected benefits of $150 million by 2003 and the Group will be looking to
increase this benefits delivery in 2004.

The acquisition of 86 service stations from Agip in Italy was announced in 2002
strengthening Shells network in the north of the country. In two linked
transactions 56 sites in Germany and 35 sites in France were sold to AGIP in
order to comply with regulatory requirements relating to the purchase of
RWE-DEA. In the first quarter of 2003, the Group announced its intention to
seek buyers for the shares in AB Svenska Shell, a 100% owned subsidiary. It is
expected that the sale will be completed during 2003. It is the intention to
retain the lubricants, LPG and Marine Products businesses in Sweden.

Shell Oil Products East (SOPE)

SOPE, encompassing the Middle East and Asia Pacific, operates in 36 countries.
At the end of 2002 Group companies have 6 refineries with a refinery capacity
of some 1.0 million barrels per day. Furthermore, associated companies have 8
refineries with total capacity at the end of 2002 of 1.0 million barrels per
day (Group interest 0.3 million barrels per day).

There are a total of some 10,000 service stations in retail markets.
Differentiated fuels are now available in 7 countries.

In quarter 3, the Group initialled a draft Joint Venture Contract with China
Petroleum and Chemicals Corporation (Sinopec Corp.) for the establishment of an
oil products marketing joint venture in Jiangsu
Province. The joint venture is for the development of a network of 500 service
stations in that province. Discussions towards full agreement are progressing.

Royal Dutch/Shell Group of Companies - Business and Property 25



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##### Table of Contents



Africa, South and Central America

The Group has a presence in 71 countries. As at the end of 2002 Group companies
have 2 refineries with a combined refinery capacity of some 0.3 million barrels
per day. Associated companies have 8 refineries with a total capacity at the

end of 2002 of 0.3 million barrels per day (Group interest 0.1 million barrels
per day).

There are a total of some 9,000 service stations in retail markets.
Differentiated fuels are now available in 18 countries.

The sale of a 25% interest in Shells marketing businesses in South Africa to
the Thebe Investment Corporation was completed in the first quarter 2002. This
sale is a positive response to the South African Governments Black Economic
Empowerment initiative.

Global BusinessesThe Group manages its Aviation, Marine Products, LPG and
Global Solutions businesses on a global basis. This global approach has allowed
the Group to better meet the needs of its global customers, share best practice
and common processes and drive for lower cost structures and supply chain
optimisation. The simplification of structures in the USA will allow the Group
to further extend these benefits, which will yield additional business and
growth opportunities. The acquisition of Pennzoil-Quaker State Company will
allow the Group to build a further global platform in lubricants. This will be
in transition in 2003 and will be completed in 2004.

Shell Aviationis a world leader in the marketing of aviation fuel and in the
operation of airport fuelling. Every day at over 800 airports in 90 countries,
Shell Aviation fuel some 20,000 aircraft and supplies over 23 million gallons
(87 million litres) of fuel. In 2002 Shell Aviation was recognised by global
airlines as the Worlds best Jet Fuel Marketer, winning the coveted Armbrust
Aviation award for the third time in five years.

Shell Marine Productsis one of the worlds leading suppliers of premium
quality marine fuels, lubricants and services, working with international and
local marine customers worldwide. The business supplies 20 different types of
marine fuel oil to power diesel engine, steam and gas turbine vessels, together
with around 100 different types of marine lubricants blended to provide optimum
protection in the toughest environments. The business serves more than 15,000
customer vessels ranging from large ocean-going tankers to small fishing boats.

Shell Gas LPGmarkets LPG to around 40 million customers in over 55 countries
and territories, supplying LPG for domestic purposes (heating, cooking etc),
commercial (restaurants), agriculture and industry; in developed countries LPG
is becoming increasingly popular as an automotive fuel. Typically LPG is
distributed by cylinders, small tanks and large bulk tanks. During 2002 Shell
Gas LPG completed the acquisition of Sihirgaz in Turkey, acquired the LPG
business and assets of the Bharat Shell joint venture, as well as finalising
the acquisition of Unipetrols 55% share in Kralupol in the Czech Republic,
giving the Group 100% ownership of the company.

Shell Global Solutionsbrings the Groups technology and technical experience
to market by providing industry and other Group companies with innovative
solutions to improve their performance. Shell Global Solutions has an extensive
network of offices around the world, with primary commercial centres now
operating in the USA, Europe and Asia Pacific. The business has shown a steady
growth in revenues over the last 34 years.

A Memorandum of Understanding was signed in November 2002 between Shell Global
Solutions International and China Petroleum and Chemical Corporation (Sinopec).
It provides for Shell Global Solutions to provide a programme to improve the
profitability of the Jinling refinery in Nanjing based on transferring industry
best practices to the refinery.

Shell Servicesoffers industrial customers a range of services, including fluid
management, asset management and maintenance, logistical support and power
optimisation.

26 Royal Dutch/Shell Group of Companies - Business and Property



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REFININGa

|                                                                                                           |  |             
|---------------------------------------------------------------------------------------------------------- |  | ------------
|Cost of crude oil processed or consumed                                                                    |  | $ per barrel
|(including upstream margin on crude supplied by Group and associated exploration
and production companies)



| |  |      |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
| |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- |  |  |  | ----- |  |  |  | ----- | 
| |  | 2002 |       | 2001 |  | 2000 |       | 1999 |  | 1998
| |  |      |       |      |  |      |       |      |  |     
| |  |      | 24.35 |      |  |      | 23.56 |      |  |      | 27.50 |  |  |  | 17.58 |  |  |  | 12.58 | 

|                                          |  |                         |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|----------------------------------------- |  | ----------------------- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- |  |  |  | ----- |  |  |  | ----- | 
|Operable crude oil distillation capacityb |  | thousand barrels dailyc
|                                          |  | 2002                    |       | 2001 |  | 2000 |       | 1999 |  | 1998
|                                          |  |                         |       |      |  |      |       |      |  |     
|Europe                                    |  |                         | 1,809 |      |  |      | 1,400 |      |  |      | 1,395 |  |  |  | 1,546 |  |  |  | 1,591 | 
|Other Eastern Hemisphere                  |  |                         | 1,108 |      |  |      | 1,155 |      |  |      | 1,099 |  |  |  | 1,073 |  |  |  | 1,072 | 
|USA                                       |  |                         | 1,075 |      |  |      | 689   |      |  |      | 222   |  |  |  | 222   |  |  |  | 324   | 
|Other Western Hemisphere                  |  |                         | 395   |      |  |      | 398   |      |  |      | 372   |  |  |  | 371   |  |  |  | 364   | 
|                                          |  |                         |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                                          |  |                         | 4,387 |      |  |      | 3,642 |      |  |      | 3,088 |  |  |  | 3,212 |  |  |  | 3,351 | 
|                                          |  |                         |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 

|                                    |  |                         |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|----------------------------------- |  | ----------------------- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- |  |  |  | ----- |  |  |  | ----- | 
|Crude oil processedd                |  | thousand barrels dailyc
|                                    |  | 2002                    |       | 2001 |  | 2000 |       | 1999 |  | 1998
|                                    |  |                         |       |      |  |      |       |      |  |     
|Europe                              |  |                         | 1,701 |      |  |      | 1,309 |      |  |      | 1,337 |  |  |  | 1,531 |  |  |  | 1,602 | 
|Other Eastern Hemisphere            |  |                         | 870   |      |  |      | 933   |      |  |      | 899   |  |  |  | 918   |  |  |  | 968   | 
|USA                                 |  |                         | 996   |      |  |      | 624   |      |  |      | 196   |  |  |  | 188   |  |  |  | 282   | 
|Other Western Hemisphere            |  |                         | 314   |      |  |      | 361   |      |  |      | 355   |  |  |  | 352   |  |  |  | 355   | 
|                                    |  |                         |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                                    |  |                         | 3,881 |      |  |      | 3,227 |      |  |      | 2,787 |  |  |  | 2,989 |  |  |  | 3,207 | 
|                                    |  |                         |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Group share of
associated companies |  |                         | 473   |      |  |      | 480   |      |  |      | 1,117 |  |  |  | 1,139 |  |  |  | 1,072 | 
|                                    |  |                         |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 

|                                                                       |  |      |    |      |  |      |    |      |  |      |    |  |  |  |    |  |  |  |     | 
|---------------------------------------------------------------------- |  | ---- | -- | ---- |  | ---- | -- | ---- |  | ---- | -- |  |  |  | -- |  |  |  | --- | 
|Crude oil distillation unit intake as percentage of operable capacitye |  | %   
|                                                                       |  | 2002 |    | 2001 |  | 2000 |    | 1999 |  | 1998
|                                                                       |  |      |    |      |  |      |    |      |  |     
|Europe                                                                 |  |      | 94 |      |  |      | 95 |      |  |      | 97 |  |  |  | 99 |  |  |  | 101 | 
|Other Eastern Hemisphere                                               |  |      | 84 |      |  |      | 90 |      |  |      | 85 |  |  |  | 90 |  |  |  | 93  | 
|USA                                                                    |  |      | 91 |      |  |      | 91 |      |  |      | 88 |  |  |  | 86 |  |  |  | 87  | 
|Other Western Hemisphere                                               |  |      | 86 |      |  |      | 91 |      |  |      | 98 |  |  |  | 97 |  |  |  | 97  | 
|                                                                       |  |      |    |      |  |      |    |      |  |      |    |  |  |  |    |  |  |  |     | 
|Worldwide                                                              |  |      | 90 |      |  |      | 92 |      |  |      | 92 |  |  |  | 95 |  |  |  | 97  | 
|                                                                       |  |      |    |      |  |      |    |      |  |      |    |  |  |  |    |  |  |  |     | 

|                            |  |                         |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|--------------------------- |  | ----------------------- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- |  |  |  | ----- |  |  |  | ----- | 
|Refinery processing intakef |  | thousand barrels dailyc
|                            |  | 2002                    |       | 2001 |  | 2000 |       | 1999 |  | 1998
|                            |  |                         |       |      |  |      |       |      |  |     
|Crude oil                   |  |                         | 3,881 |      |  |      | 3,227 |      |  |      | 2,787 |  |  |  | 2,989 |  |  |  | 3,207 | 
|Feedstocks                  |  |                         | 203   |      |  |      | 173   |      |  |      | 136   |  |  |  | 148   |  |  |  | 164   | 
|                            |  |                         |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                            |  |                         | 4,084 |      |  |      | 3,400 |      |  |      | 2,923 |  |  |  | 3,137 |  |  |  | 3,371 | 
|                            |  |                         |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Europe                      |  |                         | 1,761 |      |  |      | 1,358 |      |  |      | 1,394 |  |  |  | 1,602 |  |  |  | 1,670 | 
|Other Eastern Hemisphere    |  |                         | 941   |      |  |      | 1,018 |      |  |      | 971   |  |  |  | 983   |  |  |  | 1,034 | 
|USA                         |  |                         | 1,064 |      |  |      | 663   |      |  |      | 198   |  |  |  | 192   |  |  |  | 308   | 
|Other Western Hemisphere    |  |                         | 318   |      |  |      | 361   |      |  |      | 360   |  |  |  | 360   |  |  |  | 359   | 
|                            |  |                         |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                            |  |                         | 4,084 |      |  |      | 3,400 |      |  |      | 2,923 |  |  |  | 3,137 |  |  |  | 3,371 | 
|                            |  |                         |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 

|                  |                       |  |     |  |  |  |     |  |  |  |     |  |  |  |     |  |  |  |     | 
|----------------- | --------------------- |  | --- |  |  |  | --- |  |  |  | --- |  |  |  | --- |  |  |  | --- | 
|                  | million tonnes a year
|Metric equivalent |                       |  | 201 |  |  |  | 166 |  |  |  | 147 |  |  |  | 157 |  |  |  | 169 | 

|                             |  |                         |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|---------------------------- |  | ----------------------- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- |  |  |  | ----- |  |  |  | ----- | 
|Refinery processing outturng |  | thousand barrels dailyc
|                             |  | 2002                    |       | 2001 |  | 2000 |       | 1999 |  | 1998
|                             |  |                         |       |      |  |      |       |      |  |     
|Gasolines                    |  |                         | 1,537 |      |  |      | 1,242 |      |  |      | 957   |  |  |  | 1,021 |  |  |  | 1,088 | 
|Kerosines                    |  |                         | 400   |      |  |      | 369   |      |  |      | 320   |  |  |  | 368   |  |  |  | 387   | 
|Gas/Diesel oils              |  |                         | 1,287 |      |  |      | 1,068 |      |  |      | 974   |  |  |  | 1,035 |  |  |  | 1,079 | 
|Fuel oil                     |  |                         | 355   |      |  |      | 339   |      |  |      | 316   |  |  |  | 361   |  |  |  | 434   | 
|Other products               |  |                         | 546   |      |  |      | 417   |      |  |      | 350   |  |  |  | 283   |  |  |  | 324   | 
|                             |  |                         |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                             |  |                         | 4,125 |      |  |      | 3,435 |      |  |      | 2,917 |  |  |  | 3,068 |  |  |  | 3,312 | 
|                             |  |                         |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 

|                                          |  |                         |     |      |  |      |     |  |  |  |     | 
|----------------------------------------- |  | ----------------------- | --- | ---- |  | ---- | --- |  |  |  | --- | 
|Group share of Equilon and Motiva volumes
|(not included above)                      |  | thousand barrels dailyb
|                                          |  | 2000                    |     | 1999 |  | 1998
|                                          |  |                         |     |      |  |     
|Refinery processing intake                |  |                         | 656 |      |  |      | 797 |  |  |  | 656 | 



---

|a |  | For the period 19982000 Equilon and Motiva were reported as associated companies. The Group share of refinery processing intake of Equilon and Motiva
was reported separately. The basis of reporting in 2002 has been changed to reflect only those activities relating the Oil Products business; previously the
volumes of the Mobile refinery in Alabama, a refinery owned by Chemicals, was included within the USA volumes. The 2001 figures have been restated on a
similar basis. Furthermore, the 2002 USA reported volumes include 100% of Equilon (now Shell Oil Products US) and 50% of Motiva; the 2001 figures have
been restated in accordance with the ownership interests prevailing at the time.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|b |  | Group average operating capacity for the year and excluding mothballed capacity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| 
|c |  | One barrel daily is equivalent to approximately 50 tonnes a year, depending on the specific gravity of the crude oil. Daily signifies per calendar day.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| 
|d |  | Including natural gas liquids; includes processing for others and excludes processing by others.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| 
|e |  | Including crude oil and feedstocks processed in crude oil distillation units, and based on calendar-day capacities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| 
|f |  | Including crude oil and natural gas liquids plus feedstocks processed in crude oil distillation units and in secondary conversion units.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| 
|g |  | Excluding own use and products acquired for blending purposes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

Royal Dutch/Shell Group of Companies  Business and Property     27



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##### Table of Contents



OIL SALESa, b, c

|                         |  |                        |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|------------------------ |  | ---------------------- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- |  |  |  | ----- |  |  |  | ----- | 
|Product volumesd         |  | thousand barrels daily
|                         |  | 2002                   |       | 2001 |  | 2000 |       | 1999 |  | 1998
|                         |  |                        |       |      |  |      |       |      |  |     
|Europe                   |  |                        |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Gasolines                |  |                        | 647   |      |  |      | 531   |      |  |      | 510   |  |  |  | 506   |  |  |  | 490   | 
|Kerosines                |  |                        | 190   |      |  |      | 164   |      |  |      | 178   |  |  |  | 192   |  |  |  | 187   | 
|Gas/Diesel oils          |  |                        | 950   |      |  |      | 776   |      |  |      | 718   |  |  |  | 747   |  |  |  | 764   | 
|Fuel oil                 |  |                        | 177   |      |  |      | 174   |      |  |      | 192   |  |  |  | 186   |  |  |  | 208   | 
|Other products           |  |                        | 209   |      |  |      | 207   |      |  |      | 212   |  |  |  | 199   |  |  |  | 193   | 
|                         |  |                        |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                         |  |                        | 2,173 |      |  |      | 1,852 |      |  |      | 1,810 |  |  |  | 1,830 |  |  |  | 1,842 | 
|                         |  |                        |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Other Eastern Hemisphere |  |                        |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Gasolines                |  |                        | 332   |      |  |      | 328   |      |  |      | 334   |  |  |  | 344   |  |  |  | 347   | 
|Kerosines                |  |                        | 142   |      |  |      | 132   |      |  |      | 124   |  |  |  | 131   |  |  |  | 147   | 
|Gas/Diesel oils          |  |                        | 476   |      |  |      | 460   |      |  |      | 452   |  |  |  | 437   |  |  |  | 432   | 
|Fuel oil                 |  |                        | 188   |      |  |      | 200   |      |  |      | 203   |  |  |  | 220   |  |  |  | 221   | 
|Other products           |  |                        | 149   |      |  |      | 138   |      |  |      | 138   |  |  |  | 130   |  |  |  | 124   | 
|                         |  |                        |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                         |  |                        | 1,287 |      |  |      | 1,258 |      |  |      | 1,251 |  |  |  | 1,262 |  |  |  | 1,271 | 
|                         |  |                        |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|USA                      |  |                        |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Gasolines                |  |                        | 1,239 |      |  |      | 737   |      |  |      | 189   |  |  |  | 185   |  |  |  | 283   | 
|Kerosines                |  |                        | 221   |      |  |      | 138   |      |  |      | 31    |  |  |  | 31    |  |  |  | 54    | 
|Gas/Diesel oils          |  |                        | 401   |      |  |      | 266   |      |  |      | 82    |  |  |  | 74    |  |  |  | 59    | 
|Fuel oil                 |  |                        | 105   |      |  |      | 65    |      |  |      | 17    |  |  |  | 25    |  |  |  | 38    | 
|Other products           |  |                        | 173   |      |  |      | 111   |      |  |      | 114   |  |  |  | 71    |  |  |  | 269   | 
|                         |  |                        |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                         |  |                        | 2,139 |      |  |      | 1,317 |      |  |      | 433   |  |  |  | 386   |  |  |  | 703   | 
|                         |  |                        |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Other Western Hemisphere |  |                        |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Gasolines                |  |                        | 317   |      |  |      | 315   |      |  |      | 306   |  |  |  | 321   |  |  |  | 310   | 
|Kerosines                |  |                        | 74    |      |  |      | 80    |      |  |      | 81    |  |  |  | 85    |  |  |  | 93    | 
|Gas/Diesel oils          |  |                        | 246   |      |  |      | 252   |      |  |      | 275   |  |  |  | 277   |  |  |  | 279   | 
|Fuel oil                 |  |                        | 92    |      |  |      | 100   |      |  |      | 107   |  |  |  | 104   |  |  |  | 118   | 
|Other products           |  |                        | 49    |      |  |      | 54    |      |  |      | 128   |  |  |  | 123   |  |  |  | 148   | 
|                         |  |                        |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                         |  |                        | 778   |      |  |      | 801   |      |  |      | 897   |  |  |  | 910   |  |  |  | 948   | 
|                         |  |                        |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Export sales             |  |                        |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Gasolines                |  |                        | 251   |      |  |      | 202   |      |  |      | 455   |  |  |  | 279   |  |  |  | 257   | 
|Kerosines                |  |                        | 155   |      |  |      | 154   |      |  |      | 128   |  |  |  | 128   |  |  |  | 113   | 
|Gas/Diesel oils          |  |                        | 222   |      |  |      | 194   |      |  |      | 204   |  |  |  | 222   |  |  |  | 253   | 
|Fuel oil                 |  |                        | 196   |      |  |      | 168   |      |  |      | 204   |  |  |  | 175   |  |  |  | 163   | 
|Other products           |  |                        | 198   |      |  |      | 197   |      |  |      | 192   |  |  |  | 174   |  |  |  | 166   | 
|                         |  |                        |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                         |  |                        | 1,022 |      |  |      | 915   |      |  |      | 1,183 |  |  |  | 978   |  |  |  | 952   | 
|                         |  |                        |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Total product sales      |  |                        |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Gasolines                |  |                        | 2,786 |      |  |      | 2,113 |      |  |      | 1,794 |  |  |  | 1,635 |  |  |  | 1,687 | 
|Kerosines                |  |                        | 782   |      |  |      | 668   |      |  |      | 542   |  |  |  | 567   |  |  |  | 594   | 
|Gas/Diesel oils          |  |                        | 2,295 |      |  |      | 1,948 |      |  |      | 1,731 |  |  |  | 1,757 |  |  |  | 1,787 | 
|Fuel oil                 |  |                        | 758   |      |  |      | 707   |      |  |      | 723   |  |  |  | 710   |  |  |  | 748   | 
|Other products           |  |                        | 778   |      |  |      | 707   |      |  |      | 784   |  |  |  | 697   |  |  |  | 900   | 
|                         |  |                        |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                         |  |                        | 7,399 |      |  |      | 6,143 |      |  |      | 5,574 |  |  |  | 5,366 |  |  |  | 5,716 | 
|                         |  |                        |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 

|                                          |  |                        |       |      |  |      |       |  |  |  |       | 
|----------------------------------------- |  | ---------------------- | ----- | ---- |  | ---- | ----- |  |  |  | ----- | 
|Group share of Equilon and Motiva volumes
|(not included above)                      |  | thousand barrels daily
|                                          |  | 2000                   |       | 1999 |  | 1998
|                                          |  |                        |       |      |  |     
|Total oil products sales                  |  |                        | 1,508 |      |  |      | 1,429 |  |  |  | 1,070 | 

|                                                      |  |      |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|----------------------------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- |  |  |  | ----- |  |  |  | ----- | 
|Sales by product as percentage of total product sales |  | %   
|                                                      |  | 2002 |       | 2001 |  | 2000 |       | 1999 |  | 1998
|                                                      |  |      |       |      |  |      |       |      |  |     
|Gasolines                                             |  |      | 37.7  |      |  |      | 34.4  |      |  |      | 32.2  |  |  |  | 30.5  |  |  |  | 29.5  | 
|Kerosines                                             |  |      | 10.6  |      |  |      | 10.9  |      |  |      | 9.7   |  |  |  | 10.6  |  |  |  | 10.4  | 
|Gas/Diesel oils                                       |  |      | 31.0  |      |  |      | 31.7  |      |  |      | 31.0  |  |  |  | 32.7  |  |  |  | 31.3  | 
|Fuel oil                                              |  |      | 10.2  |      |  |      | 11.5  |      |  |      | 13.0  |  |  |  | 13.2  |  |  |  | 13.1  | 
|Other products                                        |  |      | 10.5  |      |  |      | 11.5  |      |  |      | 14.1  |  |  |  | 13.0  |  |  |  | 15.7  | 
|                                                      |  |      |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|                                                      |  |      | 100.0 |      |  |      | 100.0 |      |  |      | 100.0 |  |  |  | 100.0 |  |  |  | 100.0 | 
|                                                      |  |      |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 

|                         |  |           |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|------------------------ |  | --------- | ------ | ---- |  | ---- | ------ | ---- |  | ---- | ------ |  |  |  | ------ |  |  |  | ------ | 
|Net product proceeds     |  | $ million
|by product               |  | 2002      |        | 2001 |  | 2000 |        | 1999 |  | 1998
|                         |  |           |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Gasolines                |  |           | 38,861 |      |  |      | 30,455 |      |  |      | 27,046 |  |  |  | 18,594 |  |  |  | 18,603 | 
|Kerosines                |  |           | 9,170  |      |  |      | 8,710  |      |  |      | 7,877  |  |  |  | 5,300  |  |  |  | 4,748  | 
|Gas/Diesel oils          |  |           | 28,077 |      |  |      | 25,735 |      |  |      | 25,211 |  |  |  | 16,985 |  |  |  | 16,018 | 
|Fuel oil                 |  |           | 6,591  |      |  |      | 5,900  |      |  |      | 6,752  |  |  |  | 4,309  |  |  |  | 3,546  | 
|Other products           |  |           | 11,420 |      |  |      | 9,845  |      |  |      | 10,470 |  |  |  | 8,243  |  |  |  | 7,631  | 
|                         |  |           |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Total oil products       |  |           | 94,119 |      |  |      | 80,645 |      |  |      | 77,356 |  |  |  | 53,431 |  |  |  | 50,546 | 
|                         |  |           |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|by geographical area     |  |           |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Europe                   |  |           | 30,228 |      |  |      | 25,077 |      |  |      | 26,189 |  |  |  | 18,648 |  |  |  | 16,944 | 
|Other Eastern Hemisphere |  |           | 16,801 |      |  |      | 17,371 |      |  |      | 18,278 |  |  |  | 13,254 |  |  |  | 12,000 | 
|USA                      |  |           | 26,200 |      |  |      | 17,199 |      |  |      | 5,068  |  |  |  | 3,202  |  |  |  | 3,916  | 
|Other Western Hemisphere |  |           | 10,836 |      |  |      | 12,118 |      |  |      | 14,226 |  |  |  | 11,300 |  |  |  | 12,240 | 
|Export sales             |  |           | 10,054 |      |  |      | 8,880  |      |  |      | 13,595 |  |  |  | 7,027  |  |  |  | 5,446  | 
|                         |  |           |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|Total oil products       |  |           | 94,119 |      |  |      | 80,645 |      |  |      | 77,356 |  |  |  | 53,431 |  |  |  | 50,546 | 
|                         |  |           |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 

|                             |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|---------------------------- |  | ------------ | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- |  |  |  | ----- |  |  |  | ----- | 
|Average net product proceeds |  | $ per barrel
|by product                   |  | 2002         |       | 2001 |  | 2000 |       | 1999 |  | 1998
|                             |  |              |       |      |  |      |       |      |  |     
|Gasolines                    |  |              | 38.22 |      |  |      | 39.50 |      |  |      | 41.20 |  |  |  | 31.16 |  |  |  | 30.22 | 
|Kerosines                    |  |              | 32.12 |      |  |      | 35.70 |      |  |      | 39.69 |  |  |  | 25.61 |  |  |  | 21.91 | 
|Gas/Diesel oils              |  |              | 33.52 |      |  |      | 36.19 |      |  |      | 39.79 |  |  |  | 26.49 |  |  |  | 24.55 | 
|Fuel oil                     |  |              | 23.82 |      |  |      | 22.85 |      |  |      | 25.52 |  |  |  | 16.62 |  |  |  | 12.98 | 
|Other products               |  |              | 40.21 |      |  |      | 38.14 |      |  |      | 36.51 |  |  |  | 32.38 |  |  |  | 23.23 | 
|                             |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Total oil products           |  |              | 34.85 |      |  |      | 35.96 |      |  |      | 37.92 |  |  |  | 27.28 |  |  |  | 24.23 | 
|                             |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|by geographical area         |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Europe                       |  |              | 38.11 |      |  |      | 37.09 |      |  |      | 39.52 |  |  |  | 27.92 |  |  |  | 25.20 | 
|Other Eastern Hemisphere     |  |              | 35.77 |      |  |      | 37.83 |      |  |      | 39.93 |  |  |  | 28.78 |  |  |  | 25.87 | 
|USA                          |  |              | 33.55 |      |  |      | 35.78 |      |  |      | 31.98 |  |  |  | 22.70 |  |  |  | 15.27 | 
|Other Western Hemisphere     |  |              | 38.18 |      |  |      | 41.47 |      |  |      | 43.34 |  |  |  | 34.00 |  |  |  | 35.37 | 
|Export sales                 |  |              | 26.95 |      |  |      | 26.59 |      |  |      | 31.40 |  |  |  | 19.69 |  |  |  | 15.67 | 
|                             |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Total oil products           |  |              | 34.85 |      |  |      | 35.96 |      |  |      | 37.92 |  |  |  | 27.28 |  |  |  | 24.23 | 
|                             |  |              |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 



---

|a |  | For the period 19982000 the Group share of Equilon and Motiva volumes was reported separately.                                                                                                                                                                                                                                                                                                                                                                                        
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|b |  | The basis of reporting in 2002 has been changed to reflect only those activities which relate to the Oil Products business  previously some volumes handled by
other businesses were included; the 2001 figures have been restated on a similar basis. The 2002 reported volumes include 100% of Equilon (now Shell Oil
Products US) and 50% of Motiva sales to third parties; the 2001 figures have been restated in accordance with the ownership interests prevailing at that time.
| 
|c |  | Sales figures exclude deliveries to other companies under reciprocal purchase and sale arrangements which are in the nature of exchanges. Sales of condensate
and natural gas liquids are included.                                                                                                                                                                                                                                                                                    
| 
|d |  | By country of destination, except where the ultimate destination is not known at the time of sale, in which case the sales are shown as export sales.                                                                                                                                                                                                                                                                                                                                  

28     Royal Dutch/Shell Group of Companies  Business and Property



---



##### Table of Contents



(b)   Trading

In 2002, Shell Trading (US) Company (STUSCO) assumed the trading activities
that had previously been conducted on behalf of Equilon Enterprises LLC and
Motiva Enterprises LLC by Equiva Trading Company and its subsidiary Equiva
Trading International.

(c)   Shipping

During 2002, two new LNG carriers, each with a capacity of 134,500 cubic
metres, were acquired to meet the growing demand for LNG shipping. One 32,477
deadweight tonne oil tanker was sold to a third party for further trading. The
end 2002 tanker fleet numbers include the STUSCO US flag coastal products
vessels.

|                                                   |  |      |    |      |  |      |    |      |  |      |    |      |  |                 |    |      |  |      |    |      |  |  |     |                           |  |  |     |  |  |  |     |  |  |  |     |  |  |  |     | 
|-------------------------------------------------- |  | ---- | -- | ---- |  | ---- | -- | ---- |  | ---- | -- | ---- |  | --------------- | -- | ---- |  | ---- | -- | ---- |  |  | --- | ------------------------- |  |  | --- |  |  |  | --- |  |  |  | --- |  |  |  | --- | 
|Oil
tankersa(at December 31)                       |  |      |    |      |  |      |    |      |  |      |    |      |  | number of ships |    |      |  |      |    |      |  |  |     | million deadweight tonnes
|Owned/demise-hired                                 |  | 2002 |    | 2001 |  | 2000 |    | 1999 |  | 1998 |    | 2002 |  | 2001            |    | 2000 |  | 1999 |    | 1998
|                                                   |  |      |    |      |  |      |    |      |  |      |    |      |  |                 |    |      |  |      |    |     
|VLCCs (very large crude carriers over 160,000 dwt) |  |      | 7  |      |  |      | 7  |      |  |      | 8  |      |  |                 | 9  |      |  |      | 9  |      |  |  | 2.1 |                           |  |  | 2.1 |  |  |  | 2.3 |  |  |  | 2.6 |  |  |  | 2.6 | 
|Large range (45,000 to 160,000 dwt)                |  |      | 16 |      |  |      | 16 |      |  |      | 16 |      |  |                 | 17 |      |  |      | 18 |      |  |  | 1.3 |                           |  |  | 1.3 |  |  |  | 1.3 |  |  |  | 1.4 |  |  |  | 1.4 | 
|Medium range (25,000 to 45,000 dwt)                |  |      | 5  |      |  |      | 6  |      |  |      | 5  |      |  |                 | 7  |      |  |      | 8  |      |  |  | 0.2 |                           |  |  | 0.2 |  |  |  | 0.1 |  |  |  | 0.2 |  |  |  | 0.3 | 
|General purpose (10,000 to 25,000 dwt)/Specialist  |  |      | 2  |      |  |      | 2  |      |  |      | 1  |      |  |                 | 1  |      |  |      | 2  |      |  |  | 0.1 |                           |  |  | 0.1 |  |  |  | 0.1 |  |  |  | 0.1 |  |  |  | 0.1 | 
|                                                   |  |      |    |      |  |      |    |      |  |      |    |      |  |                 |    |      |  |      |    |      |  |  |     |                           |  |  |     |  |  |  |     |  |  |  |     |  |  |  |     | 
|                                                   |  |      | 30 |      |  |      | 31 |      |  |      | 30 |      |  |                 | 34 |      |  |      | 37 |      |  |  | 3.7 |                           |  |  | 3.7 |  |  |  | 3.8 |  |  |  | 4.3 |  |  |  | 4.4 | 
|                                                   |  |      |    |      |  |      |    |      |  |      |    |      |  |                 |    |      |  |      |    |      |  |  |     |                           |  |  |     |  |  |  |     |  |  |  |     |  |  |  |     | 
|Time-chartered                                     |  |      |    |      |  |      |    |      |  |      |    |      |  |                 |    |      |  |      |    |      |  |  |     |                           |  |  |     |  |  |  |     |  |  |  |     |  |  |  |     | 
|VLCCs (very large crude carriers over 160,000 dwt) |  |      | 1  |      |  |      |   |      |  |      |   |      |  |                 |   |      |  |      |   |      |  |  | 0.3 |                           |  |  |    |  |  |  |    |  |  |  |    |  |  |  |    | 
|Large range (45,000 to 160,000 dwt)                |  |      | 18 |      |  |      | 17 |      |  |      | 9  |      |  |                 | 9  |      |  |      | 15 |      |  |  | 1.5 |                           |  |  | 1.5 |  |  |  | 0.7 |  |  |  | 0.8 |  |  |  | 1.3 | 
|Medium range (25,000 to 45,000 dwt)                |  |      | 15 |      |  |      | 7  |      |  |      | 8  |      |  |                 | 7  |      |  |      | 8  |      |  |  | 0.6 |                           |  |  | 0.3 |  |  |  | 0.3 |  |  |  | 0.3 |  |  |  | 0.3 | 
|General purpose (10,000 to 25,000 dwt)/Specialist  |  |      | 6  |      |  |      | 7  |      |  |      | 1  |      |  |                 | 1  |      |  |      | 1  |      |  |  | 0.1 |                           |  |  | 0.1 |  |  |  | 0.1 |  |  |  | 0.1 |  |  |  | 0.1 | 
|                                                   |  |      |    |      |  |      |    |      |  |      |    |      |  |                 |    |      |  |      |    |      |  |  |     |                           |  |  |     |  |  |  |     |  |  |  |     |  |  |  |     | 
|                                                   |  |      | 40 |      |  |      | 31 |      |  |      | 18 |      |  |                 | 17 |      |  |      | 24 |      |  |  | 2.5 |                           |  |  | 1.9 |  |  |  | 1.1 |  |  |  | 1.2 |  |  |  | 1.7 | 
|                                                   |  |      |    |      |  |      |    |      |  |      |    |      |  |                 |    |      |  |      |    |      |  |  |     |                           |  |  |     |  |  |  |     |  |  |  |     |  |  |  |     | 
|Total oil tankers                                  |  |      | 70 |      |  |      | 62 |      |  |      | 48 |      |  |                 | 51 |      |  |      | 61 |      |  |  | 6.2 |                           |  |  | 5.6 |  |  |  | 4.9 |  |  |  | 5.5 |  |  |  | 6.1 | 
|                                                   |  |      |    |      |  |      |    |      |  |      |    |      |  |                 |    |      |  |      |    |      |  |  |     |                           |  |  |     |  |  |  |     |  |  |  |     |  |  |  |     | 
|Owned/demise-hired under construction or on order  |  |      |   |      |  |      |   |      |  |      |   |      |  |                 |   |      |  |      | 1  |      |  |  |    |                           |  |  |    |  |  |  |    |  |  |  |    |  |  |  | 0.1 | 
|                                                   |  |      |    |      |  |      |    |      |  |      |    |      |  |                 |    |      |  |      |    |      |  |  |     |                           |  |  |     |  |  |  |     |  |  |  |     |  |  |  |     | 

|                                                        |  |      |   |      |  |      |   |      |  |      |   |      |  |                 |   |      |  |      |   |      |  |  |     |                       |  |  |     |  |  |  |     |  |  |  |     |  |  |  |     | 
|------------------------------------------------------- |  | ---- | - | ---- |  | ---- | - | ---- |  | ---- | - | ---- |  | --------------- | - | ---- |  | ---- | - | ---- |  |  | --- | --------------------- |  |  | --- |  |  |  | --- |  |  |  | --- |  |  |  | --- | 
|Gas Carriersa (at December 31)                          |  |      |   |      |  |      |   |      |  |      |   |      |  | number of ships |   |      |  |      |   |      |  |  |     | thousand cubic metres
|                                                        |  | 2002 |   | 2001 |  | 2000 |   | 1999 |  | 1998 |   | 2002 |  | 2001            |   | 2000 |  | 1999 |   | 1998
|                                                        |  |      |   |      |  |      |   |      |  |      |   |      |  |                 |   |      |  |      |   |     
|Owned/demise-hired (LNG)                                |  |      | 4 |      |  |      | 2 |      |  |      |  |      |  |                 |  |      |  |      |  |      |  |  | 522 |                       |  |  | 253 |  |  |  |    |  |  |  |    |  |  |  |    | 
|Time-chartered (LNG)                                    |  |      |  |      |  |      |  |      |  |      | 2 |      |  |                 | 2 |      |  |      | 2 |      |  |  |    |                       |  |  |    |  |  |  | 253 |  |  |  | 253 |  |  |  | 253 | 
|Owned/demise-hired (LPG)                                |  |      | 1 |      |  |      | 1 |      |  |      | 1 |      |  |                 | 1 |      |  |      | 2 |      |  |  | 59  |                       |  |  | 59  |  |  |  | 59  |  |  |  | 59  |  |  |  | 118 | 
|Time-chartered (LPG)                                    |  |      | 3 |      |  |      | 2 |      |  |      | 2 |      |  |                 | 2 |      |  |      | 4 |      |  |  | 145 |                       |  |  | 113 |  |  |  | 155 |  |  |  | 157 |  |  |  | 317 | 
|                                                        |  |      |   |      |  |      |   |      |  |      |   |      |  |                 |   |      |  |      |   |      |  |  |     |                       |  |  |     |  |  |  |     |  |  |  |     |  |  |  |     | 
|Total gas carriers                                      |  |      | 8 |      |  |      | 5 |      |  |      | 5 |      |  |                 | 5 |      |  |      | 8 |      |  |  | 726 |                       |  |  | 425 |  |  |  | 467 |  |  |  | 469 |  |  |  | 688 | 
|                                                        |  |      |   |      |  |      |   |      |  |      |   |      |  |                 |   |      |  |      |   |      |  |  |     |                       |  |  |     |  |  |  |     |  |  |  |     |  |  |  |     | 
|Owned/demise-hired under construction or on order (LNG) |  |      | 2 |      |  |      | 4 |      |  |      |  |      |  |                 |  |      |  |      |  |      |  |  | 277 |                       |  |  | 556 |  |  |  |    |  |  |  |    |  |  |  |    | 
|                                                        |  |      |   |      |  |      |   |      |  |      |   |      |  |                 |   |      |  |      |   |      |  |  |     |                       |  |  |     |  |  |  |     |  |  |  |     |  |  |  |     | 



---

|a |  | Excluding ships of less than 10,000 deadweight tonnes.
|- |  | ------------------------------------------------------

Royal Dutch/Shell Group of Companies  Business and Property     29



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##### Table of Contents






4   Chemicals

Group companies currently produce a large number of base chemicals and
petrochemicals. They are major suppliers of base chemicals, styrene monomer,
propylene oxide, solvents, detergent intermediates and ethylene oxide and its
derivatives. In addition, they are major manufacturers of catalysts and
additives.

The long-term Chemicals portfolio consists of eight product business areas and
four stand-alone companies or ventures  Basell, CRI International, Infineum,
and Saudi Petrochemical Company.

Basell, a 50:50 joint venture between Group companies and BASF, is a global
polyolefins company with customers in more than 120 countries and manufacturing
facilities in 18 countries. CRI International Group is a major player in the
refinery, petrochemical and environmental catalyst markets. It is a wholly
owned Group subsidiary and is participating in three 50:50 joint ventures.
Infineum, a 50:50 joint venture between Group companies and ExxonMobil with
manufacturing locations in 12 countries, formulates, manufactures and markets
high-quality fuel, lubricant and specialty additives and components.

In November 2002, the final investment decision was taken to proceed with the
construction of the $4.3 billion Nanhai petrochemicals complex in southern
China.

At December 31, 2002, Group companies had major interests in chemical
manufacturing plants, as described below and on the following pages.

|                                       |  |           |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|-------------------------------------- |  | --------- | ------ | ---- |  | ---- | ------ | ---- |  | ---- | ------ |  |  |  | ------ |  |  |  | ------ | 
|Sales                                  |  | $ million
|Net proceeds by main product categorya |  | 2002      |        | 2001 |  | 2000 |        | 1999 |  | 1998
|                                       |  |           |        |      |  |      |        |      |  |     
|Base and Intermediates                 |  |           | 5,689  |      |  |      | 5,376  |      |  |      | 5,822  |  |  |  | 4,285  |  |  |  | 4,124  | 
|Performance products                   |  |           | 3,634  |      |  |      | 3,032  |      |  |      | 6,000  |  |  |  | 5,962  |  |  |  | 5,479  | 
|Differentiated products                |  |           | 922    |      |  |      | 670    |      |  |      | 1,649  |  |  |  | 1,617  |  |  |  | 2,127  | 
|Other                                  |  |           | 1,245  |      |  |      | 1,538  |      |  |      | 1,734  |  |  |  | 1,022  |  |  |  | 542    | 
|                                       |  |           |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|                                       |  |           | 11,490 |      |  |      | 10,616 |      |  |      | 15,205 |  |  |  | 12,886 |  |  |  | 12,272 | 
|                                       |  |           |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 

|                                   |  |           |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|---------------------------------- |  | --------- | ------ | ---- |  | ---- | ------ | ---- |  | ---- | ------ |  |  |  | ------ |  |  |  | ------ | 
|Net proceeds by geographical areaa |  | $ million
|                                   |  | 2002      |        | 2001 |  | 2000 |        | 1999 |  | 1998
|                                   |  |           |        |      |  |      |        |      |  |     
|Europe                             |  |           | 4,086  |      |  |      | 3,721  |      |  |      | 5,657  |  |  |  | 5,365  |  |  |  | 5,381  | 
|Other Eastern Hemisphere           |  |           | 2,192  |      |  |      | 1,659  |      |  |      | 1,921  |  |  |  | 1,621  |  |  |  | 1,324  | 
|USA                                |  |           | 4,710  |      |  |      | 4,950  |      |  |      | 7,095  |  |  |  | 5,327  |  |  |  | 4,991  | 
|Other Western Hemisphere           |  |           | 502    |      |  |      | 286    |      |  |      | 532    |  |  |  | 573    |  |  |  | 576    | 
|                                   |  |           |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|                                   |  |           | 11,490 |      |  |      | 10,616 |      |  |      | 15,205 |  |  |  | 12,886 |  |  |  | 12,272 | 
|                                   |  |           |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 

|                                        |  |                 |        |      |  |      |        |      |  |      |        |  |  |  |        |  |  |  |        | 
|--------------------------------------- |  | --------------- | ------ | ---- |  | ---- | ------ | ---- |  | ---- | ------ |  |  |  | ------ |  |  |  | ------ | 
|Sales volumes by main product categoryb |  | thousand tonnes
|                                        |  | 2002            |        | 2001 |  | 2000 |        | 1999 |  | 1998
|                                        |  |                 |        |      |  |      |        |      |  |     
|Base and Intermediates                  |  |                 | 13,658 |      |  |      | 13,143 |      |  |      | 11,606 |  |  |  | 11,358 |  |  |  | 10,910 | 
|Performance products                    |  |                 | 5,444  |      |  |      | 4,442  |      |  |      | 7,562  |  |  |  | 8,282  |  |  |  | 6,880  | 
|Differentiated products                 |  |                 | 2,290  |      |  |      | 1,293  |      |  |      | 1,120  |  |  |  | 1,266  |  |  |  | 2,194  | 

|                                                  |  |      |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|------------------------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- |  |  |  | ----- |  |  |  | ----- | 
|Ethylene
capacityc Group and associated companies
|                                                  |  | 2002 |       | 2001 |  | 2000 |       | 1999 |  | 1998
|                                                  |  |      |       |      |  |      |       |      |  |     
|Nominal capacity (thousand tonnes/year)           |  |      | 6,231 |      |  |      | 5,808 |      |  |      | 5,438 |  |  |  | 5,307 |  |  |  | 5,259 | 
|Utilisation (%)                                   |  |      | 92    |      |  |      | 86    |      |  |      | 94    |  |  |  | 94    |  |  |  | 88    | 



---

|a |  | Excluding proceeds from chemical trading activity.                                                                           
|- |  | -----------------------------------------------------------------------------------------------------------------------------
| 
|b |  | Excluding volumes from chemical trading activity.                                                                            
| 
|c |  | Data includes the ethylene complex at Mossmorran, UK, in which a Group company has 50% offtake rights but no equity interest.

30     Royal Dutch/Shell Group of Companies  Business and Property



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##### Table of Contents



Europe

BelgiumCRI Catalyst Co Belgium N.V. manufactures catalysts at plants in Ghent.
Bayer-Shell Isocyanates N.V., a 50:50 joint venture, produces toluene
diisocyanate (TDI) and diphenyl methane diisocyanate (MDI) in Antwerp. All of
the TDI production is allocated to the Group. During December 2002, Belgian
Shell disposed of its 50% stake in North Sea Petrochemicals.

FranceAt Berre LEtang, Shell Pétrochimie Méditerranée (Group interest 100%)
manufactures aromatics, butadiene, solvents, di-isobutylene (DIB) and some fine
Chemicals (cyclo-octadiene/cyclo-dodecatriene). It operates polypropylene and
polyethylene plants on behalf of Basell and a cracker on behalf of a 50:50
Shell Pétrochime Méditerranée-Basell joint venture. It also operates additives
plants on behalf of Infineum and several polymer units on behalf of third party
companies. Basell also manufactures low-density polyethylene at Fos. The Basell
polyethylene plant started at the beginning of 2001.

GermanyAt Godorf, Shell DEA Oil GmbH, (SDO) (Group interest 100% since July
2002) manufactures benzene and toluene. Ex DEA plants also operated by SDO are:
Wesseling (benzene and ethylene); Heide (benzene and ethylene); Karlsruhe, SDO
32.25% (propylene and MTBE); Schwedt, SDO 37.5% (propylene, benzene, toluene
and xylene).

NetherlandsShell Nederland Chemie B.V. (SNC) (Group interest 100%)
manufactures solvents, MTBE, brake fluids, glycolethers and urethanes (polyols)
at Pernis, and lower olefins, benzene, ethyl benzene, ethylene oxide, styrene
and propylene oxide at Moerdijk. At Pernis, SNC operates a polypropylene plant
owned by Basell. At Moerdijk, SNC operates a styrene monomer and propylene
oxide (SM/PO) plant, which is owned by Ellba CV, a 50:50 joint venture between
the Group and BASF.

In late 2001, Shell Nederland Chemie brought a 100,000 tonne per year propylene
oxide glycol ether plant on stream at Pernis, the Netherlands. The plant makes
propylene glycol monomethyl ether, dipropylene glycol monomethyl ether, and
propylene glycol monoethyl ether, some of which is esterified to form acetates.
It adjoins a multipurpose plant in Pernis, which is producing 65,000 tonnes per
year of ethylene oxide glycol ethers and brake fluids. The unit is connected by
pipeline to cost-competitive propylene oxide supplies from Ellbas existing
styrene monomer and propylene oxide operations in Moerdijk. Demand for
propylene oxide glycol ethers as high-performance solvents is increasing
worldwide in order to meet environmental quality legislation.

In November 2002, a new 500,000 tonnes per year benzene extraction unit came on
stream one month ahead of schedule in Moerdijk. The unit will take benzene-rich
streams from SNCs Moerdijk cracker and other Group European locations and the
output will be used for styrene monomer/propylene oxide production on the same
site.

Using the Groups SMPO process, Ellba produces simultaneously styrene monomer,
of which the vast majority is used in polystyrene production, and propylene
oxide, a chemical building block in a series of products, from industrial foams
to surfactants, solvents, additives and lubricants.

As part of the ongoing drive to streamline chemicals operations a new supply
and marketing company, Shell Chemicals Europe B.V., was established in the
Netherlands. It started operations during November 2002. The new company is
responsible for all chemicals sales contracts, supply chain management, and
procurement of feedstocks and process chemicals across Western Europe. The
primary contacts for customers and suppliers have remained unchanged.

The new structure is designed to improve speed and efficiency and overall ease
of doing business for customers and suppliers, both today and in the future
with new e-business systems. It is an important milestone in Chemicals drive
to simplify and streamline business processes and in making it easy to do
business with Shell chemicals companies. The move builds on the steps already
taken by Shell chemicals companies to operate on a regional and global basis
and also ensures that they are well positioned to respond to European
harmonisation.

United KingdomShell U.K. Limited on behalf of Shell Chemicals UK Limited (both
Group interest 100%) operates plants at Stanlow, where base chemicals,
detergents and intermediates, and industrial chemicals are produced. Basell
produces polypropylene and low-density polyethylene at Carrington.
Derivatives from ethylene oxide and propylene oxide are also manufactured at
Carrington on behalf of Shell Chemicals UK. On the former ICI site at Wilton,
Shell Chemicals UK has rights to an ethylene oxide supply and owns an
ethoxylation unit. At Fife in Scotland, ExxonMobil operates an ethylene plant
in which Shell Chemicals UK has an investment in a processing rights agreement
entitling it to 50% of the output.

Royal Dutch/Shell Group of Companies  Business and Property     31



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Other Eastern Hemisphere

AustraliaBasell produces polypropylene at plants in Clyde and Geelong, and
operates a propylene splitting unit at Clyde.

ChinaOn December 28, 2000, Chinese authorities granted a business licence to
the newly formed joint venture CNOOC and Shell Petrochemicals Company Limited.
This is a 50:50 joint venture between Shell Nanhai BV (Group interest 100%) and
CNOOC Petrochemicals Investment Limited. A final investment decision was made
by the venture partners in November 2002 to proceed with the joint venture
plans to construct a petrochemicals complex in the Huizhou municipality of the
Guangdong province. Its major products would include ethylene and propylene;
styrene monomer/propylene oxide; mono-ethylene glycol; polypropylene;
high-density polyethylene; low-density polyethylene; and butadiene.
Construction is in process with the plant scheduled to be completed in late
2005.

Saudi ArabiaThe Saudi Petrochemical Company (SADAF), a 50:50 joint venture
with Saudi Basic Industries Corporation, owns a one million tonne a year
ethylene cracker and downstream plants capable of producing 3.6 million tonnes
a year of crude industrial ethanol, ethylene dichloride, caustic soda, styrene
and methyl tertiary butyl ether. The marketing arms of both partners handle
local and international marketing of SADAF products. The Groups marketing
effort is co-ordinated by Shell Trading (M.E.) Private Limited (Group interest
100%) located in Dubai, United Arab Emirates.

SingaporeGroup companies own equity interests of 50% and 30% in two
Sumitomo-managed joint ventures, namely Petrochemical Corporation of Singapore
Private Limited (PCS) and The Polyolefin Company (Singapore) Pte Limited (TPC)
respectively. PCS owns and operates two ethylene crackers with a total capacity
of one million tonnes a year of ethylene and 500,000 tonnes a year of
propylene. In 2000, a condensate splitter unit, owned 50:50 by PCS and the
Group, but located in and operated by the Groups refinery on Pulau Bukom, was
started up. This splitter supplies half of PCSs feedstock requirements. Group
companies also own 70% of Ethylene Glycols (Singapore) Pte Ltd and 100% of
Seraya Chemicals Singapore (Pte) Ltd, which own and operate an ethylene
oxide/glycols plant and a styrene monomer/propylene oxide (SMPO) plant
respectively. A new world-scale SMPO plant started operations in mid 2002 on a
50:50 basis with BASF, on the Seraya site. Mitsubishi Chemical Corporation has
acquired capacity rights for up to 380,000 tonnes of styrene monomer with
regard to the existing and new SMPO plants.

USA

Shell Chemical LP (Group interest 99.1%) has manufacturing facilities located
at Mobile, Alabama; Martinez, California; St. Rose, Geismar and Norco,
Louisiana; and Deer Park, Texas. Manufactured chemical products include lower
olefins, aromatics/phenol, solvents, ethylene oxide/glycol, higher olefins and
their derivatives, propanediol (PDO), styrene monomer-propylene, additives and
catalysts. These chemical products are used in many consumer and industrial
products and processes and are sold primarily to industrial markets in the
United States.

In 2002 Shell Chemical LP completed a major expansion project at its Geismar,
Louisiana facility, securing its position as an integrated global producer of
higher olefins, alcohols and ethoxylates. This expansion significantly
increased current production capability for higher olefins and detergent
alcohols. The new linear alpha olefin unit that uses the SHOP process (Shell
Higher Olefins Process) has a capacity to produce 320,000 tonnes per year,
bringing the Groups total higher olefins capacity to 1,250,000 tonnes per
year. Linear alpha olefins are used to make products such as linear low-density
polyethylene, high-performance synthetic lubricants, biodegradable detergents,
and environmentally compliant oilfield drilling fluids.

In addition, a debottlenecking project has expanded Geismars capacity to
produce NEODOL detergent alcohols and LINEVOL plasticiser alcohols by about
150,000 tonnes per year. NEODOL alcohols are used primarily to produce
biodegradable surfactants for use in household detergents.

Sabina Petrochemicals, a joint venture (Group interest 62%) between Shell
Chemicals, BASF Corporation and ATOFINA Petrochemicals, Inc., a division of
Totalfinaelf SA, continues with the
construction of a world-scale integrated butadiene complex (including a
world-scale butadiene extraction unit, indirect alkylation unit, pipelines, and
other offsite facilities) in Port Arthur, Texas. Planned for start up in early
2004, the butadiene extraction facility will have a production capacity of
400,000 tonnes a year and will meet the growing needs of customers in the
areas butadiene triangle, including many tire manufacturers. With this
expansion, the Group is bringing production close to the largest concentration
of butadiene consumers in the world.

32     Royal Dutch/Shell Group of Companies  Business and Property



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A cracker in Deer Park is also being expanded through a major debottleneck
project. The additional capacity of approximately 540,000 tonnes of ethylene a
year is planned to come on stream in late 2003. When completed, the world-scale
Deer Park facility is expected to produce about 1.3 million tonnes of ethylene
a year. A major part of the Deer Park output will feed the above-mentioned
higher olefins and detergent development project at Geismar and the butadiene
joint venture at Port Arthur. Chemicals is planning to connect these
developments by pipelines with Deer Park.

In addition, Basell operates polyolefin plants in Bayport, Texas; Jackson,
Tennessee; and Lake Charles, Louisiana. Infineum has manufacturing facilities
in Argo, Illinois; Baytown, Texas; Bayway, New Jersey; and Belpre, Ohio. CRIs
catalyst manufacturing locations are at Martinez, Pittsburgh and Azusa, in
California; Lafayette, Louisiana; Michigan City, Indiana; and Willow Island,
West Virginia.

Other Western Hemisphere

Puerto RicoShell Chemical Yabucoa Inc owns and operates a 77,000-barrels a day
refinery producing feedstock for Shells Deer Park, TX and Norco, LA chemical
plants. The facility also produces gasoline, diesel, jet fuel and residual
fuels, which are primarily being used in Puerto Rico. This refinery was
acquired in 2001 from Puerto Rico Sun Oil Company, LLC.

CanadaShell Chemicals Canada Limited (Group interest 100%) produces styrene,
isopropyl alcohol, and ethylene glycol, and markets a broad range of
petrochemicals. Manufacturing locations are at Scotford, Alberta, and Sarnia,
Ontario. Basell owns and operates a polypropylene unit both at Varennes,
Quebec, and at Sarnia. Basell also operates the isopropyl alcohol plant at
Sarnia on behalf of Shell Chemicals Canada Ltd.

In 2002, a joint venture contract was signed with SGF Chimie, a subsidiary of
the Société Générale de Financement du Québec, to form a 50:50 joint venture
that plans to build and operate the first world-scale polytrimethylene
terephthalate (PTT) plant near Montreal. The 95,000 tonnes per year plant is
expected to start production at the end of 2003. The Group markets PTT under
the trademark CORTERRA Polymers, with their main use in carpet and textile
fibres.




5   Renewables

Group companies also seek opportunities in other businesses aimed at enhancing
longer-term prospects for growth and profitability. Shell Renewables is
developing the Groups options in renewable energy, focusing on two principle
areas  solar and wind energy. The business manufactures and markets solar
energy systems, and develops and operates wind parks.

Shell Solar moved into the top five global players with the acquisition of
Siemens Solar in April 2002. The company manufactures solar photovoltaic
products in Europe, the US and Asia. Sales operations based in over 90
countries around the world provide customers with solar solutions to their
energy requirements working through a network of distributors, dealers and
Shell owned outlets. The main customer segments for the Shell Solar business
are grid connected, industrial, rural and consumer markets. Shell WindEnergy is
focusing on developing and operating wind farms and selling green electricity,
building on its strengths in project management, financing and engineering
design. Business development activity is concentrated in Europe and North
America. In 2002 the company brought on stream two wind parks in California 
Cabazon and White Water Hill  bringing the overall portfolio to 240MW.

Royal Dutch/Shell Group of Companies  Business and Property     33



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##### Table of Contents






6   Other Activities

For information on Shell Consumer and Shell Hydrogen see pages 53 and 54.




7   Research

Group research and development (R&D) programmes are carried out through a
worldwide network of laboratories, with major efforts concentrated in the
Netherlands, UK and USA; other laboratories are located in Belgium, Canada,
France, Germany, Japan and Singapore. Group companies R&D expenses (including
depreciation) for the years 1998 to 2002 are set out below:

|                                     |  |           |     |      |  |      |     |      |  |      |     |  |  |  |     |  |  |  |     | 
|------------------------------------ |  | --------- | --- | ---- |  | ---- | --- | ---- |  | ---- | --- |  |  |  | --- |  |  |  | --- | 
|Research and development expenditure |  | $ million
|                                     |  | 2002      |     | 2001 |  | 2000 |     | 1999 |  | 1998
|                                     |  |           |     |      |  |      |     |      |  |     
|Total (including depreciation)       |  |           | 472 |      |  |      | 387 |      |  |      | 389 |  |  |  | 505 |  |  |  | 799 | 

Exploration and Production

Shells R&D division is responsible for the research, development and
application of integrated technology solutions for Group operating assets
around the world. The divisions primary business objectives are: select,
develop and implement technologies that enable the Group operating assets to
successfully discover and produce greater levels of hydrocarbons; achieve
continual improvement of cost efficiency, increase operational safety and
reduce environmental impact.

In-house capabilities are used in the research, development and application of
proprietary E&P technologies in conjunction with service industry or academic
capabilities where applicable.

Primary technology focus areas of the division are: enhanced sub-surface
imaging, complex reservoir performance modelling, enhanced well construction,
and smaller, more efficient production facilities both onshore and offshore
including subsea.

Gas & Power

The focus of R&D has been on cost leadership and the creation of viable
business opportunities through maintaining Shells competitive position in
liquefied natural gas (LNG) technology, particularly LNG processing, safety,
transport and storage. Recently the Floating LNG (FLNG) concept has been added
to Shell technology portfolio. The concept benefits mainly from the elimination
of a long pipeline needed to deliver feed gas to shore-based plants in the
commercialisation of remote gas reserves. The Group is further developing its
leading position in Gas to Liquids (GTL) conversion through R&D programmes
aimed at improving catalysts and process technology to further reduce capital
costs and improve process efficiency. GTL product development is also an
important focus of work. Group companies have a high international reputation
in matters of safety and the environment, and are leading participants in the
setting of safety standards for gas operations. Furthermore R&D efforts are
focused on maintaining a leading edge with regard to sustainable development
across the Gas & Power technology portfolio.

Oil Products

R&D programmes continue to emphasise the improvement of key products and their
applications and the further advancement of process technologies including
related technical services that provide Group companies with a competitive
advantage. For the fuels business, top tier differentiated fuels have been
launched in more than 40 countries. Further effort was focused on the cost
effective formulation of new products and cost reduction in current
formulations. Product stewardship considerations, particularly those related to
health and the environment, continue to be given high priority in all areas.

Key drivers in process research have been the need to achieve best-in-class
performance in terms of reliability and availability, supply
chain optimisation, cost reduction and further reduction in energy consumption
and CO2 emissions. Catalyst development has
contributed to increased margin generation. Environmentally focused programmes
provide solutions ranging from soil remediation techniques to explosion hazard
assessments.

A strategic programme aimed at developing break-through options in sustainable
energy and sustainable mobility is pursued, covering
new routes from biomass to bio-fuels and a new approach to CO2 sequestration by
mineralisation. The further development of the
catalytic partial oxidation technology continues to be followed up commercially
with the shorter-term focus on stationary applications.

34     Royal Dutch/Shell Group of Companies  Business and Property



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##### Table of Contents



Chemicals

R&D and other technical services continue to improve key products and
technologies that provide Shell Chemicals with sustainable leadership positions
in selected products. Improvements in manufacturing processes  achieved by
means of increased feedstock flexibility, product yield, energy efficiency or
plant throughput  are leading to lower production costs at existing
facilities. Process intensification and manufacturing integration is resulting
in lower unit investment costs. Market positions are being enhanced through the
introduction of new product concepts, close technical links with important
industrial customers, and the full integration of R&D into the business.




F   PERSONNEL

|                                        |  |           |     |      |  |      |    |      |  |      |    |  |  |  |    |  |  |  |     | 
|--------------------------------------- |  | --------- | --- | ---- |  | ---- | -- | ---- |  | ---- | -- |  |  |  | -- |  |  |  | --- | 
|Employees
by segment (average numbers)a |  | thousands
|                                        |  | 2002      |     | 2001 |  | 2000 |    | 1999 |  | 1998
|                                        |  |           |     |      |  |      |    |      |  |     
|Exploration and Production              |  |           | 17  |      |  |      | 14 |      |  |      | 13 |  |  |  | 14 |  |  |  | 16  | 
|Gas & Power                             |  |           | 2   |      |  |      | 2  |      |  |      | 2  |  |  |  | 1  |  |  |  | 1   | 
|Oil Products                            |  |           | 75  |      |  |      | 58 |      |  |      | 58 |  |  |  | 57 |  |  |  | 58  | 
|Chemicals                               |  |           | 9   |      |  |      | 9  |      |  |      | 14 |  |  |  | 18 |  |  |  | 20  | 
|Corporate and Other                     |  |           | 8   |      |  |      | 7  |      |  |      | 8  |  |  |  | 9  |  |  |  | 7   | 
|                                        |  |           |     |      |  |      |    |      |  |      |    |  |  |  |    |  |  |  |     | 
|                                        |  |           | 111 |      |  |      | 90 |      |  |      | 95 |  |  |  | 99 |  |  |  | 102 | 
|                                        |  |           |     |      |  |      |    |      |  |      |    |  |  |  |    |  |  |  |     | 

|                                                  |  |           |     |      |  |      |    |      |  |      |    |  |  |  |    |  |  |  |     | 
|------------------------------------------------- |  | --------- | --- | ---- |  | ---- | -- | ---- |  | ---- | -- |  |  |  | -- |  |  |  | --- | 
|Employees
by geographical area (average numbers)a |  | thousands
|                                                  |  | 2002      |     | 2001 |  | 2000 |    | 1999 |  | 1998
|                                                  |  |           |     |      |  |      |    |      |  |     
|Europe
Netherlands                                |  |           | 11  |      |  |      | 10 |      |  |      | 10 |  |  |  | 9  |  |  |  | 9   | 
|UK                                                |  |           | 9   |      |  |      | 10 |      |  |      | 10 |  |  |  | 11 |  |  |  | 12  | 
|Others                                            |  |           | 26  |      |  |      | 18 |      |  |      | 21 |  |  |  | 22 |  |  |  | 20  | 
|                                                  |  |           |     |      |  |      |    |      |  |      |    |  |  |  |    |  |  |  |     | 
|                                                  |  |           | 46  |      |  |      | 38 |      |  |      | 41 |  |  |  | 42 |  |  |  | 41  | 
|Other Eastern Hemisphere                          |  |           | 27  |      |  |      | 24 |      |  |      | 24 |  |  |  | 25 |  |  |  | 27  | 
|USA                                               |  |           | 23  |      |  |      | 12 |      |  |      | 14 |  |  |  | 15 |  |  |  | 17  | 
|Other Western Hemisphere                          |  |           | 15  |      |  |      | 16 |      |  |      | 16 |  |  |  | 17 |  |  |  | 17  | 
|                                                  |  |           |     |      |  |      |    |      |  |      |    |  |  |  |    |  |  |  |     | 
|                                                  |  |           | 111 |      |  |      | 90 |      |  |      | 95 |  |  |  | 99 |  |  |  | 102 | 
|                                                  |  |           |     |      |  |      |    |      |  |      |    |  |  |  |    |  |  |  |     | 

|                                       |  |           |     |      |  |      |    |      |  |      |    |  |  |  |    |  |  |  |     | 
|-------------------------------------- |  | --------- | --- | ---- |  | ---- | -- | ---- |  | ---- | -- |  |  |  | -- |  |  |  | --- | 
|Employees by segment (at December 31)a |  | thousands
|                                       |  | 2002      |     | 2001 |  | 2000 |    | 1999 |  | 1998
|                                       |  |           |     |      |  |      |    |      |  |     
|Exploration and Production             |  |           | 17  |      |  |      | 15 |      |  |      | 13 |  |  |  | 13 |  |  |  | 15  | 
|Gas & Power                            |  |           | 2   |      |  |      | 2  |      |  |      | 2  |  |  |  | 1  |  |  |  | 1   | 
|Oil Products                           |  |           | 80  |      |  |      | 58 |      |  |      | 58 |  |  |  | 56 |  |  |  | 58  | 
|Chemicals                              |  |           | 9   |      |  |      | 9  |      |  |      | 10 |  |  |  | 17 |  |  |  | 20  | 
|Corporate and Other                    |  |           | 8   |      |  |      | 7  |      |  |      | 7  |  |  |  | 9  |  |  |  | 8   | 
|                                       |  |           |     |      |  |      |    |      |  |      |    |  |  |  |    |  |  |  |     | 
|                                       |  |           | 116 |      |  |      | 91 |      |  |      | 90 |  |  |  | 96 |  |  |  | 102 | 
|                                       |  |           |     |      |  |      |    |      |  |      |    |  |  |  |    |  |  |  |     | 

|                                 |  |           |       |      |  |      |       |      |  |      |       |   |  |  |       |   |  |  |       | 
|-------------------------------- |  | --------- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | - |  |  | ----- | 
|Employee emoluments              |  | $ million
|                                 |  | 2002      |       | 2001 |  | 2000 |       | 1999 |  | 1998
|                                 |  |           |       |      |  |      |       |      |  |     
|Remuneration                     |  |           | 6,096 |      |  |      | 4,651 |      |  |      | 4,560 |   |  |  | 4,980 |   |  |  | 5,260 | 
|Social law taxes                 |  |           | 518   |      |  |      | 395   |      |  |      | 390   |   |  |  | 467   |   |  |  | 476   | 
|Pensions and similar obligations |  |           | (201  | )    |  |      | (580  | )    |  |      | (577  | ) |  |  | (10   | ) |  |  | 245   | 
|                                 |  |           |       |      |  |      |       |      |  |      |       |   |  |  |       |   |  |  |       | 
|                                 |  |           | 6,413 |      |  |      | 4,466 |      |  |      | 4,373 |   |  |  | 5,437 |   |  |  | 5,981 | 
|                                 |  |           |       |      |  |      |       |      |  |      |       |   |  |  |       |   |  |  |       | 



---

|a |  | Excludes employees of associated companies
such as those in Brunei, Germany, Oman and
USA. Includes 50% of the employees of Shell
Expro in the UK and of NAM in the Netherlands
and 30% of Shell Petroleum Development
Nigeria.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Royal Dutch/Shell Group of Companies  Business and Property     35



---



##### Table of Contents






Selected Financial Data




|                                          |  |                           |       |      |  |      |       |      |  |       |       |  |  |  |       |  |  |  |       | 
|----------------------------------------- |  | ------------------------- | ----- | ---- |  | ---- | ----- | ---- |  | ----- | ----- |  |  |  | ----- |  |  |  | ----- | 
|Royal Dutch                               |  | per
0.56 ordinary
sharea
|                                          |  | 2002                      |       | 2001 |  | 2000 |       | 1999 |  | 1998b
|                                          |  |                           |       |      |  |      |       |      |  |      
|Net assets                              |  |                           | 17.49 |      |  |      | 19.54 |      |  |       | 18.50 |  |  |  | 15.91 |  |  |  | 13.47 | 
|Total assets                            |  |                           | 18.50 |      |  |      | 20.52 |      |  |       | 19.42 |  |  |  | 16.77 |  |  |  | 14.31 | 
|Profit after taxation  c                |  |                           | 2.87  |      |  |      | 3.44  |      |  |       | 3.86  |  |  |  | 2.27  |  |  |  | 0.12  | 
|Dividends declared                      |  |                           | 1.72  | d    |  |      | 1.66  |      |  |       | 1.59  |  |  |  | 1.51  |  |  |  | 1.45  | 
|Dividends  equivalent
payment in dollars |  |                           | e     |      |  |      | 1.50  |      |  |       | 1.40  |  |  |  | 1.47  |  |  |  | 1.60  | 



---

|a |  | Following the redenomination from guilders into euros in May 2002,
the authorised share capital of Royal Dutch as set forth in its Articles
of Association consists of 3,198,800,000 ordinary shares, par value
0.56 each, and 1,500 priority shares, par value 448 each. The number
of ordinary shares and priority shares issued and paid up at the end of
2000, 1999 and 1998 were 2,144,296,352 ordinary shares and 1,500
priority shares, at the end of 2001 were 2,126,647,800 ordinary shares
and 1,500 priority shares, and at the end of 2002 were 2,099,285,000
ordinary shares and 1,500 priority shares. The issued and paid-up share
capital at the end of 2000, 1999 and 1998 was
1,216,979,748b, at the
end of 2001 was
1,206,969,043b and at the end of 2002 was
1,176,271,600.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|b |  | The euro figures are translated from the guilder amounts at the fixed
conversion rate of 2.20371.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| 
|c |  | The calculation of per share data includes shares held to back share options
(refer to Note 22 of the Group Financial Statements on pages G25 to G27).
There is no difference between basic and diluted earnings per share.
Calculations are based on a weighted average of 2,092,718,616 shares
in issue during the year 2002 (2001: 2,119,873,567; 2000, 1999 and
1998 on 2,144,296,352 shares in issue). For this purpose shares
repurchased under the buyback programme are deemed to have been
cancelled on purchase date.                                                                                                                                                                                                                                                                     
| 
|d |  | Figure includes proposed final dividend of 1.00 per 0.56 ordinary
share, subject to finalisation by the General Meeting of Shareholders to
be held on April 23, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| 
|e |  | The 2002 final dividend in dollars will be determined by the dollar/euro
exchange rate ruling on April 28, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    




|                                       |  |                         |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|-------------------------------------- |  | ----------------------- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- |  |  |  | ----- |  |  |  | ----- | 
|Shell Transport                        |  | per 25p
Ordinary sharea
|                                       |  | 2002                    |       | 2001 |  | 2000 |       | 1999 |  | 1998
|Net assets  pence                     |  |                         | 166.3 |      |  |      | 173.5 |      |  |      | 166.0 |  |  |  | 142.4 |  |  |  | 135.0 | 
|Total assets  pence                   |  |                         | 175.7 |      |  |      | 182.6 |      |  |      | 175.0 |  |  |  | 151.1 |  |  |  | 144.0 | 
|Adjusted Earnings
(pro forma)  penceb |  |                         | 25.9  |      |  |      | 30.7  |      |  |      | 33.8  |  |  |  | 21.4  |  |  |  | 0.5   | 
|Dividends declared  pence             |  |                         | 15.25 | c    |  |      | 14.8  |      |  |      | 14.6  |  |  |  | 14.0  |  |  |  | 13.5  | 



---

|a |  | The authorised share capital of Shell Transport as set forth in its
Memorandum of Association consists of £2,500,000,000 divided into
9,948,000,000 Ordinary shares of 25 pence each and 3,000,000 First
Preference shares of £1 each and £10,000,000 Second Preference shares
of £1 each.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|  |  | The number of issued and paid up Ordinary shares, First Preference shares
and Second Preference shares of Shell Transport at the end of 19982002
inclusive was:                                                                                                                          

|                  |  |      |               |      |  |                         |               |  |  |  |               | 
|----------------- |  | ---- | ------------- | ---- |  | ----------------------- | ------------- |  |  |  | ------------- | 
|                  |  |      |               |      |  | Number of issued shares
|                  |  | 2002 |               | 2001 |  | 1998-2000              
|                  |  |      |               |      |  |                        
|Ordinary share    |  |      | 9,667,500,000 |      |  |                         | 9,748,625,000 |  |  |  | 9,943,509,726 | 
|First Preference  |  |      | 2,000,000     |      |  |                         | 2,000,000     |  |  |  | 2,000,000     | 
|Second Preference |  |      | 10,000,000    |      |  |                         | 10,000,000    |  |  |  | 10,000,000    | 



| |  | The amount of issued and paid up share
capital of Shell Transport at the end of
19982002 inclusive was:
| |  | --------------------------------------------------------------------------------------------------------

| |  |      |               |      |  |                            |               |  |  |  |               | 
| |  | ---- | ------------- | ---- |  | -------------------------- | ------------- |  |  |  | ------------- | 
| |  |      |               |      |  | Issued and paid up capital
| |  | 2002 |               | 2001 |  | 1998-2000                 
| |  |      |               |      |  |                           
| |  |      | 2,428,875,000 |      |  |                            | 2,449,156,280 |  |  |  | 2,497,877,432 | 



|b |  | Adjusted earnings includes Shell Transports share of earnings retained by
companies of the Royal Dutch/Shell Group. A reconciliation between this
Adjusted earnings per share measure and Shell Transports basic earnings
per share is provided on page S2. The calculation of per share data
includes shares held to back share options (refer to Note 22 of the Group
Financial Statements on pages G25 to G27). There is no difference between
basic and diluted earnings per share. Calculations are based on a
weighted average of 9,708,889,499 shares in issue during the year 2002
(2001: 9,832,071,191, 2000 and 1999: on 9,943,509,726 shares in issue).
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|c |  | Includes proposed final dividend of 9.30p per 25p Ordinary share, which
is subject to approval at the Annual General Meeting of Shell Transport
on April 23, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

|                                                          |  |                     |   |      |  |      |      |      |  |      |      |  |  |  |      |  |  |  |      | 
|--------------------------------------------------------- |  | ------------------- | - | ---- |  | ---- | ---- | ---- |  | ---- | ---- |  |  |  | ---- |  |  |  | ---- | 
|Shell Transport                                           |  | per New York Sharea
|                                                          |  | 2002                |   | 2001 |  | 2000 |      | 1999 |  | 1998
|                                                          |  |                     |   |      |  |      |      |      |  |     
|Dividends and tax credits 
equivalent payment in dollars |  |                     | b |      |  |      | 1.29 |      |  |      | 1.24 |  |  |  | 1.31 |  |  |  | 1.33 | 



---

|a |  | One New York Share or American Depositary Receipt (ADR) = six 25p
Ordinary shares.
|- |  | ----------------------------------------------------------------------------------
| 
|b |  | Not available at time of printing.                                                

Under the provisions of the UK/USA Double
Taxation Conventions, US resident holders of
American Depositary Receipts (New York
Shares) receive a tax credit (currently 10/90
of the net dividend) concurrently with their
dividend  less a deduction for UK
withholding tax at 15% or the value of the
tax credit, whichever is the lower. The tax
credit was 1/4 of the net dividend for
dividends paid in years prior to 1999. US
portfolio shareholders are subject to tax on
the gross dividend (net dividend plus tax
credit) with credit for the UK withholding
tax. The dividends paid in 1998 (1997 final
and 1998 interim) were foreign income
dividends and, as such, carried no tax credit
and were not subject to withholding tax.

The payment of future dividends on shares of
Royal Dutch and Shell Transport will depend
upon the Groups earnings, financial
condition (including its cash needs), future
earnings prospects and other factors.
Additional information on dividends is given
under Royal Dutch Petroleum Company
 Articles of Association (page 60) and The
Shell Transport and Trading Company, Public
Limited Company  Memorandum and Articles
of Association (page 69).

36     Royal Dutch/Shell Group of Companies



---



##### Table of Contents






Discussion and Analysis of Financial Condition and Results of Operations




Royal Dutch Petroleum Company

Translated into euros, Royal Dutchs share in the net income of the Royal
Dutch/Shell Group of Companies for the years 2002, 2001 and 2000 respectively
amounts to 5,989 million, 7,265 million and 8,272 million. The dividends
distributed from Group companies to Royal Dutch for the years 2002, 2001 and
2000 were respectively 3,317 million (including dividends yet to be
distributed), 6,148 million and 5,694 million. When interest income has been
added and administrative expenses deducted, after-tax net income for the year
2002 amounted to 6,004 million compared with 7,282 million for 2001 and
8,285 million for 2000.

Royal Dutchs 60% interest in the Group net assets, expressed in dollars, has
been translated into a euro amount at the year-end rate ($1= 0.9556 at
December 31, 2002). The amount thus obtained, which appears in the Balance
Sheet on page R2, should be regarded as a reflection of the dollar value of
Royal Dutchs interest in the Groups assets and liabilities. Consequently,
changes in the dollar/euro rate lead to translation effects in the Royal Dutch
Financial Statements. The movements in the value of the dollar, between $1=
1.1302 at December 31, 2001 and $1= 0.9556 at December 31, 2002, led to a
negative translation effect of 6,218 million, compared with a positive
translation effect of 1,958 million in 2001. These effects are dealt with
separately from the Translation effect arising from movements in dollar/euro
rate, as shown in Note 4 on pages R3 and R4. The translation effects are dealt
with in the Balance Sheet items Investments in companies of the Royal
Dutch/Shell Group and Investment reserves.

The final dividend for 2002 proposed by the Supervisory Board and the Board of
Management is 1.00 on each of the ordinary shares of 0.56 outstanding at
December 31, 2002 (excluding the shares acquired and held by the Company in its
own capital). Subject to adoption of this proposal by the General Meeting of
Shareholders to be held on April 23, 2003, payment of the final dividend will
result in a total dividend for 2002 of 1.72 on each of the said shares
(compared with 1.66 and 1.59 per ordinary share for the years 2001 and 2000,
respectively).

Euro reporting

With effect from 1999 euro reporting has been adopted instead of guilder
reporting for the Financial Statements of Royal Dutch. Comparative data
previously reported in guilders have been translated into euro amounts using
the fixed conversion rate of 2.20371 guilders per euro. However, the Financial
Statements of the Royal Dutch/Shell Group of Companies will continue to be
stated in dollars.

Share buyback and cancellation of shares

The General Meeting of Shareholders held on May 16, 2002, adopted a proposal to
reduce the Companys issued share capital with
15,323,168 by cancellation of 27,362,800 ordinary shares which the Company had
acquired between the General Meeting of May 17, 2001 and the General Meeting
held on May 16, 2002 under the share buyback programme that took effect in
February 2001. This cancellation effectively took place on August 21, 2002.

The General Meeting of Shareholders further renewed the authorisation of the
Board of Management, with effect from July 1, 2002, and for a period of 18
months, for the acquisition by the Company, with due observance of the
statutory provisions and for its own account, of shares in its capital up to a
maximum of 10% of the issued capital. Such shares can be acquired on the stock
exchange or otherwise at a price between an amount equal to the par value of
the shares and an amount equal to 110% of the opening price quoted for shares
of the Company at Euronext Amsterdam on the day of the acquisition or, in
absence of such a price, the last previous price quoted there.

In 2002 the Company repurchased a total of 17,935,000 shares.

It will be proposed to the General Meeting of Shareholders to be held on April
23, 2003, to cancel the shares acquired by the
Company in the period between the General Meetings in 2002 and 2003 and to
renew the authorisation of the Board of Management for the acquisition by the
Company of its own shares for a period of 18 months with effect from July 1,
2003.

Since the beginning of the programme until March 3, 2003 a total number of
60,796,352 ordinary shares has been acquired by the Company, of which so far
45,011,352 shares have been cancelled.

Since the year end the Company has not purchased any shares on the market as at
March 3, 2003.

Discussion and Analysis of Financial Condition and Results of Operations     37



---



##### Table of Contents






The Shell Transport and
Trading Company, Public Limited Company

Shell Transports earnings for the year 2002 amounted to £2,509.3 million
(£3,016.3 million in 2001; £3,360.9 million in 2000). The amount available for
distribution (inclusive of distributions from companies of the Royal
Dutch/Shell Group) was £1,404.0 million in 2002 (£2,547.3 million in 2001;
£2,308.3 million in 2000).

Shell Transports net assets at December 31, 2002 were £16,073.9 million, in
comparison with £16,914.4 million at the end of 2001. Of these two amounts,
£15,632.3 million and £16,032.2 million respectively represented Shell
Transports share in the net assets of companies of the Royal Dutch/Shell
Group.

A final dividend of 9.3p per 25p Ordinary share has been declared for 2002.
Subject to its approval at the Annual General Meeting to be held on April 23,
2003, dividends totalling 15.25p per 25p Ordinary share are payable in respect
of 2002, in comparison with dividends paid of 14.8p and 14.6p for 2001 and
2000, respectively.

Share buyback

Since December 31, 2002 the Company had, under the Share buyback programme,
purchased no Ordinary shares on the market as at March 3, 2003. Shares
purchased under the buyback programme will be cancelled and will not rank for
dividends, but any shares purchased on or after April 2, 2003 will be entitled
to the dividend payable on May 6, 2003.

38     Discussion and Analysis of Financial Condition and Results of Operations



---



##### Table of Contents






Royal Dutch/Shell Group of Companies

Summarised Financial Data

|                                                               |  |           |         |      |  |      |         |      |  |      |         |   |  |  |         |   |  |           |         |  
|-------------------------------------------------------------- |  | --------- | ------- | ---- |  | ---- | ------- | ---- |  | ---- | ------- | - |  |  | ------- | - |  | --------- | ------- | -
|Income data                                                    |  | $ million
|                                                               |  | 2002      |         | 2001 |  | 2000 |         | 1999 |  | 1998
|                                                               |  |           |         |      |  |      |         |      |  |     
|Sales proceeds                                                 |  |           |         |      |  |      |         |      |  |      |         |   |  |  |         |   |  |           |         |  
|Oil and gas                                                    |  |           | 220,172 |      |  |      | 162,925 |      |  |      | 175,372 |   |  |  | 135,472 |   |  |           | 124,712 |  
|Chemicals                                                      |  |           | 14,659  |      |  |      | 13,767  |      |  |      | 15,658  |   |  |  | 13,408  |   |  |           | 12,795  |  
|Other                                                          |  |           | 767     |      |  |      | 589     |      |  |      | 481     |   |  |  | 826     |   |  |           | 767     |  
|                                                               |  |           |         |      |  |      |         |      |  |      |         |   |  |  |         |   |  |           |         |  
|Gross proceeds                                                 |  |           | 235,598 |      |  |      | 177,281 |      |  |      | 191,511 |   |  |  | 149,706 |   |  |           | 138,274 |  
|Sales taxes, excise duties and similar levies                  |  |           | 56,167  |      |  |      | 42,070  |      |  |      | 42,365  |   |  |  | 44,340  |   |  |           | 44,582  |  
|                                                               |  |           |         |      |  |      |         |      |  |      |         |   |  |  |         |   |  |           |         |  
|Net proceeds                                                   |  |           | 179,431 |      |  |      | 135,211 |      |  |      | 149,146 |   |  |  | 105,366 |   |  |           | 93,692  |  
|                                                               |  |           |         |      |  |      |         |      |  |      |         |   |  |  |         |   |  |           |         |  
|Earnings by industry segment                                   |  |           |         |      |  |      |         |      |  |      |         |   |  |  |         |   |  |           |         |  
|Exploration and Production                                     |  |           | 6,997   |      |  |      | 8,023   |      |  |      | 10,059  |   |  |  | 4,753   |   |  |           | (60     | )
|Gas & Power                                                    |  |           | 774     |      |  |      | 1,226   |      |  |      | 112     |   |  |  | 398     |   |  |           | (155    | )
|Oil Products                                                   |  |           | 1,618   |      |  |      | 3,067   |      |  |      | 2,068   |   |  |  | 2,105   |   |  |           | 2,675   |  
|Chemicals                                                      |  |           | 489     |      |  |      | 230     |      |  |      | 992     |   |  |  | 1,064   |   |  |           | (525    | )
|Other industry segments                                        |  |           | (110    | )    |  |      | (287    | )    |  |      | (12     | ) |  |  | (28     | ) |  |           | (46     | )
|                                                               |  |           |         |      |  |      |         |      |  |      |         |   |  |  |         |   |  |           |         |  
|Total operating segments                                       |  |           | 9,768   |      |  |      | 12,259  |      |  |      | 13,219  |   |  |  | 8,292   |   |  |           | 1,889   |  
|Corporate                                                      |  |           | (751    | )    |  |      | (320    | )    |  |      | (825    | ) |  |  | (538    | ) |  |           | (810    | )
|Minority interests                                             |  |           | (95     | )    |  |      | (387    | )    |  |      | (30     | ) |  |  | (193    | ) |  |           | (178    | )
|                                                               |  |           |         |      |  |      |         |      |  |      |         |   |  |  |         |   |  |           |         |  
|Earnings on an estimated current cost of supplies (CCS) basisa |  |           | 8,922   |      |  |      | 11,552  |      |  |      | 12,364  |   |  |  | 7,561   |   |  |           | 901     |  
|CCS adjustment                                                 |  |           | 497     |      |  |      | (700    | )    |  |      | 355     |   |  |  | 1,023   |   |  |           | (551    | )
|                                                               |  |           |         |      |  |      |         |      |  |      |         |   |  |  |         |   |  |           |         |  
|Net income                                                     |  |           | 9,419   |      |  |      | 10,852  |      |  |      | 12,719  |   |  |  | 8,584   |   |  |           | 350     |  
|                                                               |  |           |         |      |  |      |         |      |  |      |         |   |  |  |         |   |  |           |         |  
|Assets and liabilities data(at December 31)                    |  |           |         |      |  |      |         |      |  |      |         |   |  |  |         |   |  | $ million
|Total fixed and other long-term assets                         |  |           | 112,145 |      |  |      | 81,065  |      |  |      | 76,568  |   |  |  | 83,491  |   |  |           | 87,469  |  
|Net current assets/(liabilities)                               |  |           | (14,569 | )    |  |      | (2,989  | )    |  |      | 3,232   |   |  |  | (3,071  | ) |  |           | (8,541  | )
|Total debt                                                     |  |           | 19,691  |      |  |      | 5,820   |      |  |      | 7,427   |   |  |  | 12,931  |   |  |           | 13,810  |  
|Parent Companies interest in Group net assets                 |  |           | 60,064  |      |  |      | 56,160  |      |  |      | 57,086  |   |  |  | 56,171  |   |  |           | 54,962  |  
|Minority interests                                             |  |           | 3,562   |      |  |      | 3,477   |      |  |      | 2,881   |   |  |  | 2,842   |   |  |           | 2,701   |  
|                                                               |  |           |         |      |  |      |         |      |  |      |         |   |  |  |         |   |  |           |         |  
|Capital employed                                               |  |           | 83,317  |      |  |      | 65,457  |      |  |      | 67,394  |   |  |  | 71,944  |   |  |           | 71,473  |  
|                                                               |  |           |         |      |  |      |         |      |  |      |         |   |  |  |         |   |  |           |         |  
|Cash flow data                                                 |  |           |         |      |  |      |         |      |  |      |         |   |  |  |         |   |  | $ million
|Cash flow provided by operating activities                     |  |           | 16,365  |      |  |      | 16,933  |      |  |      | 18,359  |   |  |  | 11,059  |   |  |           | 14,729  |  
|Capital expenditure (including acquisitions)                   |  |           | 21,109  |      |  |      | 9,626   |      |  |      | 6,209   |   |  |  | 7,409   |   |  |           | 12,859  |  
|Cash flow used in investing activities                         |  |           | 20,715  |      |  |      | 9,108   |      |  |      | 1,571   |   |  |  | 3,023   |   |  |           | 12,500  |  
|Dividends paid                                                 |  |           | 7,189   |      |  |      | 9,627   |      |  |      | 5,501   |   |  |  | 5,611   |   |  |           | 5,993   |  
|Cash flow used in financing activities                         |  |           | 53      |      |  |      | 11,562  |      |  |      | 9,125   |   |  |  | 6,256   |   |  |           | 3,582   |  
|Increase/(decrease) in cash and cash equivalents               |  |           | (5,114  | )    |  |      | (4,761  | )    |  |      | 7,388   |   |  |  | 1,326   |   |  |           | (1,589  | )
|                                                               |  |           |         |      |  |      |         |      |  |      |         |   |  |  |         |   |  |           |         |  
|Other statistics                                               |  |           |         |      |  |      |         |      |  |      |         |   |  |  |         |   |  |           |         |  
|Return on average capital employedb                            |  |           | 14.0    | %    |  |      | 19.2    | %    |  |      | 19.5    | % |  |  | 12.1    | % |  |           | 2.8     | %
|Total debt ratioc                                              |  |           | 23.6    | %    |  |      | 8.9     | %    |  |      | 11.0    | % |  |  | 18.0    | % |  |           | 19.3    | %



---

|a |  | On this basis, cost of sales of the volumes sold in the period is based on the cost of supplies of the same period (instead of using the first-in first-out (FIFO) method of inventory
accounting used by most Group companies) and allowance is made for
the estimated tax effect. These earnings are more comparable with those of companies using the last-in first-out (LIFO) inventory basis after excluding any inventory drawdown effects.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|b |  | CCS earnings plus the Group share of interest expense, less tax on the interest expense, as a percentage of the Group share of average capital employed.                                                                                                                                                                                                                                                                                         
| 
|c |  | Total debt as a percentage of capital employed.                                                                                                                                                                                                                                                                                                                                                                                                  

Discussion and Analysis of Financial Condition and Results of Operations     39



---



##### Table of Contents



|                                                                                            |                                   |           |        |        |      |  |        |       |      |  |       |       |  |  |       |       |  |  |        |       | 
|------------------------------------------------------------------------------------------- | --------------------------------- | --------- | ------ | ------ | ---- |  | ------ | ----- | ---- |  | ----- | ----- |  |  | ----- | ----- |  |  | ------ | ----- | 
|Capital investment                                                                          |                                   | $ million
|                                                                                            |                                   |           | 2002   |        | 2001 |  | 2000   |       | 1999 |  | 1998 
|                                                                                            |                                   |           |        |        |      |  |        |       |      |  |      
|Capital
expenditurea                                                                        |                                   |           |        |        |      |  |        |       |      |  |       |       |  |  |       |       |  |  |        |      
|                                                                                            | Exploration and Production        |           |        | 13,146 |      |  |        | 6,875 |      |  |       | 3,801 |  |  |       | 4,137 |  |  |        | 6,474 | 
|                                                                                            | Gas & Power                       |           |        | 471    |      |  |        | 313   |      |  |       | 288   |  |  |       | 470   |  |  |        | 1,816 | 
|                                                                                            | Oil Products                      |           |        | 7,653  |      |  |        | 1,462 |      |  |       | 1,258 |  |  |       | 1,338 |  |  |        | 2,776 | 
|                                                                                            | Chemicals                         |           |        | 680    |      |  |        | 685   |      |  |       | 726   |  |  |       | 1,178 |  |  |        | 1,491 | 
|                                                                                            | Other                             |           |        | 494    |      |  |        | 291   |      |  |       | 136   |  |  |       | 286   |  |  |        | 302   | 
|                                                                                            |                                   |           |        |        |      |  |        |       |      |  |       |       |  |  |       |       |  |  |        |      
|                                                                                            |                                   |           | 22,444 |        |      |  | 9,626  |       |      |  | 6,209 |       |  |  | 7,409 |       |  |  | 12,859 |      
|Exploration expense(excluding depreciation and
release of currency translation differences) |                                   |           | 915    |        |      |  | 857    |       |      |  | 753   |       |  |  | 1,062 |       |  |  | 1,595  |      
|New equity investments in associated companies                                              |                                   |           | 684    |        |      |  | 704    |       |      |  | 605   |       |  |  | 630   |       |  |  | 871    |      
|New loans to associated companies                                                           |                                   |           | 605    |        |      |  | 370    |       |      |  | 556   |       |  |  | 394   |       |  |  | 411    |      
|Other investments                                                                           |                                   |           |       |        |      |  | 224    |       |      |  | 414   |       |  |  |      |       |  |  |       |      
|                                                                                            |                                   |           |        |        |      |  |        |       |      |  |       |       |  |  |       |       |  |  |        |      
|Total capital investment*                                                                   |                                   |           | 24,648 |        |      |  | 11,781 |       |      |  | 8,537 |       |  |  | 9,495 |       |  |  | 15,736 |      
|                                                                                            |                                   |           |        |        |      |  |        |       |      |  |       |       |  |  |       |       |  |  |        |      
|*comprising                                                                                 |                                   |           |        |        |      |  |        |       |      |  |       |       |  |  |       |       |  |  |        |      
|                                                                                            | Exploration and Production        |           |        | 14,082 |      |  |        | 8,000 |      |  |       | 4,839 |  |  |       | 5,390 |  |  |        | 8,316 | 
|                                                                                            | Gas & Power                       |           |        | 682    |      |  |        | 810   |      |  |       | 483   |  |  |       | 675   |  |  |        | 1,986 | 
|                                                                                            | Oil Products                      |           |        | 7,945  |      |  |        | 1,518 |      |  |       | 1,565 |  |  |       | 1,356 |  |  |        | 2,843 | 
|                                                                                            | Chemicals                         |           |        | 839    |      |  |        | 751   |      |  |       | 941   |  |  |       | 1,384 |  |  |        | 1,869 | 
|                                                                                            | Other segments                    |           |        | 495    |      |  |        | 332   |      |  |       | 153   |  |  |       | 296   |  |  |        | 311   | 
|                                                                                            | New loans to associated companies |           |        | 605    |      |  |        | 370   |      |  |       | 556   |  |  |       | 394   |  |  |        | 411   | 
|                                                                                            |                                   |           |        |        |      |  |        |       |      |  |       |       |  |  |       |       |  |  |        |      
|                                                                                            |                                   |           | 24,648 |        |      |  | 11,781 |       |      |  | 8,537 |       |  |  | 9,495 |       |  |  | 15,736 |      
|                                                                                            |                                   |           |        |        |      |  |        |       |      |  |       |       |  |  |       |       |  |  |        |      

|                                                         |  |           |        |         |  |         |        |         |  |         |        |         |  |         |        |         |  |         |        |         |  |         |        |         |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|-------------------------------------------------------- |  | --------- | ------ | ------- |  | ------- | ------ | ------- |  | ------- | ------ | ------- |  | ------- | ------ | ------- |  | ------- | ------ | ------- |  | ------- | ------ | ------- |  |  | ------ |  |  |  | ------ |  |  |  | ------ |  |  |  | ------ |  |  |  | ------ |  |  |  | ------ | 
|Quarterly income data                                    |  | $ million
|                                                         |  | 2002      |        | 2001    |  | 2000   
|                                                         |  |           |        |         |  |        
|                                                         |  | 4th       |        | 3rd     |  | 2nd     |        | 1st     |  | 4th     |        | 3rd     |  | 2nd     |        | 1st     |  | 4th     |        | 3rd     |  | 2nd     |        | 1st    
|                                                         |  | Quarter   |        | Quarter |  | Quarter |        | Quarter |  | Quarter |        | Quarter |  | Quarter |        | Quarter |  | Quarter |        | Quarter |  | Quarter |        | Quarter
|                                                         |  |           |        |         |  |         |        |         |  |         |        |         |  |         |        |         |  |         |        |         |  |         |        |        
|Gross proceeds                                           |  |           | 64,317 |         |  |         | 63,401 |         |  |         | 57,611 |         |  |         | 50,269 |         |  |         | 40,394 |         |  |         | 43,079 |         |  |  | 45,981 |  |  |  | 47,827 |  |  |  | 50,811 |  |  |  | 49,478 |  |  |  | 46,042 |  |  |  | 45,180 | 
|less sales taxes,
excise duties
and similar levies       |  |           | 15,734 |         |  |         | 14,518 |         |  |         | 13,221 |         |  |         | 12,694 |         |  |         | 10,669 |         |  |         | 10,430 |         |  |  | 10,171 |  |  |  | 10,800 |  |  |  | 10,538 |  |  |  | 10,802 |  |  |  | 10,111 |  |  |  | 10,914 | 
|Net proceeds                                             |  |           | 48,583 |         |  |         | 48,883 |         |  |         | 44,390 |         |  |         | 37,575 |         |  |         | 29,725 |         |  |         | 32,649 |         |  |  | 35,810 |  |  |  | 37,027 |  |  |  | 40,273 |  |  |  | 38,676 |  |  |  | 35,931 |  |  |  | 34,266 | 
|Cost of sales                                            |  |           | 40,614 |         |  |         | 41,271 |         |  |         | 37,868 |         |  |         | 31,461 |         |  |         | 24,585 |         |  |         | 26,310 |         |  |  | 28,314 |  |  |  | 28,630 |  |  |  | 31,999 |  |  |  | 31,429 |  |  |  | 28,204 |  |  |  | 26,696 | 
|Gross profit                                             |  |           | 7,969  |         |  |         | 7,612  |         |  |         | 6,522  |         |  |         | 6,114  |         |  |         | 5,140  |         |  |         | 6,339  |         |  |  | 7,496  |  |  |  | 8,397  |  |  |  | 8,274  |  |  |  | 7,247  |  |  |  | 7,727  |  |  |  | 7,570  | 
|Operating profit                                         |  |           | 4,372  |         |  |         | 5,232  |         |  |         | 4,119  |         |  |         | 4,100  |         |  |         | 1,930  |         |  |         | 4,625  |         |  |  | 6,347  |  |  |  | 7,100  |  |  |  | 5,891  |  |  |  | 6,016  |  |  |  | 6,512  |  |  |  | 6,081  | 
|Net income                                               |  |           | 2,314  |         |  |         | 2,631  |         |  |         | 2,212  |         |  |         | 2,262  |         |  |         | 900    |         |  |         | 2,454  |         |  |  | 3,608  |  |  |  | 3,890  |  |  |  | 3,113  |  |  |  | 3,060  |  |  |  | 3,211  |  |  |  | 3,335  | 
|                                                         |  |           |        |         |  |         |        |         |  |         |        |         |  |         |        |         |  |         |        |         |  |         |        |         |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Earnings on
an estimated
current cost of
supplies basisb |  |           | 2,326  |         |  |         | 2,419  |         |  |         | 2,100  |         |  |         | 2,077  |         |  |         | 1,393  |         |  |         | 2,641  |         |  |  | 3,512  |  |  |  | 4,006  |  |  |  | 3,490  |  |  |  | 2,768  |  |  |  | 3,025  |  |  |  | 3,081  | 
|                                                         |  |           |        |         |  |         |        |         |  |         |        |         |  |         |        |         |  |         |        |         |  |         |        |         |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 



---

|a |  | Includes acquisitions. 2002 includes $1.3 billion for DEA (payable in July 2003).                                                                                                                                                                                                                                                                                                                                                                
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|b |  | On this basis, cost of sales of the volumes sold in the period is based on the cost of supplies of the same period (instead of using the first-in first-out (FIFO) method of inventory
accounting used by most Group companies) and allowance is made for
the estimated tax effect. These earnings are more comparable with those of companies using the last-in first-out (LIFO) inventory basis after excluding any inventory drawdown effects.

40     Discussion and Analysis of Financial Condition and Results of Operations



---



##### Table of Contents



|                          |       |           |         |      |  |     |  |            |        |        |  |  |        |        |  |  |  |  |        |  | 
|------------------------- | ----- | --------- | ------- | ---- |  | --- |  | ---------- | ------ | ------ |  |  | ------ | ------ |  |  |  |  | ------ |  | 
|US dollar exchange ratesa |       | 1 = $   
|                          |       | Averageb  |         | High |  | Low |  | Period end
|                          |       |           |         |      |  |     |  |            |        |        |  |  |       
|Year:                     |       |           |         |      |  |     |  |            |        |        |  |  |        |        |  |  |  |  |        | 
|                          | 1997c |           |         |      |  |     |  | 0.8887     |        |        |  |  |        |        |  |  |  |  |        |  | 
|                          | 1998c |           |         |      |  |     |  | 0.8996     |        |        |  |  |        |        |  |  |  |  |        |  | 
|                          | 1999  |           |         |      |  |     |  | 1.0588     |        |        |  |  |        |        |  |  |  |  |        |  | 
|                          | 2000  |           |         |      |  |     |  | 0.9209     |        |        |  |  |        |        |  |  |  |  |        |  | 
|                          | 2001  |           |         |      |  |     |  | 0.8909     |        |        |  |  |        |        |  |  |  |  |        |  | 
|                          | 2002  |           |         |      |  |     |  | 0.9495     |        |        |  |  |        |        |  |  |  |  |        |  | 
|Month:                    |       |           |         |      |  |     |  |            |        |        |  |  |        |        |  |  |  |  |        | 
|                          | 2002  |           | July    |      |  |     |  |            |        | 1.0156 |  |  |        | 0.9730 |  |  |  |  |       
|                          |       | August    |         |      |  |     |  |            | 0.9882 |        |  |  | 0.9640 |        |  |  |  | 
|                          |       | September |         |      |  |     |  |            | 0.9959 |        |  |  | 0.9685 |        |  |  |  | 
|                          |       | October   |         |      |  |     |  |            | 0.9881 |        |  |  | 0.9708 |        |  |  |  | 
|                          |       | November  |         |      |  |     |  |            | 1.0139 |        |  |  | 0.9895 |        |  |  |  | 
|                          |       | December  |         |      |  |     |  |            | 1.0485 |        |  |  | 0.9927 |        |  |  |  | 
|                          | 2003  |           | January |      |  |     |  |            |        | 1.0861 |  |  |        | 1.0361 |  |  |  |  |       
|                          |       | February  |         |      |  |     |  |            | 1.0875 |        |  |  | 1.0708 |        |  |  |  | 
|As at March 3, 2003       |       |           |         |      |  |     |  |            |        |        |  |  |        |        |  |  |  |  | 1.0835 | 

|                    |      |           |         |  |  |  |          |        |        |        |     |  |            |        |  |  |  |  |        |  | 
|------------------- | ---- | --------- | ------- |  |  |  | -------- | ------ | ------ | ------ | --- |  | ---------- | ------ |  |  |  |  | ------ |  | 
|                    |      |           |         |  |  |  |          |        |        |        |     |  |            |        |  |  |  |  | £1 = $
|                    |      |           |         |  |  |  | Averageb |        | High   |        | Low |  | Period end
|                    |      |           |         |  |  |  |          |        |        |        |     |  |           
|Year:               |      |           |         |  |  |  |          |        |        |        |     |  |            |        |  |  |  |  |        | 
|                    | 1997 |           |         |  |  |  |          | 1.6397 |        |        |     |  |            |        |  |  |  |  |        |  | 
|                    | 1998 |           |         |  |  |  |          | 1.6602 |        |        |     |  |            |        |  |  |  |  |        |  | 
|                    | 1999 |           |         |  |  |  |          | 1.6146 |        |        |     |  |            |        |  |  |  |  |        |  | 
|                    | 2000 |           |         |  |  |  |          | 1.5138 |        |        |     |  |            |        |  |  |  |  |        |  | 
|                    | 2001 |           |         |  |  |  |          | 1.4382 |        |        |     |  |            |        |  |  |  |  |        |  | 
|                    | 2002 |           |         |  |  |  |          | 1.5084 |        |        |     |  |            |        |  |  |  |  |        |  | 
|Month:              |      |           |         |  |  |  |          |        |        |        |     |  |            |        |  |  |  |  |        | 
|                    | 2002 |           | July    |  |  |  |          |        |        | 1.5800 |     |  |            | 1.5206 |  |  |  |  |       
|                    |      | August    |         |  |  |  |          |        | 1.5709 |        |     |  | 1.5192     |        |  |  |  | 
|                    |      | September |         |  |  |  |          |        | 1.5700 |        |     |  | 1.5343     |        |  |  |  | 
|                    |      | October   |         |  |  |  |          |        | 1.5708 |        |     |  | 1.5418     |        |  |  |  | 
|                    |      | November  |         |  |  |  |          |        | 1.5915 |        |     |  | 1.5440     |        |  |  |  | 
|                    |      | December  |         |  |  |  |          |        | 1.6095 |        |     |  | 1.5555     |        |  |  |  | 
|                    | 2003 |           | January |  |  |  |          |        |        | 1.6482 |     |  |            | 1.5975 |  |  |  |  |       
|                    |      | February  |         |  |  |  |          |        | 1.6480 |        |     |  | 1.5727     |        |  |  |  | 
|As at March 3, 2003 |      |           |         |  |  |  |          |        |        |        |     |  |            |        |  |  |  |  | 1.5755 | 



---

|a |  | Exchange rates are based upon the noon buying rate in New York City for cable transfers in foreign
currencies as certified for customs purposes by the Federal Reserve Bank of New York.                         
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|b |  | Calculated by using the average of the exchange rates on the last business day of each month during
the year.                                                                                                    
| 
|c |  | The euro-to-dollar exchange rates prior to the fixing of the euro conversion rate in January 1999 are derived
from guilders-per-dollar exchange rates and the fixed guilders-per-euro conversion rate of 2.20371.

Discussion and Analysis of Financial Condition and Results of Operations     41



---



##### Table of Contents



Critical Accounting Policies

In order to prepare the Financial Statements in conformity with generally
accepted accounting principles in the Netherlands and the USA, management has
to make estimates and assumptions. The matters described below are considered
to be the most critical in understanding the judgments that are involved in
preparing the Financial Statements and the uncertainties that could impact the
amounts reported on the results of operations, financial condition and cash
flows. Accounting policies are described in Note 2 to the Financial Statements.

Estimation of oil and gas reserves

Oil and gas reserves have been estimated in accordance with industry standards
and SEC regulations. Proved oil and gas reserves are the estimated quantities
of crude oil, natural gas and natural gas liquids that geological and
engineering data demonstrate with reasonable certainty to be recoverable in
future years from known reservoirs under existing economic and operating
conditions. These estimates do not include probable or possible reserves.
Estimates of oil and gas reserves are inherently imprecise and represent only
approximate amounts and are subject to future revision, as they are based on
available reservoir data, prices and costs as of the date the estimate is made.
Accordingly, the financial measures that are based on proved reserves are also
subject to change.

Depreciation, depletion and amortisation

Proved reserves are used when calculating the unit-of-production rates used for
depreciation, depletion and amortisation for tangible fixed assets related to
hydrocarbon production activities. The amount of depreciation is based on the
units of production over the proved developed reserves of the relevant field
during the time period. Similarly, rights and concessions are depleted on the
unit-of-production basis over the total proved reserves of the relevant area.
Unproved properties are amortised as required by particular circumstances.
Other tangible fixed assets are generally depreciated on a straight-line basis
over their estimated useful lives (five to twenty years), while other
intangible fixed assets are amortised on a straight-line basis over their
estimated useful lives (with a maximum of forty years).

Recoverability of assets

The carrying amounts of fixed assets are reviewed for possible impairment
whenever events or changes in circumstances indicate that the carrying amounts
for those properties may not be recoverable. If assets are determined to be
impaired, the carrying amounts of those assets are written down to fair value.
For this purpose, assets are grouped based on separately identifiable and
largely independent cash flows. Estimates of future cash flows of assets
related to hydrocarbon production activities are based on proved reserves,
except in circumstances where it is probable that additional resources will be
developed and contribute to cash flows in the future.

Environmental expenditures

Liabilities for environmental remediation resulting from past operations or
events are recognised, based on current estimates, in the period in which an
obligation to a third party arises, as long as the obligations can be
reasonably estimated. Because actual costs can differ from estimates due to
changes in laws and regulations and clean-up technology as well as public
expectations and discovery and analysis of site conditions, the carrying amount
of liabilities is regularly reviewed and adjusted.

Decommissioning and restoration costs

Provisions are held for the future decommissioning and restoration of oil and
natural gas production facilities and pipelines at the end of their economic
lives. Estimated decommissioning and restoration costs are based on current
requirements, technology and price levels. Most of these obligations are many
years in the future and the precise requirements that will have to be met are
uncertain because technologies and costs as well as political, environmental,
and safety expectations are subject to change.

42     Discussion and Analysis of Financial Condition and Results of Operations



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##### Table of Contents



Summary of Group Results

|                                                              |  |           |       |      |  |      |        |   |  |  |        |  
|------------------------------------------------------------- |  | --------- | ----- | ---- |  | ---- | ------ | - |  |  | ------ | -
|Financial Results                                             |  | $ million
|                                                              |  | 2002      |       | 2001 |  | 2000
|Net income                                                    |  |           | 9,419 |      |  |      | 10,852 |   |  |  | 12,719 |  
|                                                              |  |           |       |      |  |      |        |   |  |  |        |  
|Change                                                        |  |           | -13   | %    |  |      | -15    | % |  |  | +48    | %
|Earnings on an estimated current
cost of supplies (CCS) basis |  |           | 8,922 |      |  |      | 11,552 |   |  |  | 12,364 |  
|                                                              |  |           |       |      |  |      |        |   |  |  |        |  
|Change                                                        |  |           | -23   | %    |  |      | -7     | % |  |  | +64    | %
|Special credits/(charges)                                     |  |           | (296  | )    |  |      | (432   | ) |  |  | (747   | )
|Adjusted
CCS earningsa                                        |  |           | 9,218 |      |  |      | 11,984 |   |  |  | 13,111 |  
|                                                              |  |           |       |      |  |      |        |   |  |  |        |  
|Change                                                        |  |           | -23   | %    |  |      | -9     | % |  |  | +85    | %
|                                                              |  |           |       |      |  |      |        |   |  |  |        |  



---

|a |  | Earnings on an estimated CCS basis excluding special items.
|- |  | -----------------------------------------------------------

2002

To facilitate a better understanding of the underlying business performance,
the financial results are analysed on an estimated current cost of supplies
(CCS) basis adjusting for special items, being those significant credits or
charges resulting from transactions or events which, in the view of management,
are not representative of normal business activities of the period and which
affect comparability of earnings. It should be noted that adjusted CCS earnings
is not a measure of financial performance under generally accepted accounting
principles in the Netherlands and the USA.

The Groups adjusted CCS earnings for the year were $9,218 million, showing a
23% decline on 2001. Despite a 6% increase in production volumes, earnings in
Exploration and Production were weakened by lower gas realisations, higher
depreciation and costs, as well as changes to the UK tax regime. Earnings were
substantially affected in Gas & Power by lower LNG prices and in Oil Products
by historically low refining margins and weaker marketing margins. Chemicals
earnings were sharply up reflecting improved volumes and margins, lower costs
and an incremental fiscal benefit of $37 million. The target of reducing
underlying unit costs by 3% was exceeded by $100 million, with total actual
savings of over $600 million. Reported net income fell by 13% to $9,419 million
including net special charges of $296 million.

Four major acquisitions were completed; Enterprise Oil (Enterprise) in the UK,
DEA Oil (DEA) in Germany, and in the USA Pennzoil-Quaker State and Texacos
interests in Equilon and Motiva. Total investment in these acquisitions,
including acquired debt, was over $16 billion. Excellent progress has been made
on realising the benefits of synergies, with approximately $370 million
delivered in 2002.

Total capital investment for the year amounted to $24.6 billion including
acquisitions. Excluding major acquisitions, capital investment totalled $14.2
billion. The return on average capital employed on a CCS earnings basis was
14.0%. At the end of the year, the debt ratio was 23.6% and cash, cash
equivalents and short-term securities amounted to $1.6 billion.

Hydrocarbon production was the highest in recent history at four million
barrels of oil equivalent per day. Brent crude prices averaged $25.05 a barrel
compared with $24.45 a barrel in 2001. Production constraints in some countries
led to a steady price increase in the first three quarters of the year. Prices
subsequently weakened only to rebound to $30 a barrel at the end of the year
when Venezuelan supply was disrupted. The crude price outlook for 2003 is
highly uncertain and prices are expected to be volatile and impacted by
developments in the Middle East and Venezuela.

In Gas & Power, the LNG business continued to grow delivering record volumes,
although lower prices led to a decline in earnings. Global demand for LNG
remained firm and expansion of existing projects and the securing of long-term
supply contracts, especially in Asia Pacific, will provide for future growth.

Industry refining margins over the year were poor, at their lowest for a
decade, while marketing margins were squeezed by rising crude prices. The
outlook for refining margins in 2003 is uncertain and dependent on crude supply
and the pace of global economic recovery. Integration of the Texaco interests
and Pennzoil-Quaker State is vital to realising the potential of Oil Products
in the USA.

Discussion and Analysis of Financial Condition and Results of Operations     43



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##### Table of Contents



Chemicals saw some signs of improvement in the business environment
but it was still a very
challenging year due to difficult trading conditions, particularly in the USA.
Industry utilisation remained flat in Europe but improved in the USA from
historically low levels in 2001. Cracker margins in both regions were down from
a year ago. The outlook for Chemicals is mixed and will depend on economic
recovery and improvement in consumer confidence levels.

2001

Earnings for 2001 of $11,984 million on an estimated current cost of supplies
basis excluding special items were the second highest ever, 9% lower than the
record results of 2000. Lower crude oil prices and weaker refining and
chemicals margins more than offset the benefits of increased hydrocarbon
production, better marketing margins and cost improvements. Reported net income
fell 15% to $10,852 million.

Lower costs made a substantial contribution to earnings, with cost improvements
of $5.1 billion (relative to a 1998 baseline) exceeding the Groups $5 billion
target. Cost improvements were achieved by all major businesses. Exploration
and Production delivered $2.1 billion, of which $0.7 billion resulted from
lower exploration expenses. Oil Products also contributed $2.1 billion to the
total, while Chemicals delivered $0.7 billion and other businesses $0.2
billion.

Capital investment rose 38% to $11.8 billion, mainly due to increased spending
on growth projects in Exploration and Production. The return on average capital
employed on a CCS earnings basis was 19.2%, just below the record 19.5% in
2000. The total debt ratio at the end of the year was 8.9%. Cash, cash
equivalents and short-term securities amounted to $6.7 billion.

Total hydrocarbon production was at its highest levels in recent history and 2%
higher than in 2000. Oil production fell by 2% because of natural declines in
some fields, divestments and field performance. Production of natural gas was
10% higher than in 2000.

Crude oil prices weakened over the course of the year, with the sharpest falls
recorded in the aftermath of September 11. Brent crude prices averaged $24.45 a
barrel, compared with $28.50 a barrel in 2000. Oil prices were relatively
robust until September, with market concerns over the economic slowdown in the
USA offset by production restraints by the leading oil exporting countries. But
post-September 11 fears of a global recession triggered additional price falls.

With the exception of the US Gulf coast, industry refining margins fell last
year driven by weakening demand due to the general economic slowdown.

Marketing earnings benefited from higher gross fuels margins and the continued
roll-out of differentiated fuels.

Trading conditions for the Chemicals business were challenging, especially in
the USA, where the impact of falling demand was exacerbated by new capacity.
Chemical volumes were essentially unchanged from 2000.

EXPLORATION AND PRODUCTION

Earnings

|                          |  |      |       |      |  |      |       |   |  |           |        |  
|------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | - |  | --------- | ------ | -
|                          |  |      |       |      |  |      |       |   |  | $ million
|                          |  | 2002 |       | 2001 |  | 2000
|                          |  |      |       |      |  |     
|Segment earnings          |  |      | 6,997 |      |  |      | 8,023 |   |  |           | 10,059 |  
|Special credits/(charges) |  |      | (55   | )    |  |      | (24   | ) |  |           | 623    |  
|Adjusted segment earnings |  |      | 7,052 |      |  |      | 8,047 |   |  |           | 9,436  |  
|                          |  |      |       |      |  |      |       |   |  |           |        |  
|Change                    |  |      | -12   | %    |  |      | -15   | % |  |           | +107   | %
|                          |  |      |       |      |  |      |       |   |  |           |        |  

44     Discussion and Analysis of Financial Condition and Results of Operations



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2002

Adjusted earnings for the year were $7,052 million, 12% lower than in 2001.
This reflects the impact of lower gas realisations, changes to UK tax rates,
higher depreciation and higher costs. However, these factors were partially
offset by a 6% increase in hydrocarbon production to four million barrels of
oil equivalent per day, the highest in recent years.

Special charges for the year amounted to $55 million (compared with $24 million
in 2001) mainly from previously capitalised oil and gas costs in equity
associate Woodside Petroleum (Group interest 34%) that are no longer considered
to be recoverable and integration costs relating to the Enterprise acquisition.
These charges were partially offset by credits related to the grant of
manufacturing and marketing rights to expandable tubular technology.

Crude oil and natural gas prices

In 2002, Brent crude prices averaged $25.05 a barrel compared with $24.45 a
barrel the previous year. Crude oil prices recovered steadily in the first
three quarters of the year from below $20 to exceed $30 a barrel reflecting
production constraints in certain countries. Prices subsequently weakened only
to rebound to $30 a barrel at the end of the year when supply from Venezuela
was disrupted. The crude price outlook for 2003 is highly uncertain and prices
are expected to be volatile and impacted by developments in the Middle East and
Venezuela.

Natural gas prices outside the USA remain linked to liquid hydrocarbon prices
and reflected the pattern of steady increase over the year. In the USA, prices
were lower than in 2001 although strengthened towards the end of the year.

Oil and gas production

Total hydrocarbon production for 2002 rose by 6%, comprising a 7% increase in
oil production and a 5% increase in gas production. Oil production benefited
from the acquisition of Enterprise, an additional interest in the Draugen field
in Norway and new fields in the USA and Denmark. These increases were partly
offset by lower OPEC production quotas, normal field declines, and divestments
in New Zealand and elsewhere. Gas production also increased as a result of the
acquisition of Enterprise and from new fields in the USA. These increases were
partly offset by the effects of warmer weather in Europe, normal field declines
in the USA and divestments in New Zealand.

Excluding the contribution of Enterprise volumes, total hydrocarbon production
was 1% higher than in 2001.

Portfolio actions

The successful acquisition of Enterprise in 2002 for a cash consideration of
$5.3 billion was the most significant change to strengthen the Groups upstream
portfolio, adding new developments and exploration acreage in several countries
and contributing some $100 million to earnings and some $850 million to cash
from operating activities. Integration has proceeded rapidly with significant
synergies realised and the demonstration that more can be achieved in 2003. The
new assets provided an immediate boost to global production and are
contributing an additional 240,000 barrels of oil equivalent per day. The
portfolio was further enhanced by the acquisition of an increased stake in the
Norwegian Draugen field where Group interest was increased by 10% to 26.2%. The
North American gas portfolio was improved through the acquisition of new fields
in the Pinedale, Wyoming area.

The exploration portfolio was refreshed and achieved an exploration and
appraisal global success rate of some 55%, including significant discoveries in
the USA Gulf of Mexico, such as Great White, Deimos and Tahiti. In Kazakhstan,
the Kashagan field (Group interest 16.7%) was declared commercial and initial
estimates suggest that the field could contain 79 billion barrels of oil. The
more recent discovery of the Kalamkas field further underlines the immense
potential of the Kazakhstan region. Major discoveries were also made in Brazil,
Ireland and Nigeria. New exploration licences were acquired in geographic areas
where the Group has strategic interests such as the USA Gulf of Mexico and
Norway.

The result of these portfolio actions, together with the Groups leadership in
technology, is the strengthening of a portfolio that is very robust at both
high and low oil prices.

Capital investment

Capital investment of $14.1 billion was $6.1 billion higher than in 2001,
mainly as a result of the acquisition of Enterprise and increased investment in
growth projects. These include the Athabasca Oil Sands Project in Canada and
the EA Project in Nigeria, both of which began production in late 2002, the
offshore development Na Kika in the USA and Bonga in Nigeria. Work also began
on the Goldeneye gas field in the North Sea which is scheduled to start
production in late 2004.

Discussion and Analysis of Financial Condition and Results of Operations     45



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##### Table of Contents



Reserves

The proved hydrocarbon reserves replacement ratio for 2002 was 117% and the
five year rolling average (including oil sands) now stands at 109%. Excluding
the effects of acquisitions and divestments the hydrocarbon reserves
replacement ratio for 2002 was 50%. Proved reserves are equivalent to more than
13 years of current production. The additions to proved reserves arose mainly
from the acquisition of Enterprise, which substantially bolstered the Groups
overall portfolio in Europe and the Americas. These were augmented by
discoveries and extensions in the Caspian and the USA and improved recovery in
West Africa, Asia Pacific and the USA.

2001

Adjusted earnings for 2001 of $8,047 million were 15% below the $9,436 million
reported in 2000. The benefits from the highest hydrocarbon production in
recent history and a 7% rise in gas realisations were more than offset by
declining oil prices and increased depreciation and exploration expenses.
Performance improvements remained a priority, and cost savings totalling $2.1
billion against a 1998 baseline were achieved in 2001. Special charges for 2001
amounted to $24 million, compared with special credits of $623 million in 2000,
mainly related to gains from divestments.

In 2001, the Brent crude oil price averaged $24.45 a barrel compared to $28.50
a barrel in 2000. Oil prices were affected during much of the year by the
deterioration of the global economy and over-supply in the world oil market.

Natural gas prices outside the USA remain linked to liquids prices, and
therefore in 2001 displayed similar volatility, declining in the second half of
the year. US gas prices in particular declined markedly from record levels early
in 2001.

Total hydrocarbon production rose by 2% in 2001. A 10% increase in gas
production was offset by a 2% decline in oil production. Gas production was
boosted by the acquisition of Fletcher Challenge Energy (FCE) in New Zealand,
new fields in the UK, USA and Egypt and higher demand in the Netherlands, UK
and Nigeria. The decrease in oil production was mainly attributable to normal
declines in the UK, USA, Gabon and Australia and divestments in 2000. There was
also some disappointing field performance in the UK. These decreases were
partly offset by production from FCE and from fields that came on stream in the
USA and UK.

The upstream portfolio was strengthened in 2001 through both exploration
success and acquisitions. Two major discoveries were made in Nigeria, one of
which  Bonga South-West  was the largest industry discovery made in 2001.
In Brazil, Block BS-4 was estimated to have recoverable reserves of over 300
million barrels of oil equivalent.

The portfolio was further enhanced by the acquisitions of FCE in New Zealand
and McMurry Energy Company (McMurry) in the USA. The acquisition of FCE
strengthened the Groups presence in Asia Pacific. McMurry added proven natural
gas reserves in the Rocky Mountains. There were no significant divestments in
2001.

Capital investment of $8.0 billion was $3.2 billion higher than in 2000, mainly
as a result of the acquisitions of FCE and McMurry, as well as increased
project activity, especially in Canada, the USA and Nigeria. Two major
developments that highlighted Shells expertise in the technologically
demanding but highly prospective deepwater environment, came on stream in 2001.
Brutus, the Groups fifth successful tension-leg platform in the Gulf of Mexico
(Group interest 100%), was completed ahead of schedule and below budget.
Malampaya (Group interest 45%), located in 850 metres of water off the
Philippines, came on stream on time and within budget.

The proved hydrocarbon reserves replacement ratio for 2001 was 74%. The proved
hydrocarbon reserves replacement ratio before the effect of divestments and
acquisitions was 52%. The additions to proved reserves arose mainly from
discoveries and extensions in the USA and the UK, acquisitions in New Zealand,
the USA and Brunei, improved recovery in Denmark and Oman and revisions in
existing fields in the Netherlands and Nigeria, offset by negative revisions in
Canada and Egypt.

46     Discussion and Analysis of Financial Condition and Results of Operations



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GAS & POWER

Earnings

|                          |  |      |     |      |  |      |       |   |  |           |      |  
|------------------------- |  | ---- | --- | ---- |  | ---- | ----- | - |  | --------- | ---- | -
|                          |  |      |     |      |  |      |       |   |  | $ million
|                          |  | 2002 |     | 2001 |  | 2000
|                          |  |      |     |      |  |     
|Segment earnings          |  |      | 774 |      |  |      | 1,226 |   |  |           | 112  |  
|Special credits/(charges) |  |      | (23 | )    |  |      | 9     |   |  |           | (641 | )
|Adjusted segment earnings |  |      | 797 |      |  |      | 1,217 |   |  |           | 753  |  
|                          |  |      |     |      |  |      |       |   |  |           |      |  
|Change                    |  |      | -35 | %    |  |      | +62   | % |  |           | +156 | %
|                          |  |      |     |      |  |      |       |   |  |           |      |  

2002

Adjusted earnings of $797 million in 2002 were 35% lower than the $1,217
million record reported in 2001. Lower earnings were mainly due to lower LNG
prices, lower trading income in North America and a performance bonus related
to the USA natural gas liquids business recorded in 2001. This was partly
offset by record LNG volumes of 9.1 million tonnes and an improved contribution
from the power business.

Segment earnings for the year of $774 million included special credits of $163
million mainly from the sale of Shells direct and indirect interests in
midstream assets in Europe and the USA. Offsetting these credits were special
charges of $186 million, including $171 million write-downs related to the
power business.

Capital investment

Capital investment, excluding new loans to associated companies of $270 million
in 2002 ($152 million in 2001), was $682 million in 2002 compared with $810
million in the previous year. Main investments during 2002 related to LNG
supply, shipping and re-gasification projects and power developments.

Portfolio actions

Gas & Powers LNG business continued to grow strongly, with new supplies
targeting key markets, reinforcing Shells leading position in the industry.
The North West Shelf joint venture (Group interest 22%) in Australia was
selected to supply the first LNG to China through the import terminal in
Guangdong Province. Additional sales agreements with Japanese utilities were
completed for supplies from Malaysia Tiga (Group interest 15%) and the North
West Shelf project. Malaysia Tigas two-train LNG plant is due to commence
operations in 2003. In Australia, a 4.2 million tonnes per annum (mtpa) fourth
train is under construction for completion in 2004 and will supply existing and
new Japanese customers. Train 3 of Nigeria LNG (Group interest 25.6%) was
completed in 2002, three months ahead of schedule and within budget.
Additionally, Nigeria LNG secured a loan of over $1 billion, the largest ever
project financing in Sub-Saharan Africa, towards the construction of a 4th and
5th train expansion. These two trains are due on stream in 2005 and will supply
markets in the Atlantic Basin, bringing the annual capacity of the plant to 17
million tonnes and making it the third largest LNG facility in the world. In
Venezuela, Shell was selected as a partner with Mitsubishi and PDVSA for the
Mariscal Sucre LNG project (Group interest 30%). This project aims to develop
substantial gas reserves in the Norte de Paria fields for both export and
domestic markets.

In support of the businesss global LNG strategy of linking new markets with
the Groups portfolio of LNG supply sources, two of the four new build LNG
carriers were commissioned and delivered. Construction began on the Hazira Port
and LNG terminal to access the growing Indian market. In addition, the Group is
actively progressing access to the North American market through LNG terminal
capacity at Cove Point and Elba Island in the USA, and other potential sites.
Gas & Powers other businesses also progressed during 2002. In the Middle East
significant progress was made towards the development of world-scale Gas to
Liquids facilities. While in the midstream, a joint venture framework agreement
was signed for the West-East pipeline project in China to bring clean burning
natural gas to the rapidly expanding Chinese energy market.

In power, InterGen (Group interest 68%), a joint venture with Bechtel, started
operations at projects in Turkey, Egypt and Mexico, increasing InterGens
operational capacity by 70% during the year to 5.2 Gigawatts.

As part of the businesss active portfolio management half of the Groups
interest in Brunei Shell Tankers was divested, as was the 5% interest in HEIN
GAS in Germany and part of the Groups minority interest in other midstream
assets in Germany. In 2002, the sale of the indirect 14.75% interest in
Ruhrgas, for some 1.5 billion, was agreed subject to final clearance. In March
2003 the sale was closed. InterGen completed the sale of its onshore Texas
pipelines.

Discussion and Analysis of Financial Condition and Results of Operations     47



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##### Table of Contents



2001

Adjusted earnings for 2001 of $1,217 million were a record, and 62% higher than
the $753 million reported in 2000. This was mainly due to the growth in LNG
volumes at the Nigeria and Oman facilities that came on stream in 2000, higher
trading income and a performance bonus related to the natural gas liquids
business in North America. These improvements were partly offset by lower
results in power generation and higher project development costs associated
with growing the business.

The growth in the LNG business was reflected in the 19% increase in equity LNG
sales volumes, which reached 8.9 million tonnes in 2001, compared to 7.5
million tonnes in 2000.

Segment earnings for 2001 included a net special credit of $9 million. In 2000,
segment earnings included net special charges of $641 million, mainly from the
restructuring of assets in the USA.

Capital investment was $810 million compared with $483 million in 2000,
excluding new loans to associated companies. Main investments during 2001
related to LNG projects, LNGshipping, power developments, offshore pipelines in
the USA and the acquisition of equity stakes in gas distribution companies in
Egypt and Greece.

The portfolio of LNG supply projects continued to grow. A fourth train (the
basic LNG processing unit) of 4.2 million tonnes per annum (Mtpa) was approved
in Australia for the North West Shelf project for start up in 2004.

Shell also secured access to several emerging LNG markets, including capacity
rights in re-gasification terminals close to growing gas markets such as Cove
Point and Elba Island in the USA, and in Spain. The Hazira terminal in Gujarat
began construction to supply the growing Indian market.

In Egypt, the Group acquired 18% of the shares in Natgas, which had a 20-year
concession to build and operate a natural gas transmission and distribution
network aimed at industrial and commercial customers.

Four new power plants in the USA, UK, Australia and China were commissioned by
InterGen (Group interest 68%) during 2001 with twelve more plants under
construction. Two power plants designed to supply electricity during peak
demand periods were commissioned to supply the growing California energy
market. These were the first to be approved under the California Energy
Commissions emergency procedures. In the first quarter of 2002 Kinder Morgan
purchased InterGens Tejas Gas pipeline and storage system. In addition, the
Group won bids for the refurbishment of two power projects in Nigeria.

OIL PRODUCTS

Earnings

|                                                                      |  |      |       |      |  |      |       |   |  |           |       |  
|--------------------------------------------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | - |  | --------- | ----- | -
|                                                                      |  |      |       |      |  |      |       |   |  | $ million
|                                                                      |  | 2002 |       | 2001 |  | 2000
|                                                                      |  |      |       |      |  |     
|Segment net income                                                    |  |      | 2,178 |      |  |      | 2,332 |   |  |           | 2,437 |  
|Segment earnings on an estimated
current cost of supplies (CCS) basis |  |      | 1,618 |      |  |      | 3,067 |   |  |           | 2,068 |  
|Special credits/(charges)                                             |  |      | (184  | )    |  |      | (310  | ) |  |           | (970  | )
|Adjusted CCS segment earnings                                         |  |      | 1,802 |      |  |      | 3,377 |   |  |           | 3,038 |  
|                                                                      |  |      |       |      |  |      |       |   |  |           |       |  
|Change                                                                |  |      | -47   | %    |  |      | +11   | % |  |           | +56   | %
|                                                                      |  |      |       |      |  |      |       |   |  |           |       |  

2002

Adjusted CCS earnings in 2002 were $1,802 million compared to the record
earnings of $3,377 million in 2001. The business environment deteriorated in
2002 with historically low refining margins over the first half of the year and
pressure on marketing margins from rising crude oil prices. Unit cost
reductions of 3% were achieved in marketing. Unit manufacturing costs were 1%
higher due to unplanned maintenance and lower intakes in response to uneconomic
margins. The overall cost reduction per barrel of product sales was 2%.
Benefits from the acquisitions of Pennzoil-Quaker State
and Texacos interests in Equilon and Motiva (the latter with Saudi Refining
Inc.) in the USA and DEA in Germany are ahead of schedule. In aggregate these
acquisitions added some $100 million to adjusted CCS earnings and some $200
million to cash from operating activities in 2002.

48     Discussion and Analysis of Financial Condition and Results of Operations



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##### Table of Contents



Outside the USA, adjusted CCS earnings for 2002 of $1,797 million were 40%
lower than in 2001. This reflected lower industry refining margins in Rotterdam
and Singapore, which declined by $0.95 per barrel and $0.40 per barrel
respectively. Overall refinery utilisation was 4% lower, although refinery
intake rose by 10% as a result of higher throughput in Germany. Marketing
earnings declined as gross fuels margins were squeezed over the greater part of
the year when supply costs rose faster than sales prices. Differentiated retail
fuels, now launched in 46 countries, and income from convenience retailing
partially offset the margin decline. Total inland sales volumes for the year
were 8% higher (excluding the increase from DEA they were unchanged). Trading
earnings for the year declined, with limited regional arbitrage opportunities;
shipping earnings were adversely affected by a decline in freight rates.
Earnings from Shell Global Solutions (commercialisation of technology) showed
further growth.

In the USA, adjusted earnings fell from $402 million to $5 million in 2002.
Industry refining margins fell sharply by $3.85/bbl on the US West Coast and by
$2.40/bbl on the US Gulf Coast. Unplanned shutdowns continued to impact
earnings despite overall refinery utilisation rising by 1%. Marketing earnings
declined, with weaker gasoline margins over the first half of the year. Trading
and transportation earnings were lower. Reduced costs resulting from
streamlining of business structures provided significant offset,
notwithstanding transition costs resulting from integration of the two major
acquisitions in the USA.

On a global basis, net special charges for the year totalled $184 million. Most
of these resulted from the closure of refinery assets, continued restructuring
in the USA and Europe and increases in provisions for litigation and
environmental remediation in the USA. These were partially offset by gains on
asset sales, principally from pipeline assets in the USA. Special charges in
2001 totalled $310 million, mainly consisting of restructuring and rebranding
charges in the USA.

Fluctuations in crude oil and product prices during 2002 led to inventory
holding gains amounting to $560 million. Inventory holding gains/losses are
included in cost of sales in the Group Statement of Income.

Capital investment

Capital investment in 2002 amounted to $7.9 billion which included $5.1 billion
relating to the three major acquisitions and investment of $0.8 billion in the
USA since the consolidation of Equilon (Group interest now 100%). Capital
investment in 2001 was $1.5 billion.

Portfolio actions

The Oil Products portfolio was significantly strengthened in 2002 through
acquisitions which will reinforce the objective of leading the global
downstream industry.

In January a 50:50 joint venture in Germany with RWE-DEA commenced operations
and in July Shell took ownership of 100% of the venture for a cash
consideration of $1.3 billion, to be paid in July 2003. Integration of this
business is proceeding well and is on track to achieve $150 million in pre-tax
benefits by the end of 2003. The acquisition of Texacos interests in Equilon
and Motiva, the downstream joint ventures in the USA, was completed in
February. Good progress has been made in capturing the planned synergies and
benefits from the changes of ownership; business structures have been
streamlined and some 800 of the 13,000 Texaco stations had been rebranded to
Shell at the end of 2002, in a programme which will be completed by June 2004.
As part of the upgrading of the quality of the overall retail network in the
USA the total number of sites will be reduced by some 30%. The purchase of
Pennzoil-Quaker State Company in the USA was completed in October after
regulatory clearance. The transaction has a total equity value of $1.8 billion
and Shell has also taken on $1.1 billion of debt. This acquisition will make
Shell a leader in both the US and global lubricants markets with pre-tax
synergy benefits expected to be $140 million by 2004.

The sale of a 25% interest in Shells marketing businesses in South Africa to
Thebe Investment Corporation was completed in a positive response to the South
African Governments Black Economic Empowerment initiative.

2001

Record adjusted CCS earnings of $3,377 million were 11% up on 2000. The strong
performance reflected the benefits from an extensive cost improvement programme
that has delivered $2.1 billion in
savings compared with a 1998 baseline. The rationalisation of under-performing
assets also underpinned the improved performance.

Outside the USA, adjusted CCS earnings rose by 13% to $2,975 million. Higher
marketing earnings were supported by higher gross fuels margins and the
continuing introduction of differentiated retail fuels.

Discussion and Analysis of Financial Condition and Results of Operations     49



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##### Table of Contents



In the USA, adjusted earnings were $402 million compared with $395 million in
2000. The Equilon and Motiva joint ventures recorded higher earnings, but these
were partially offset by higher expenses outside these ventures.

Earnings from trading again made a substantial contribution with benefits
accruing from the integration of trading operations on a global basis.

Special charges in 2001 totalled $310 million worldwide, principally
constituting restructuring and re-branding expenses connected with the
acquisition of Texacos interests in the Equilon and Motiva joint ventures. The
special charges for 2000 were mainly related to the impairment of the Rayong
refinery in Thailand.

The improved marketing performance in 2001 was partly offset by a decline in
refining earnings. Refinery intake was 3% down on 2000, and margins came under
pressure, particularly in the second half of the year. This was the result of
lower demand due to the economic slowdown, a consequent rise in stocks and
increased competition exacerbated by surplus industry capacity.

Industry refining margins in Rotterdam averaged $1.80 a barrel in 2001,
compared with $3.00 in 2000. Refining margins were also under pressure
elsewhere. In Singapore, the average refining margin fell from $1.20 a barrel
in 2000 to just $0.80 because of surplus refining capacity in Asia Pacific. On
the US Gulf coast, the average refining margin rose from $4.50 a barrel in 2000
to $5.30 in 2001, reflecting strong US gasoline prices in the first half of
2001.

With crude oil and product prices being lower towards the end of 2001 compared
to 2000, inventory holding losses amounting to $735 million were reported.

Capital investment for 2001 amounted to $1,518 million, compared with $1,565
million in 2000. The focus was on marketing operations in key countries. In
2001 these accounted for $1,102 million of the total, while $360 million was
spent on refining assets and $56 million on investment in associated companies.

Shell Global Solutions, providing technology and technical expertise and
services to industry customers, continued to grow, and generated increased
earnings for the third consecutive year.

A joint venture agreement was completed with Sinopec in China for a major
expansion of Shell service stations in one of the worlds fastest-growing
economies.

CHEMICALS

Earnings

|                          |  |      |      |      |  |      |     |   |  |           |     |  
|------------------------- |  | ---- | ---- | ---- |  | ---- | --- | - |  | --------- | --- | -
|                          |  |      |      |      |  |      |     |   |  | $ million
|                          |  | 2002 |      | 2001 |  | 2000
|                          |  |      |      |      |  |     
|Segment earnings          |  |      | 489  |      |  |      | 230 |   |  |           | 992 |  
|Special credits/(charges) |  |      | (62  | )    |  |      | (11 | ) |  |           | 67  |  
|Adjusted segment earnings |  |      | 551  |      |  |      | 241 |   |  |           | 925 |  
|                          |  |      |      |      |  |      |     |   |  |           |     |  
|Change                    |  |      | +129 | %    |  |      | -74 | % |  |           | -6  | %
|                          |  |      |      |      |  |      |     |   |  |           |     |  

2002

The business environment showed some improvement after the extremely
challenging conditions in 2001 although trading conditions, especially in the
USA, remained difficult. Adjusted earnings at $551 million showed a significant
improvement compared with $241 million the previous year. The increase reflects
a 4% rise in volumes, improved margins, lower costs and an incremental fiscal
benefit of $37 million. Results from associates also improved, reflecting
better cost management and the benefits of restructuring, primarily in Basell,
the 50:50 joint venture with BASF. Industry utilisation remained flat in
Europe, but improved in the USA from historically low levels in 2001. Low gas
feedstock prices relative to crude prices in the USA made the economics of
cracking liquid feedstocks less favourable.
Continued focus on cost improvement and higher volumes meant that total unit
costs, excluding feedstocks, improved by 7%. A non-recurring fiscal benefit of
$102 million resulted from European restructuring.

Segment earnings showed special charges of $62 million consisting of provisions
related to asset rationalisation and litigation claims.

50     Discussion and Analysis of Financial Condition and Results of Operations



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Capital investment

Capital investment in 2002 totalled $839 million compared with $751 million in
2001. Capital is being directed to projects that enhance the Groups ability to
manufacture and sell bulk petrochemical building blocks to large industrial
customers and included initial equity investment in southern China for the
Nanhai petrochemicals project.

Portfolio actions

After a period when the focus has been on divestment, attention in 2002 turned
to strengthening and enhancing the Chemicals portfolio.

The final investment decision on the Nanhai petrochemicals project in Guangdong
Province in China was taken. The Group has a 50% share in this $4.3 billion
project which constitutes its largest ever single chemicals investment.
Construction work is due to start in 2003 with the plant scheduled to be
completed in late 2005.

In 2002, Chemicals brought on-line some 2 million tonnes of new production
capacity. Successful completion of a fourth olefins and alcohols unit at
Geismar in the USA consolidated the Groups position as the worlds largest
supplier of higher olefins and detergent alcohols. The $500 million Ellba
Eastern complex in Singapore started operation. This is a 50:50 joint venture
with BASF to produce styrene monomer, propylene oxide and polyols.

A new benzene unit in the Netherlands was completed ahead of schedule. The
plant uses new technology to minimise environmental impact and help reduce the
movement of benzene-containing streams in Shells European business. The unit
will take benzene-rich streams from the Moerdijk cracker and other Shell
European locations and the output will be used for styrene monomer/propylene
oxide production on the same site.

Also, construction began of a new polymer polyol plant at Pernis, the
Netherlands, which will be the largest in Europe and will consolidate the
Groups position as the leader in the global polyols market. Further, a joint
venture with SGF Chimie (Group interest 50%) was established to build and
operate a polytrimethylene terephthalate plant in Montreal, Canada. These
products are used in carpeting and textiles; the plant is expected to start
production at the end of 2003.

The drive to simplify and streamline business processes and to make it easy to
do business with Shell chemical companies continued. A single marketing and
supply company for Europe was established in order to improve speed and
efficiency for customers and suppliers.

2001

Despite 2001 being one of the most challenging years for the chemical industry,
the business remained profitable. The difficult trading conditions were
reflected in the 74% fall in adjusted earnings to $241 million. Underlying
volumes (excluding feedstock trading and divested businesses) were maintained
however, in spite of weak markets. Lower unit margins in most businesses,
particularly in the USA, accounted for the decline in earnings. Lower demand
due to the economic slowdown, combined with new capacity coming on stream also
affected chemical markets.

Sales proceeds were down 30%, but allowing for the effects of divestments and
portfolio restructuring, the decrease was 5%.

The weakness in cracker margins in the USA was exacerbated by a reversal in the
second half of the year in the normally favourable economics of the liquid
feedstocks used by Shell crackers. Cracker margins in Europe, although
generally lower than in 2000, were better than in the USA.

Annual cost improvements of $726 million against the 1998 baseline exceeded the
$650 million target.

Capital investment in 2001 totalled $751 million, compared with $941 million in
2000.

The large-scale divestment programme announced in 1998, leading to a radical
restructuring of the chemicals business and a reduction in capital employed
from $12.7 billion to $8.5 billion, was completed in early 2001.

The acquisition of the Yabucoa refinery in Puerto Rico was made at the end of
2001, improving the supply of feedstocks to Shell operations in Texas and
Louisiana.

Basell, the 50:50 joint venture with BASF, announced the rationalisation of
polyolefin production in both Europe and the USA.

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OTHER INDUSTRY SEGMENTS

Earnings

|                          |  |      |      |      |  |      |      |   |  |           |     |  
|------------------------- |  | ---- | ---- | ---- |  | ---- | ---- | - |  | --------- | --- | -
|                          |  |      |      |      |  |      |      |   |  | $ million
|                          |  | 2002 |      | 2001 |  | 2000
|Segment earnings          |  |      | (110 | )    |  |      | (287 | ) |  |           | (12 | )
|Special credits/(charges) |  |      | 17   |      |  |      | (96  | ) |  |           | 83  |  
|Adjusted segment earnings |  |      | (127 | )    |  |      | (191 | ) |  |           | (95 | )

Renewables

2002

Wind power continues to develop as a promising business. In particular, the
first two commercial scale projects, Rock River and White Deer in the USA have
delivered a strong performance in their first full year of operation. The
acquisition of Whitewater Hill, a 60MW wind park in the San Gorgonio Pass,
California, and of the nearby Cabazon Pass wind park will bring the Groups
generating capacity in the USA to 230MW.

In Europe work continues to evaluate and develop offshore projects in the
Netherlands and the UK. The Group is part of the NoordzeeWind consortium which
has agreed, with the Dutch government, the development of the 100MW Near Shore
Wind Park at Egmond aan Zee.

The Groups solar business has been operating in a more difficult environment.
It is now one of the major photovoltaic players, after buying out the remainder
of its joint venture with Siemens and E.On in April 2002. However, in response
to the overcapacity in photovoltaic manufacturing around the world and the
downturn in demand that has affected all companies in the sector, the
restructuring of this business was announced. The intention is to concentrate
manufacturing operations in the USA, Germany and Portugal.

Despite the challenging trading environment there were some notable successes
including the contract to supply photovoltaic modules for the roof of the
Munich Trade Fair Centre, in Germany, and the first solar home systems being
delivered in Xinjiang, China.

2001

In 2001, Renewables reinforced its competitive position in the rapidly
expanding global market for renewable energy sources.

Renewables announced what will be one of the worlds biggest solar rural
electrification projects, in a remote area of western China, with solar home
systems to be installed in 78,000 households.

Wind power also showed promise, with growing demand for green electricity. In
2001, a 50 megawatt (MW) wind farm in Wyoming, and an 80MW wind farm in Texas
were acquired. The two projects, which between them can meet the energy needs
of some 60,000 households, boosted total installed capacity from 8MW to 138MW.

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Shell Consumer

2002

At the beginning of 2002 Shell Consumer, Shell Capital and Shell Internet Works
were reorganised into one new business, Shell Consumer. The rationale is to
leverage the Shell brand more widely in the consumer space, particularly where
it can lend support to the Groups established businesses. The mandate is to
add value through developing innovative consumer and financial products
businesses.

During the year there was much progress on the business development and
operational fronts. This included Shell autoserv, a car servicing business
first piloted in 2001, which was expanded in 2002 and now operates sites in
Australia, South Africa and Thailand. Credit card businesses are now operating
in Norway and the UK. Shell Consumer divested its share in a retail energy
business in Australia but developed new operations in the Netherlands (green
power) and Norway (electricity) alongside its continuing gas and electricity
business in a number of states in the USA where deregulation has offered
opportunities to new entrants.

2001

Shell Consumer was formed as a new business in March 2001, with a mandate to
grow new value in the consumer market.

The focus of the business development activity in Shell Consumer during 2001
was primarily centred on retail energy, car servicing, heating, ventilation and
climate control services, mobile services for motorists on the move and a range
of services for home owners delivered via the internet.

In the business sphere, Shell Capital made a number of loans to independent oil
and gas producers in the USA, Canada and the Caspian Sea region. In the USA, a
number of loans were made to gasoline and convenience store owners. In Norway,
a Shell Visa card was launched, and in the UK Shell Capital entered the vehicle
financing market.

In the business-to-business area, Shell Internet Works had minority investments
in Trade-Ranger, the energy and petrochemical e-procurement exchange, and
Currenex, the online foreign currency trading business. Trade-Ranger completed
its second round financing in 2001.

In Argentina and Singapore, consumer-oriented portals were launched providing
customers with a variety of services and products. In both cases this includes
ordering online and delivery of goods via the local service station network.

Shell Internet Ventures, the Groups venture capital fund, made six investments
totalling $25 million in technology companies with products and services
relevant to Shell businesses.

Shell Hydrogen

2002

The Group continues to explore technology that could allow hydrogen and fuel
cells to meet the worlds future energy needs in a sustainable and
emission-free way.

Amongst the developments in 2002 was the announcement of a plan to build the
first hydrogen refueling station in Tokyo. Shell is an important partner in
this project that is sponsored by the Japanese government and will provide
hydrogen to a fleet of prototype vehicles. The Group acquired an equity stake
in QuestAir Technologies Inc (Group interest 10.6%) that is developing
technology to purify hydrogen. It is vital to develop this technology if
hydrogen is to become commercially available on a wide scale. Work also
continued with joint venture partners on the development of commercially
attractive fuel cells and on developing safe and convenient hydrogen storage
systems.

Discussion and Analysis of Financial Condition and Results of Operations     53



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2001

In 2001, research intensified into the technologies that could underpin the
future transformation away from fossil fuels and towards a hydrogen and fuel
cell-based economy. Shell Hydrogen continued to develop its presence in a
number of promising technological areas. Four joint ventures were created, two
of which were private capital joint ventures to invest in emerging companies
concentrating on promising hydrogen and fuel cell technology. The remaining two
focused on existing technology. One commercialising hydrogen-producing fuel
processors while the other focusing on metal hydride hydrogen storage tanks.

CORPORATE

2002

Adjusted earnings for 2002 showed a loss of $751 million compared with a loss
of $320 million in the previous year. The increased loss is mainly a result of
higher net interest costs.

2001

In 2001, adjusted losses of $320 million showed a $317 million improvement over
the $637 million loss recorded in 2000, reflecting reduced net interest expense
from a year earlier and favourable currency exchange effects. The special
charges in 2000 mainly related to the endowment of The Shell Foundation.

LIQUIDITY AND CAPITAL RESOURCES

Statement of Cash Flows

The net effect of the flow of funds for 2002 was a decrease of $5.1 billion in
cash and cash equivalents.

Cash flow generated by operations decreased from $16.9 billion in 2001 to $16.4
billion in 2002. Within cash flow used in investing activities (net $20.7
billion), capital expenditure and new investments in associates increased from
$10.7 billion to $22.4 billion, mainly due to acquisitions (see below). There
were proceeds from sales of assets and disposals of investments in associates
of $1.6 billion; in 2001 such proceeds amounted to $1.8 billion. Dividends of
$7.0 billion were paid in 2002 to the Parent Companies, Royal Dutch and Shell
Transport, a decrease of $2.4 billion compared with 2001 due to lower share
buybacks by the Parent Companies. In addition, there was a net drawdown in debt
of $6.7 billion, due mainly to the acquisitions.

Capital investment

Group companies capital expenditure, exploration expense, new investments in
associated companies and other investments increased by $12.8 billion to $24.6
billion in 2002, mainly as a result of the acquisitions of Enterprise Oil,
Pennzoil-Quaker State, DEA and additional interests in Equilon and Motiva.
Exploration and Production expenditure, at $14.1 billion (2001: $8.0 billion),
accounted for more than half of this total. Oil Products investment totalled
$7.9 billion (2001: $1.5 billion). Chemicals investment was $0.8 billion (2001:
$0.8 billion), while Gas & Power accounted for $0.7 billion (2001: $0.8
billion).

Capital investment in 2003 is estimated to be approximately $12 billion.
Spending will continue to be subjected to investment discipline, stringent
project selection and the need to balance profitability with growth.
Exploration and Production will continue to be the major element. It is
expected that the Group companies investments will be financed from internally
generated funds.

Financial condition

Cash, cash equivalents and short-term securities were $1.6 billion at the end
of 2002, down $5.1 billion on 2001, whilst the total of short and long-term
debt increased by $13.9 billion to $19.7 billion. The debt ratio increased from
8.9% in 2001 to 23.6% in 2002, within the desired gearing range.

Net assets increased by $3.9 billion to $60.1 billion during 2002. Fixed and
other long-term assets increased by $31.0 billion to $112.1 billion. Net
current liabilities increased by $11.6 billion to $14.6 billion. During 2002,
the Group increased its Medium Term Note and Commercial Paper Facilities to a
total of $26 billion. These facilities, together with available funds, offer
ample flexibility to meet working capital needs.

The following table summarises the Groups principal contractual obligations
and commercial commitments as of December 31, 2002. Please also refer to Notes
15, 16 and 18 to the Financial Statements.

54     Discussion and Analysis of Financial Condition and Results of Operations



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Payments due by period

|                                     |  |       |      |        |  |           |     |           |  |         |     |  |  |  |     |       |  |           |      | 
|------------------------------------ |  | ----- | ---- | ------ |  | --------- | --- | --------- |  | ------- | --- |  |  |  | --- | ----- |  | --------- | ---- | 
|                                     |  |       |      |        |  |           |     |           |  |         |     |  |  |  |     |       |  | $ billion
|                                     |  |       |      |        |  | Less than |     |           |  |         |     |  |  |  |     | After
|Contractual Obligations              |  | Total |      | 1 year |  | 2-3 years |     | 4-5 years |  | 5 years
|                                     |  |       |      |        |  |           |     |           |  |        
|Long-term debt                       |  |       | 8.5  |        |  |           | 2.2 |           |  |         | 2.1 |  |  |  | 3.4 |       |  |           | 0.8  | 
|Leasing arrangements                 |  |       | 9.4  |        |  |           | 2.0 |           |  |         | 2.1 |  |  |  | 1.3 |       |  |           | 4.0  | 
|Long-term purchase
obligations       |  |       | 9.1  |        |  |           | 0.6 |           |  |         | 1.1 |  |  |  | 1.0 |       |  |           | 6.4  | 
|Long-term power
capacity obligations |  |       | 6.9  |        |  |           | 0.2 |           |  |         | 0.6 |  |  |  | 0.7 |       |  |           | 5.4  | 
|Other long-term liabilities          |  |       | 6.1  |        |  |           |    |           |  |         | 3.7 |  |  |  | 1.5 |       |  |           | 0.9  | 
|                                     |  |       |      |        |  |           |     |           |  |         |     |  |  |  |     |       |  |           |      | 
|Total                                |  |       | 40.0 |        |  |           | 5.0 |           |  |         | 9.6 |  |  |  | 7.9 |       |  |           | 17.5 | 
|                                     |  |       |      |        |  |           |     |           |  |         |     |  |  |  |     |       |  |           |      | 

Environmental and decommissioning costs

Group companies are present in over 145 countries and territories throughout
the world and are subject to a number of different environmental laws,
regulations and reporting requirements. It is the responsibility of each Group
company to implement a health, safety and environmental management system that
is suited to its particular circumstances.

The costs of prevention, control, abatement or elimination of releases into the
air and water, as well as the disposal and handling of wastes at operating
facilities, are considered to be an ordinary part of business. As such, these
amounts are included within operating expenses. An estimate of the order of
magnitude of amounts incurred in 2002 for Group companies, based on allocations
and managerial judgement, is $1.1 billion (2001: $0.6 billion). Expenditures of
a capital nature to limit or monitor hazardous substances or releases include
both remedial measures on existing plants and integral features of new plants.
Whilst some environmental expenditures are discrete and readily identifiable,
others must be reasonably estimated or allocated based on technical and
financial judgements which develop over time. Consistent with the preceding,
estimated environmental capital expenditures made by companies with major
capital programmes during 2002 were $0.8 billion (2001: $0.4 billion). Those
Group companies are expected to incur environmental capital costs of at least
$0.8 billion during both 2003 and 2004. It is not possible to predict with
certainty the magnitude of the effect of required investments in existing
facilities on Group companies future earnings, since this will depend amongst
other things on the ability to recover the higher costs from customers and
through fiscal incentives offered by governments. Nevertheless, it is
anticipated that over time there will be no material impact on the total of
Group companies earnings. These risks are comparable to those faced by other
companies in similar businesses. At the end of 2002, the total liabilities
being carried for environmental clean-up were $797 million (2001: $454
million). In 2002, there were payments of $139 million and increases of
provisions of $120 million. Provisions being carried for expenditures on
decommissioning and site restoration, including oil and gas platforms, amounted
to $3,528 million (2001: $2,615 million).

OTHER MATTERS

Risk management and internal control

The Groups approach to internal control is based on the underlying principle
of line managements accountability for risk and control management. The
Groups risk and internal control policy explicitly states that the Group has a
risk-based approach to internal control and that management in the Group is
responsible for implementing, operating and monitoring the system of internal
control, which is designed to provide reasonable but not absolute assurance of
achieving business objectives.

Established review and reporting processes bring risk management into greater
focus and enable the Conference (meetings between the members of the
Supervisory Board and the Board of Management of Royal Dutch and the Directors
of Shell Transport) regularly to review the overall effectiveness of the system
of internal control and to perform a full annual review of the systems
effectiveness.

At Group level and within each business, risk profiles which highlight the
perceived impact and likelihood of significant risks are reviewed each quarter
by the Committee of Managing Directors and by the Conference. Each risk profile
is supported by a summary of key controls and monitoring mechanisms. A
risk-based approach to internal control continues to be embedded within the
businesses. In addition, non-Shell operated ventures and affiliates are
encouraged to adopt processes consistent with the Groups approach.

Discussion and Analysis of Financial Condition and Results of Operations     55



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The Groups approach to internal control also includes a number of general and
specific risk management processes and policies. Within the essential framework
provided by the Statement of General Business Principles, the Groups primary
control mechanisms are self-appraisal processes in combination with strict
accountability for results. These mechanisms are underpinned by controls
including Group policies, standards and guidance material that relate to
particular types of risk, structured investment decision processes, timely and
effective reporting systems and performance appraisal.

Examples of specific risk management processes include the Group Issue
Identification and Management System, by which reputation risks are identified
and monitored. A common Health, Safety and Environment (HSE) Policy has been
adopted by Shell companies. All companies have HSE management systems in place
and for major installations the environmental component of such systems has
been certified to international standards. The Group Financial Control Handbook
establishes standards applicable across the Group on the application of
internal financial controls. The management of particular risks related to
property, liability and treasury is described separately opposite.

A procedure for reporting business control incidents enables management and the
Group Audit Committee to monitor incidents arising as a result of control
breakdowns and to ensure appropriate follow-up actions have been taken. Lessons
learned are captured and shared as a means of improving the Groups overall
control framework.

A formalised self-appraisal and assurance process has been in place for many
years. The process was reviewed and updated in 2002. Each year the management
of every business unit provides assurance as to the adequacy of financial
controls and reporting, treasury management, risk management, HSE management
and the Statement of General Business Principles, as well as other important
topics. Any business integrity concerns or instances of bribery or illegal
payments are to be reported. The results of this process and any qualifications
made are reviewed by the Group Audit Committee and support representations made
to the external auditors.

In addition, internal audit plays a critical role in the objective assessment
of business processes and the provision of assurance. Audits and reviews of
Group operations are carried out by Group Internal Audit to provide the Group
Audit Committee with independent assessments regarding the effectiveness of
risk and control management.

Property and liability risks

The Groups Operating Companies insure against most major property and
liability risks with the Groups captive insurance companies. These companies
reinsure part of their major catastrophe risks with a variety of international
insurers. The effect of these arrangements is that uninsured losses for any one
incident are unlikely to exceed $400 million.

Treasury and trading risks

As further discussed in Note 28 on page G33, Group companies, in the normal
course of their business, use financial instruments of various kinds for the
purposes of managing exposure to currency, commodity price and interest rate
movements.

The Group has Treasury Guidelines applicable to all Group companies and each
Group company is required to adopt a treasury policy consistent with these
guidelines. These policies cover financing structure, foreign exchange and
interest rate risk management, insurance, counterparty risk management and
derivative instruments, as well as the treasury control framework. Wherever
possible, treasury operations are operated through specialist Group regional
organisations without removing from each Group company the responsibility to
formulate and implement appropriate treasury policies.

Each Group company measures its foreign currency exposures against the
underlying currency of its business (its functional currency), reports
foreign exchange gains and losses against its functional currency and has
hedging and treasury policies in place which are designed to minimise foreign
exchange exposure so defined. The functional currency for most upstream
companies and for other companies with significant international business is
the US dollar, but other companies normally have their local currency as their
functional currency.

The financing of most Operating Companies is structured on a floating-rate
basis and, except in special cases, further interest rate risk management is
discouraged.

Apart from forward foreign exchange contracts to meet known commitments, the
use of derivative financial instruments by most Group companies is not
permitted by their treasury policy.

56     Discussion and Analysis of Financial Condition and Results of Operations





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Some Group companies operate as traders in crude oil, natural gas, oil products
and other energy related products, using commodity swaps, options and futures
as a means of managing price and timing risks arising from this trading. In
effecting these transactions, the companies concerned operate within procedures
and policies designed to ensure that risks, including those relating to the
default of counterparties, are minimised.

Other than in exceptional cases, the use of derivative instruments is generally
confined to specialist oil and gas trading and central treasury organisations
which have appropriate skills, experience, supervision and control and
reporting systems.

Supplementary information on derivatives and other financial instruments and
derivative commodity instruments is given on pages G37 to G49.

Pension funds

The estimated actuarial valuation of the Groups four main pension funds in
aggregate at end 2002 shows a modest surplus of assets over liabilities. This
actuarial valuation, rather than the Group accounting policy FAS87 measure
(Note 20 to the Financial Statements), is the basis on which the funds
trustees steer the funds and define the required contributions from the member
companies.

Employees

Overall, the number of employees in the Group has increased by over 25% during
the year primarily as a result of the acquisitions in the Oil Products business
(Equilon, Pennzoil-Quaker State and DEA). Further increases resulted from the
consolidation of former associate companies, the start-up of new operations and
from business expansion. These were only partially offset by the conversion of
certain retail operations to an agency basis. Further streamlining across the
Group will continue, due to the integration of acquisitions and the ongoing
restructuring of companies across the Group.

Research and development costs

The Groups research and development (R&D) programmes are designed to enable
the Group to reduce costs and improve operations. Total R&D expenses for 2002
were $472 million, compared with $387 million for 2001.

Cautionary statement

The Operational and Financial Review and other sections of this Report contain
forward-looking statements that are subject to risk factors associated with the
oil, gas, chemicals, power generation and renewable resources businesses. It is
believed that the expectations reflected in these statements are reasonable,
but they may be affected by a variety of variables which could cause actual
results or trends to differ materially, including, but not limited to: price
fluctuations, actual demand, currency fluctuations, drilling and production
results, reserve estimates, loss of market, industry competition, environmental
risks, physical risks, legislative, fiscal and regulatory developments,
economic and financial market conditions in various countries and regions,
political risks, project delay or advancement, approvals and cost estimates.

Discussion and Analysis of Financial
Condition and Results of Operations     57





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Royal Dutch Petroleum Company




CONTROL OF REGISTRANT

Royal Dutch is not directly or indirectly owned or controlled by another
corporation or by any government.

Ordinary shares and priority shares

The General Meeting of Shareholders held on May 16, 2002, adopted a resolution
to redenominate the nominal (par) value of the priority and ordinary shares
from guilders into euro. The new nominal (par) value of the priority shares is
448 each and of the ordinary shares 0.56 each. The rights of the holders of

the ordinary shares have not been impaired. Of Royal Dutchs outstanding
ordinary shares, with a nominal (par) value of 0.56 each, approximately 73.5%
is in bearer form; the remainder is registered. As at March 3, 2003, no
interests had been notified to the Company in 5% or more of the Companys
issued ordinary share capital. As at the same date the Directors and officers
of Royal Dutch owned in aggregate (including shares under option) less than 1%
of the ordinary share capital of Royal Dutch. See Management  Share
Ownership on page 65.

Royal Dutch has 1,500 priority shares outstanding. Each of the members of the
Supervisory Board and each Managing Director is the holder of six priority
shares. Taken together, the members of the Supervisory Board and the Managing
Directors hold 66 priority shares. The other 1,434 priority shares were held,
as at March 3, 2003, by the Royal Dutch Priority Shares Foundation. The Board
of the Foundation consists of all the members of the Supervisory Board and the
Managing Directors of Royal Dutch. The important special rights attaching to
these shares are as follows:



| |  | determining of the number of members of the Supervisory Board and the number of Managing Directors, provided that
the Supervisory Board should consist of at least five members and the Board of Management of at least two members;
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | drawing-up of a binding nomination consisting of two persons for filling vacancies on the Supervisory Board and the
Board of Management;                                                                                            
| 
| |  | granting of consent required for amendment of the Articles of Association or for dissolution of Royal Dutch;                                                                                                                        
| 
| |  | granting of consent required for the assignment of priority shares.                                                                                                                                                                 

The above-mentioned rights are exercised by the meeting of holders of priority
shares. At this meeting one vote may be cast for each priority share, but no
one may cast more than six votes in all.




NATURE OF TRADING MARKET

The principal trading markets for the ordinary shares of Royal Dutch are the
stock exchanges in Amsterdam and New York. Royal Dutch ordinary shares are also
listed on stock exchanges in Austria, Belgium, France, Germany, Luxembourg,
Switzerland and the United Kingdom.

Royal Dutch ordinary shares are issuable in bearer or registered form.

Royal Dutch shares of New York Registry may be transferred on the books of
Royal Dutch and exchanged for bearer shares, for shares of Hague Registry or
for shares of New York Registry of other denominations at JPMorgan Chase Bank
(c/o JPMorgan Service Center, PO Box 43013, Providence, RI 02940-3013) as
Transfer Agent and Registrar. The Transfer Agent maintains drop facilities at

the offices of Securities Transfer and Reporting Services (STARS), 100 William
Street, Galleria, New York, NY 10038, where stock certificates and related
instruments may be received and redelivered. Besides being listed and traded on
the New York Stock Exchange, Royal Dutch shares of New York Registry are also
admitted to unlisted trading privileges on the following stock exchanges:
Boston, Cincinnati, Midwest, Pacific and Philadelphia.

Royal Dutch ordinary shares other than those of New York Registry are
predominantly in bearer form.

At March 3, 2003, there were outstanding 522,321,706 shares of New York
Registry representing approximately 24.9% of the ordinary share capital of
Royal Dutch, held by approximately 19,000 holders of record.

58     Royal Dutch Petroleum Company





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The following tables set forth the high and low prices for Royal Dutch 0.56
par value ordinary shares on Euronext Amsterdam and for Royal Dutch shares of
New York Registry on the New York Stock Exchange for the periods specified:

|       |  |           |       |                |  |      |       |     |  |  |       |  |  |  |       | 
|------ |  | --------- | ----- | -------------- |  | ---- | ----- | --- |  |  | ----- |  |  |  | ----- | 
|       |  | Euronext  |       | New York      
|       |  | Amsterdam |       | Stock Exchange
|       |  |           |       |               
|       |  | High      |       | Low            |  | High |       | Low
|Period |  |          |       |               |  | $    |       | $  
|       |  |           |       |                |  |      |       |    
|1998   |  |           | 56.95 |                |  |      | 36.57 |     |  |  | 60.38 |  |  |  | 39.75 | 
|1999   |  |           | 64.10 |                |  |      | 34.90 |     |  |  | 67.38 |  |  |  | 39.56 | 
|2000   |  |           | 75.90 |                |  |      | 51.51 |     |  |  | 65.69 |  |  |  | 50.44 | 
|2001   |  |           | 73.48 |                |  |      | 43.72 |     |  |  | 64.15 |  |  |  | 39.75 | 
|2002   |  |           | 63.20 |                |  |      | 39.21 |     |  |  | 57.30 |  |  |  | 38.60 | 

|            |  |           |       |                |  |      |       |     |  |  |       |  |  |  |       | 
|----------- |  | --------- | ----- | -------------- |  | ---- | ----- | --- |  |  | ----- |  |  |  | ----- | 
|            |  | Euronext  |       | New York      
|            |  | Amsterdam |       | Stock Exchange
|            |  |           |       |               
|            |  | High      |       | Low            |  | High |       | Low
|Period      |  |          |       |               |  | $    |       | $  
|            |  |           |       |                |  |      |       |    
|2001        |  |           |       |                |  |      |       |     |  |  |       |  |  |  |       | 
|1st Quarter |  |           | 68.59 |                |  |      | 60.95 |     |  |  | 64.15 |  |  |  | 53.63 | 
|2nd Quarter |  |           | 73.48 |                |  |      | 59.01 |     |  |  | 62.46 |  |  |  | 53.30 | 
|3rd Quarter |  |           | 69.10 |                |  |      | 43.72 |     |  |  | 59.09 |  |  |  | 39.75 | 
|4th Quarter |  |           | 60.23 |                |  |      | 51.75 |     |  |  | 54.48 |  |  |  | 45.62 | 
|2002        |  |           |       |                |  |      |       |     |  |  |       |  |  |  |       | 
|1st Quarter |  |           | 62.80 |                |  |      | 52.50 |     |  |  | 55.48 |  |  |  | 46.62 | 
|2nd Quarter |  |           | 63.20 |                |  |      | 51.95 |     |  |  | 56.34 |  |  |  | 50.48 | 
|3rd Quarter |  |           | 58.80 |                |  |      | 39.21 |     |  |  | 57.30 |  |  |  | 38.60 | 
|4th Quarter |  |           | 46.30 |                |  |      | 40.23 |     |  |  | 44.93 |  |  |  | 39.76 | 

|          |  |           |       |                |  |      |       |     |  |  |       |  |  |  |       | 
|--------- |  | --------- | ----- | -------------- |  | ---- | ----- | --- |  |  | ----- |  |  |  | ----- | 
|          |  | Euronext  |       | New York      
|          |  | Amsterdam |       | Stock Exchange
|          |  |           |       |               
|          |  | High      |       | Low            |  | High |       | Low
|Period    |  |          |       |               |  | $    |       | $  
|          |  |           |       |                |  |      |       |    
|2002      |  |           |       |                |  |      |       |     |  |  |       |  |  |  |       | 
|July      |  |           | 58.80 |                |  |      | 40.26 |     |  |  | 57.30 |  |  |  | 39.65 | 
|August    |  |           | 48.70 |                |  |      | 41.41 |     |  |  | 47.22 |  |  |  | 40.99 | 
|September |  |           | 46.43 |                |  |      | 39.21 |     |  |  | 44.98 |  |  |  | 38.60 | 
|October   |  |           | 46.30 |                |  |      | 40.23 |     |  |  | 44.75 |  |  |  | 39.76 | 
|November  |  |           | 44.90 |                |  |      | 42.00 |     |  |  | 44.93 |  |  |  | 42.13 | 
|December  |  |           | 44.41 |                |  |      | 41.00 |     |  |  | 44.50 |  |  |  | 41.80 | 
|2003      |  |           |       |                |  |      |       |     |  |  |       |  |  |  |       | 
|January   |  |           | 44.58 |                |  |      | 35.86 |     |  |  | 46.88 |  |  |  | 38.91 | 
|February  |  |           | 39.44 |                |  |      | 35.32 |     |  |  | 42.09 |  |  |  | 38.26 | 




ARTICLES OF ASSOCIATION

The following are brief summaries of certain provisions of the Articles of
Association of Royal Dutch and of Dutch law. Such descriptions do not purport
to be complete and are qualified in their entirety by reference to Royal
Dutchs Articles of Association, Book 2 of the Netherlands Civil Code and other
Dutch laws. A copy of Royal Dutchs Articles of Association translated into
English has been filed as an exhibit to this Annual Report on Form 20-F.

General

Royal Dutch was founded in the Netherlands on June 16, 1890 and is registered
with the Commercial Register in The Hague, the Netherlands under number
27002690. The object of Royal Dutch, as described in Article 2 of its Articles
of Association, is the foundation of, participation in and management and
financing of limited liability and other companies or undertakings which are
engaged in one or more branches of the oil, natural gas, chemical industry, in
mining, power generation and distribution,

Royal Dutch Petroleum Company     59





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renewables or in one or more other branches of business. Royal Dutch is further
entitled in general to do all that is necessary for the attainment of its
object or that is connected therewith in the widest sense.

Managing Directors and members of the Supervisory Board

Royal Dutch is managed by a Board of Management under the supervision of a
Supervisory Board.



|(a) |  | A Managing Director or member of the Supervisory Board shall not vote in respect of a proposal, arrangement or contract
in which he is materially interested.                                                                                                                                                                                                                                                                      
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | A Managing Director shall not vote in respect of any matter regarding compensation to himself or to any of the other Managing
Directors. Each of the Managing Directors receives a remuneration, which shall be fixed by the Supervisory Board. The maximum
aggregate remuneration of the members of the Supervisory Board is fixed by the General Meeting of Shareholders for division
by the Supervisory Board among its members.
|   
|(c) |  | The Managing Directors are empowered to exercise all powers of Royal Dutch to borrow money subject to the authorisation
of the Supervisory Board being required for contracting loans that will mature in more than one year.                                                                                                                                                                                                      
|   
|(d) |  | Managing Directors and members of the Supervisory Board are not required to hold shares of Royal Dutch in order to be qualified.                                                                                                                                                                                                                                                                                                   

Rights attaching to each class of shares



|(a) |  | Dividend rights
|--- |  | ---------------

Under Dutch law, dividend distributions are limited to the amount by which,
prior to such distributions, net assets exceed the aggregate of paid-up share
capital and undistributable reserves.

Annual accounts consisting of a balance sheet, profit and loss account and
notes to these documents, prepared by the Board of Management and reflecting
the reservation of such amounts as the Board of Management, with the approval
of the Supervisory Board, determines, are to be submitted each year by the
Supervisory Board to a General Meeting of Shareholders for approval.

Out of the profit which is available for distribution, there shall first be
distributed on each priority share an amount equal to 4 per cent of its par
value. The balance of profit available for distribution then remaining is
distributed to the holders of ordinary shares, unless the General Meeting of
Shareholders resolves that the whole or part of such profit be carried forward
to the following year. Shares acquired and held by Royal Dutch in its own
capital are not included in the profit distribution calculation and no
distributions are made thereon.

The Board of Management, with the approval of the Supervisory Board, may pay
interim dividends on the ordinary shares and priority shares. On the
recommendation of the Board of Management and the Supervisory Board, the
General Meeting of Shareholders may resolve that a dividend or interim dividend
on shares shall be payable in shares of Royal Dutch.

The right to claim payment of a dividend becomes forfeited upon the expiration
of six years from the date on which the dividend was first made obtainable, at
which time it reverts to Royal Dutch.



|(b) |  | Voting rights
|--- |  | -------------

Pursuant to Royal Dutchs Articles of Association, for each ordinary share with
a nominal (par) value of 0.56, one vote may be cast at a General Meeting of
Shareholders. For each priority share with a nominal (par) value of 448 eight
hundred votes may be cast.



|(c) |  | Rights to share in the companys profits
|--- |  | ----------------------------------------

Reference is made to (a) above regarding dividend rights.



|(d) |  | Liquidation rights
|--- |  | ------------------

In the event of a dissolution and liquidation of Royal Dutch, the holders of
priority shares are entitled to receive the nominal amount thereof, plus
accrued dividends thereon. The balance of the net proceeds
of liquidation is to be divided among the holders of ordinary shares in
proportion to their nominal amount.

60     Royal Dutch Petroleum Company





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|(e) |  | Redemption provisions
|--- |  | ---------------------

Neither the ordinary shares nor the priority shares are subject to any
redemption provisions.



|(f) |  | Sinking fund provisions
|--- |  | -----------------------

Neither the ordinary shares nor the priority shares are subject to any sinking
fund provisions under Royal Dutchs Articles of Association or as a matter of
Dutch law.



|(g) |  | Liability to further Capital calls
|--- |  | ----------------------------------

Since all of the registrants issued and outstanding ordinary shares and
priority shares have been fully paid in, Royal Dutch has no further capital
calls.



|(h) |  | Discriminating provisions
|--- |  | -------------------------

There are no provisions under Royal Dutchs Articles of Association or under
Dutch law discriminating against a shareholder because of his ownership of a
particular number of ordinary shares.



|(i) |  | Pre-emptive rights
|--- |  | ------------------

When new ordinary shares are issued, the existing holders of ordinary shares
shall have a pre-emptive right in proportion to their holdings, unless the
payment is to be other than in cash or the shares are issued to employees of
Royal Dutch or a legal entity with which Royal Dutch is associated in a group.
With the approval of the Supervisory Board, the Board of Management may resolve
to suspend the pre-emptive right if the Board of Management has been designated
by the General Meeting of Shareholders as competent to do so. Such designation
can only take place for a period in each case of not longer than five years.
The resolutions of the Board of Management and the Supervisory Board referred
to above may only be passed by unanimous vote of all the Managing Directors and
all of the members of the Supervisory Board present or represented at the
meeting.

Holders of priority shares have no preferential right in the event of an issue
of new shares.

Changing the rights of holders of shares

The rights of holders of ordinary and priority shares can be changed by
amendment of the Articles of Association of Royal Dutch. Only the General
Meeting of Shareholders can pass resolutions to that effect. Resolutions
providing for the amendment of the Articles of Association, or for the
dissolution of Royal Dutch, may only be adopted by the General Meeting of
Shareholders with the prior consent, or, in the case of the former, subject to
the subsequent approval, of a meeting of the holders of priority shares. A
resolution providing for the dissolution of Royal Dutch may only be passed by a
majority of at least two-thirds of the votes cast at a General Meeting of
Shareholders at which at least three-fourths of the issued capital of Royal
Dutch is represented. If such proportion of the issued capital is not so
represented, such resolution may be adopted at a second general meeting to be
held within eight weeks after the first meeting, at which meeting only an
absolute majority of the votes cast, irrespective of the part of the issued
capital which is represented thereat, shall be required to adopt the
resolutions.

General Meetings of Shareholders

General Meetings of Shareholders are to be held in Amsterdam, The Hague or
Rotterdam. Notice of the meeting is to be given by advertisement at least three
weeks in advance in at least one daily newspaper published in The Hague and two
national daily newspapers published in the Netherlands. This period may be
reduced to fifteen days in urgent cases. At least one General Meeting of
Shareholders is to be held annually. In order to attend a General Meeting of
Shareholders and exercise voting rights thereat in person or by proxy,
shareholders must be registered as such at a time to be determined by the Board
of Management on either the register of shareholders or, in the case of holders
of bearer share certificates, on a register designated by the Board of
Management, and, in each case, they must have notified Royal Dutch in writing
of their desire to exercise these rights not later than at the time and at the
place specified in the notice of convocation of the meeting. Failing the
designation of a register of holders of bearer share certificates by the Board
of Management, holders of bearer share certificates must deposit their
certificates against receipt not later than at the time and the place specified
in the notice of convocation. None of the times referred to in the previous two
sentences may be set on a date earlier than the seventh day before that of the
meeting.

General Meetings of Shareholders may be held as often as the Board of
Management or the Supervisory Board deem advisable, and may also be held when
holders of ordinary shares representing at least one-tenth of the issued share
capital address to the Board of Management and to
the Supervisory Board a written request to convene a general meeting,
specifying the subjects to be discussed. If such request is not acted upon so
as to enable the meeting to be held within six weeks, the persons making the
request may be empowered by the President of the District Court in The Hague to
convene the meeting themselves.

Royal Dutch Petroleum Company     61





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The Agenda for a General Meeting of Shareholders is to be specified in the
notice of convocation of the meeting. No other business may be transacted at
the meeting.

An absolute majority of the votes cast is required for the adoption of
resolutions, except in those cases where Dutch law or the Articles of
Association prescribe a larger majority. An absolute majority of the votes cast
is required for the appointment of persons to office, provided that, if after
two polls such majority has not been obtained, another poll is to be taken
between the two persons obtaining the highest number of votes in the second
poll, after which in the event of an equality of votes, the election is to be
decided by the drawing of lots.

Limitations on rights to own shares

There are no limitations imposed by Dutch law or Royal Dutchs Articles of
Association on the rights to own ordinary shares, including the rights of
non-resident or shareholders to hold or exercise voting rights on the ordinary
shares.

Provisions, which would delay, defer or prevent a change of control

None, other than the provisions regarding the rights of holders of priority
shares as described in Control of Registrant  Ordinary shares and priority
shares.

Threshold for disclosure of share ownership

There are no provisions in the Articles of Association of Royal Dutch requiring
disclosure of ownership of shares, but Dutch law requires owners of 5% or more
of the share capital of a company listed on a Stock Exchange in the European
Union or the European Economic Area to notify their interest to the company.

Changes in capital

The conditions imposed by Royal Dutchs Articles of Association for changes in
capital are not more stringent than required under Dutch law.




EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS

The Dutch External Financial Relations Act of 1994 enables the Minister of
Finance or the Central Bank of the Netherlands, as the case may be, to issue
regulations with regard to a number of financial transactions relating to the
import and export of capital. The regulations as issued and applied to date
have not restricted the activities and operations of Royal Dutch and the Dutch
Group companies.

There is no legislative or other legal provision currently in force in the
Netherlands or arising under the constituent documents of Royal Dutch
restricting remittances to non-resident holders of Royal Dutchs securities.




TAXATION

Income tax

Royal Dutch is generally required by Dutch law to withhold tax at a rate of 25%
on dividends. Under the current income tax convention between the United States
and the Netherlands, dividends paid by a Dutch corporation to an individual
resident of the United States, a corporation organised under the laws of the
United States (or of any state or territory thereof) or any other legal person
subject to US Federal income tax with respect to its worldwide income (a US
shareholder) that qualifies for benefits under the convention are generally
subject to Dutch withholding tax at a reduced rate of 15% of the amount of the
dividend (provided the shares on which the dividend is paid are not part of the
business property of a permanent establishment of the shareholder in the
Netherlands). In general, the entire dividend (including the withheld amount)
will be dividend income to the US shareholder, not eligible for the dividends
received deduction allowed to corporations, and the withholding tax will be
treated as a foreign income tax that is eligible for credit against the
shareholders US income taxes or a deduction subject to certain limitations.
Under a provision of the Dutch dividend tax act, Royal Dutch will apply a credit
(up to a maximum of 3% of the gross dividend amount) against the amount of the
dividend tax withheld before remittance to the Dutch tax authorities. For the
2002 final dividend this credit is 3% of the gross dividend from which dividend
tax is withheld. The benefit of this credit is passed to the Group in
accordance with the arrangements between Royal Dutch and Shell Transport.
Because of this
credit, the US tax authorities may take the view that the Dutch withholding tax
eligible for credit or a deduction by a US shareholder against its US income
tax liability should be limited accordingly. Under said convention, some US
organisations that are generally exempt from US Federal income tax and that are
constituted and operated exclusively to administer or provide pension,
retirement or other employee benefits are exempt at source from withholding tax
on dividends received

62     Royal Dutch Petroleum Company





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from a Dutch corporation. Under the income tax convention between the United
States and the Netherlands rules relating to the qualification of pension funds
have been issued. These rules determine the treatment under said convention. US
organisations that are exempt from US Federal income tax, that are operated
exclusively for religious, charitable, scientific, educational or public
purposes and that would be exempt from tax in the Netherlands if they were
organised, and carried on all their activities, therein, are subject to
withholding tax but may file for a full refund.

For Royal Dutch shareholders resident in any country other than the United
States and the Netherlands, the availability of a whole or partial exemption or
refund of the Dutch withholding tax is governed by the tax convention, if any,
between the Netherlands and the country of the shareholders residence.

Taxation on capital gains

Capital gains on the sale of shares of a Dutch company by a US shareholder are
generally not subject to taxation by the Netherlands unless the US shareholder
has a permanent establishment in the Netherlands and the capital gain is
derived from the sale of shares which are part of the business property of the
permanent establishment.

Succession duty and gift taxes

Shares of a Netherlands corporation held by an individual who is not a resident
or a deemed resident of the Netherlands will generally not be subject to
succession duty in the Netherlands on the individuals death unless the shares
are part of the business property of a permanent establishment situated in the
Netherlands.

A gift of shares of a Dutch company by a person who is not a resident or a
deemed resident of the Netherlands is generally not subject to Dutch gift tax.




MANAGEMENT

In accordance with its Articles of Association, Royal Dutch is managed by a
Board of Management consisting of at least two Managing Directors, under the
supervision of a Supervisory Board consisting of at least five members.
Managing Directors are appointed by the General Meeting of Shareholders from
the persons nominated by the meeting of holders of priority shares and hold
office until they retire unless discharged earlier by the General Meeting of
Shareholders.

The Supervisory Board is a separate body which does not include the Managing
Directors. Members of the Supervisory Board are appointed by the General
Meeting of Shareholders from the persons nominated by the meeting of holders of
priority shares. Each year, one of the members of the Supervisory Board retires
by rotation but is eligible for re-election. Further, a member of the
Supervisory Board retires after having served on the Supervisory Board for a
period of 10 years or retires effective on the first day of July following the
initial April 1 on which the member is 70 years of age.

Nominations for the appointment of a Managing Director or a member of the
Supervisory Board shall be made by a meeting of holders of priority shares and
may also be made by one or more holders of ordinary shares representing in the
aggregate at least 1% of the issued share capital, if approved by the meeting
of holders of priority shares. Each such nomination shall contain the names of
at least two qualified persons. Shareholders cast all of their votes on either
of the two qualified persons. Votes cast at a General Meeting of Shareholders
in favour of the election of other persons are void.

If a vacancy occurs on the Board of Management when there are still at least
two Managing Directors in office, or on the Supervisory Board when there are
still at least five members in office, the Board of Management shall notify the
Chairman of the meeting of holders of priority shares, which meeting shall
decide, after consulting the Supervisory Board and the Board of Management,
whether the vacancy is to be filled. If it is resolved to fill the vacancy, the
appointment shall be made at the next General Meeting of Shareholders. If there
are not at least two Managing Directors or at least five members of the
Supervisory Board still in office, a General Meeting of Shareholders shall be
held within three months after that situation has arisen in order to fill the
vacancy.

Royal Dutch Petroleum Company     63





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The Managing Directors, members of the Supervisory Board and officers of Royal
Dutch at March 3, 2003, were:

Managing Directors
Jeroen van der VeerPresident

Born October 27, 1947. A Dutch citizen. A Managing Director of the Company
since 1997 and President since 2000. A Group Managing Director since 1997.
Joined the Group in 1971 in refinery process design and held a number of
positions in refining and marketing in the Netherlands, Curaçao and the UK.
Area Co-ordinator Sub-Saharan Africa 199092 and a Managing Director of Shell
Nederland with responsibility for the Pernis refinery and petrochemical
complexes at Pernis and Moerdijk as well as the chemicals business 199295.
President and Chief Executive Officer of Shell Chemical Company in the USA
199597. A member of the Supervisory Board of De Nederlandsche Bank and an
Advisory Director to Unilever.

Malcolm Brinded

Born March 18, 1953. A UK citizen. A Managing Director of the Company since
July 2002. A Group Managing Director since July 2002. Joined the Group in 1974.
Held various positions in the Netherlands, Brunei, Oman and the UK. General
Manager of Shell U.K. Exploration and Production in Aberdeen 19982001.
Country Chairman in the UK 19992002. Director of Planning, Environment and
External Affairs at Shell International Ltd. 200102.

Walter van de Vijver

Born November 1, 1955. A Dutch citizen. A Managing Director of the Company
since 2001. A Group Managing Director since 2001. Joined the Group in 1979 as a
petroleum engineer. Worked in Exploration and Production in Qatar, Oman, the
USA, the UK and the Netherlands. General Manager Brent Business Unit of Shell
U.K. Exploration and Production in Aberdeen 199397. Chief Executive Officer
of Shell International Gas Ltd. and Chief Executive Officer of Shell Coal
International Ltd. in London 199798. President and Chief Executive Officer of
Shell Exploration & Production Company in the USA 19982001.

Supervisory Board
Aad JacobsChairman

Born May 28, 1936. A Dutch citizen. Chairman of the Supervisory Board since
July 2002 and a member of the Supervisory Board since 1998. Due to retire by
rotation in 2003. A member of the Board of Management of ING Group 199198 and
its Chairman 199298. Chairman of the Supervisory Boards of Joh. Enschedé and
Imtech. Vice-Chairman of the Supervisory Boards of Buhrmann and VNU and a
member of the Supervisory Boards of Euronext, IHC Caland and ING Group.

Maarten van den Bergh

Born April 19, 1942. A Dutch citizen. A member of the Supervisory Board since
2000. Due to retire by rotation in 2004.
A Managing Director of the Company 19922000 and President 19982000. A Group
Managing Director 19922000. Chairman of the Board of Directors of Lloyds TSB
and a member of the Boards of Directors of British Telecom and British Airways.

Jonkheer Aarnout Loudon

Born December 10, 1936. A Dutch citizen. A member of the Supervisory Board
since 1997. Due to retire in 2007. A member of the Board of Management of Akzo
(which became Akzo Nobel in 1994) 197794 and its Chairman 198294. A member
of the First Chamber of the Dutch Parliament 199599. Chairman of the
Supervisory Boards of ABN AMRO Bank and Akzo Nobel and a member of the
International Advisory Board of Allianz.

Professor Hubert Markl

Born August 17, 1938. A German citizen. A member of the Supervisory Board since
July 2002. Due to retire by rotation in 2007. President of the
Max-Planck-Gesellschaft 19962002. Professor of biology at the University of
Constance since 1974. A member of the Supervisory Boards of Aventis, BMW and
Münchener Rückversicherungsgesellschaft.

Professor Joachim Milberg

Born April 10, 1943. A German citizen. A member of the Supervisory Board since
2000. Due to retire by rotation in 2005. A member of the Board of Management of
BMW 19932002 and its Chairman 19992002. A member of the Supervisory Boards
of Allianz Versicherungs-AG, BMW, John Deere & Company and MAN.

Lawrence Ricciardi

Born August 14,1940. A US citizen. A member of the Supervisory Board since
2001. Due to retire by rotation in 2006. President of RJR Nabisco 199395.
Senior Vice-President and General Counsel of IBM 19952002. Senior Advisor to
Jones Day and Lazard Frères & Co. A member of the Board of Directors of The
Readers Digest Association.

64     Royal Dutch Petroleum Company





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Henny de Ruiter

Born March 3, 1934. A Dutch citizen. A member of the Supervisory Board since
1994. Due to retire in 2004. A Managing Director of the Company 198394. A
Group Managing Director 198394. Chairman of the Supervisory Boards of Royal
Ahold, Univar and Wolters Kluwer. Vice-Chairman of the Supervisory Board of
Aegon and a member of the Supervisory Board of Heineken.

Jan Timmer

Born February 20, 1933. A Dutch citizen. A member of the Supervisory Board
since 1996. Due to retire in 2003. President and Chairman of the Board of
Management of Royal Philips Electronics 199096. Chairman of the Supervisory
Board of PSV. A member of the Supervisory Board of ING Group.

General Attorney
Robbert van der Vlist

Born February 20, 1944. A Dutch citizen. Joined the Group in 1970 as a Legal
Adviser. General Attorney of the Company since 1987.

Nominations

The Supervisory Board and the Board of Directors will propose to the General
Meeting of Shareholders of Royal Dutch, to be held on April 23, 2003, to
appoint Rob Routs as a Managing Director of Royal Dutch with effect from July
1, 2003.

The Supervisory Board and the Board of Directors will propose to the General
Meeting of Shareholders of Royal Dutch, to be held on April 23, 2003, to
appoint Wim Kok to the Supervisory Board of Royal Dutch with effect from July
1, 2003.

Aad Jacobs will retire by rotation as member of the Supervisory Board effective
July 1, 2003, but it will be recommended to the General Meeting of Shareholders
that he be re-elected. Jan Timmer will retire as member of the Supervisory
Board effective July 1, 2003.

Relationships between members of
the Board of Management, members of the Supervisory Board and officers

There are no arrangements or understandings between Managing Directors, members
of the Supervisory Board or officers and any other person pursuant to which
they were selected as Managing Directors, members of the Supervisory Board or
officers.

There are no family relationships between any Managing Director, member of the
Supervisory Board or officer and any other Managing Director, member of the
Supervisory Board or officer.

Share Ownership

The interests in ordinary shares of Royal Dutch, including outstanding share
options, of the members of the Supervisory Board and the Managing Directors of
Royal Dutch at March 3, 2003, were:

|                          |  |                |         |                 |  |  |        | 
|------------------------- |  | -------------- | ------- | --------------- |  |  | ------ | 
|                          |  | Share optionsa |         | Ordinary shares
|                          |  |                |         |                
|Supervisory Board         |  |                |         |                 |  |  |        | 
|Aad Jacobs                |  |                |        |                 |  |  | 0      | 
|Maarten van den Berghb    |  |                | 37,950  |                 |  |  | 4,000  | 
|Jonkheer Aarnout Loudon   |  |                |        |                 |  |  | 75,000 | 
|Professor Hubert Markl    |  |                |        |                 |  |  | 0      | 
|Professor Joachim Milberg |  |                |        |                 |  |  | 0      | 
|Lawrence Ricciardi        |  |                |        |                 |  |  | 0      | 
|Henny de Ruiter           |  |                |        |                 |  |  | 0      | 
|Jan Timmer                |  |                |        |                 |  |  | 0      | 
|Managing Directors        |  |                |         |                 |  |  |        | 
|Jeroen van der Veer       |  |                | 270,850 |                 |  |  | 9,012  | 
|Malcolm Brinded           |  |                | 50,000  | c               |  |  | 2,500  | 
|Walter van de Vijver      |  |                | 187,000 |                 |  |  | 10,668 | 



---

|a |  | Additional information is included in the Notes to the Royal Dutch Financial
Statements under Remuneration  Long-term incentives on pages R8 and R9.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|b |  | No options are granted to members of the Supervisory Board, but options
may be outstanding to members who have formerly been a Managing Director.      
| 
|c |  | Excluding 713,900 options on Shell Transport shares.                                                                                                   

Royal Dutch Petroleum Company     65





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##### Table of Contents



Group Audit Committee

In 1976 the Supervisory Board of Royal Dutch, jointly with the Board of Shell
Transport, established a Group Audit Committee. Under its terms of reference,
the Committee acts in an advisory capacity to the Boards, providing them with
quarterly and annual updates regarding its activities and related
recommendations. The Committee regularly considers the effectiveness of risk
management processes and internal control within the Group and reviews the
financial accounts and reports of the Royal Dutch/Shell Group of Companies. The
Committee also considers both internal and external audit reports (including
the results of the examination of the Group Financial Statements) and assesses
the performance of internal and external audit.

The members appointed by the Supervisory Board of Royal Dutch are Aad Jacobs
(Chairman of the Committee), Henny de Ruiter and Jan Timmer; the members
appointed by the Board of Shell Transport are Sir Peter Burt, Luis Giusti and
Nina Henderson.

Remuneration and Succession Review Committee

In 1967 the Supervisory Board of Royal Dutch, jointly with the Board of Shell
Transport, established a Remuneration Committee. Following restatement of its
terms of reference in 1980, this Committee was renamed the Remuneration and
Succession Review Committee. The functions of the Committee are to make
recommendations on all forms of remuneration with respect to Group Managing
Directors and to review matters relating to the succession to the positions of
Group Managing Directors.

The members appointed by the Supervisory Board of Royal Dutch are Jonkheer
Aarnout Loudon (Chairman of the Committee), Professor Joachim Milberg and Henny
de Ruiter; the members appointed by the Board of Shell Transport are Nina
Henderson, Sir Peter Job and Sir Mark Moody-Stuart.

Social Responsibility Committee

In 1997 the Supervisory Board of Royal Dutch, jointly with the Board of Shell
Transport, established a Social Responsibility Committee. The Committee reviews
the policies and conduct of the Royal Dutch/Shell Group of Companies with
respect to the Groups Statement of General Business Principles as well as the
Groups Health, Safety and Environment Commitment and Policy.

The members appointed by the Supervisory Board of Royal Dutch are Maarten van
den Bergh, Jonkheer Aarnout Loudon and Jan Timmer. The members appointed by the
Board of Shell Transport are Teymour Alireza, Dr Eileen Buttle and Lord Oxburgh
(Chairman of the Committee).

Shell companies have long been open about the values and principles which guide
them, and the Groups Statement of General Business Principles has been
publicly available since 1976. The latest revision followed extensive internal
and external consultation. The Statement of General Business Principles
includes commitments to support fundamental human rights and to contribute to
sustainable development.

The Annual Report and Accounts 2002 is distributed together with a copy of The
Shell Report 2002  Meeting the energy challenge, which reviews how Group
companies are living up to the Groups Business Principles and contributing to
sustainable development.

Code of Ethics

For the guidance of principal executives and senior finance officers, a Code of
Ethics has been drawn up in conjunction with the Groups Statement of General
Business Principles. This Code of Ethics can be found on the Shell website (see
www.shell.com/codeofethics).

Compensation of Directors and Officers

The aggregate amount of remuneration paid to or accrued for all members of the
Supervisory Board, the Managing Directors and officers of Royal Dutch as a
group by Royal Dutch and companies of the Royal Dutch/Shell Group of Companies
for services in all capacities during the fiscal year ended December 31, 2002,
was 8,294,688. In addition, 1,135,727 was paid during 2002 for service during
the fiscal year ended December 31, 2001. The aggregate amount set aside to
provide pension, retirement and similar benefits for Managing Directors and
officers of Royal Dutch by Royal Dutch and companies of the Royal Dutch/Shell
Group of Companies during the fiscal year ended December 31, 2002, was a credit
of 163,788. Reference is made to the information given in the Remuneration
section on pages R7 to R13 relating to emoluments of the members of the Board
of Management and the Supervisory Board.

None of the Managing Directors and members of the Supervisory Board of Royal
Dutch have service contracts with Royal Dutch, their employing company or any
other Group company providing for benefits upon termination.

66     Royal Dutch Petroleum Company





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##### Table of Contents






SHARES UNDER OPTION AND SHARE PURCHASE PLAN

Three Group companies, one in the Netherlands (Shell Petroleum N.V.), one in
the United Kingdom (The Shell Petroleum Company Limited) and one in the United
States of America (Shell Oil Company) have stock option plans under which
options have been or may be granted to executives and other employees of those
and other Group companies. Options granted under these plans are for terms of
not more than five or ten years at an exercise price of not less than the
market value on the date of granting the option.

The securities of Royal Dutch involved in the plans as of March 3, 2003, are
30,006,028 issued and outstanding ordinary shares.

The number of ordinary shares of Royal Dutch under option at March 3, 2003, and
the option prices of the shares at the dates the options were granted, per
share and in total, were as follows:

|                                    |  |                  |            |           |  |                 |        |                    |  |  |              |  |  |                     |  | 
|----------------------------------- |  | ---------------- | ---------- | --------- |  | --------------- | ------ | ------------------ |  |  | ------------ |  |  | ------------------- |  | 
|Plan                                |  |                  |            |           |  | Exercise pricea |        |                    |  | 
|                                    |  |                  |            |           |  |                 |        |                    |  | 
|                                    |  | Number of shares |            | Average   |  |                 |        | Term              
|                                    |  | under option     |            | per share |  | Total           |        | (expiration dates)
|                                    |  |                  |            |           |  |                 |        |                   
|Shell Petroleum N.V                 |  |                  | 12,689,390 |           |  |                 | 60.31 |                    |  |  | 765,344,026 |  |  | 10 years           
|                                    |  |                  |            |           |  |                 |        |                    |  |  |              |  |  | (10/12/0713/11/12)
|The Shell Petroleum Company Limited |  |                  | 6,249,361  |           |  |                 | 59.69 |                    |  |  | 373,037,036 |  |  | 10 years           
|                                    |  |                  |            |           |  |                 |        |                    |  |  |              |  |  | (10/12/0713/11/12)
|Shell Oil Company                   |  |                  | 3,460,272  |           |  |                 | $52.95 |                    |  |  | $183,226,608 |  |  | 10 years           
|                                    |  |                  |            |           |  |                 |        |                    |  |  |              |  |  | (01/03/1021/12/10)
|Shell Petroleum Inc.                |  |                  | 10,919,958 |           |  |                 | $56.75 |                    |  |  | $619,727,128 |  |  | 10 years           
|                                    |  |                  |            |           |  |                 |        |                    |  |  |              |  |  | (01/03/1014/11/12)



---

|a |  | Euro-denominated exercise prices prior to the fixing of the euro conversion
rate in January 1999 are derived from the quotient of guilder prices and the
fixed guilders-per-euro conversion rate of 2.20371.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Global Employee Share Purchase Plan enables employees to make
contributions, which are applied quarterly to purchase Royal Dutch or Shell
Transport Shares at current market value. If the acquired shares are retained
in the plan until the end of the twelve-month cycle the employee receives an
additional 15% share match. In the USA a variant of this plan is operated where
contributions are applied to buy Royal Dutch Shares at the end of the
twelve-month cycle. The purchase price is the lower of the market price on the
first or last trading day of the cycle reduced by 15%. Group Managing Directors
are not eligible to participate in the Global Employee Share Purchase Plan. At
March 3, 2003, Group companies held 3,302 Royal Dutch ordinary shares (2002:
25,927) in connection with this plan.

No issue of new shares is involved under any of the plans mentioned above.




CONTROLS AND PROCEDURES

As of 25 February 2003 (the Evaluation Date) Royal Dutch conducted an
evaluation (under the supervision and with the participation of the Committee
of Managing Directors), pursuant to Rule 13a-15 promulgated under the
Securities Exchange Act of 1934, as amended (the Exchange Act), of the
effectiveness of the design and operation of the Royal Dutch disclosure
controls and procedures. Based on this evaluation, the President and Managing
Director of Royal Dutch and the Director of Finance concluded that as of the
Evaluation Date such disclosure controls and procedures were reasonably
designed to ensure that information required to be disclosed by Royal Dutch in
reports it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the rules and
forms of the Securities and Exchange Commission.

Since the Evaluation Date, there have not been any significant changes in the
internal controls or in other factors that could significantly affect the
internal controls.

Royal Dutch Petroleum Company     67





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##### Table of Contents






The Shell Transport and
Trading Company,
Public Limited Company




CONTROL OF REGISTRANT

Shell Transport is not directly or indirectly owned or controlled by another
corporation or by any government. As of March 3, 2003, there were the following
interests in more than 3% of the issued Ordinary share capital of Shell
Transport. Barclays PLC (more than 3% but less than 4%); this interest has
subsisted since December 2002. Legal & General Group Plc (more than 3% but less
than 4%); this interest has subsisted since January 2003. Between May 2001 and
March 2002 The Capital Group Companies Inc. held more than 3% but less than 4%
of the issued Ordinary share capital. Prudential plc held more than 3% but less
than 4% of the issued Ordinary share capital between March 1998 and March 1999.
As of March 3, 2003 the Directors and officers of Shell Transport beneficially
owned in aggregate (including shares under option) less than 1% of the total
shares of that class outstanding. See Management  Share Ownership on page
76.




NATURE OF TRADING MARKET

The principal trading market for the Ordinary shares of Shell Transport is the
London Stock Exchange. Shell Transport Ordinary shares are also listed and
traded on stock exchanges in Belgium, France and Germany. Shell Transport
Ordinary shares are traded in registered or bearer form, but predominantly in
registered form.

American Depositary Receipts representing New York Shares are listed and traded
on the New York Stock Exchange and are also admitted to unlisted trading
privileges on the Boston, Cincinnati, Midwest, Pacific and Philadelphia Stock
Exchanges. The depositary receipts are issued and exchanged at the office of
The Bank of New York, 101 Barclay Street, New York, NY 10286, as depositary
under a deposit agreement between Shell Transport and the depositary and the
holders of receipts.

Each New York Share represents six 25p Ordinary shares of Shell Transport
deposited under the deposit agreement. At March 3, 2003, there were outstanding
48,414,148 New York Shares representing approximately 3.00% of the Ordinary
share capital of Shell Transport, held by 1,876 holders of record.

At March 3, 2003 there were 3,320,907 Ordinary shares of 25p each representing
approximately 0.03% of the Ordinary share capital of Shell Transport held by
884 holders of record registered with an address in the United States.

The following tables set forth the high and low closing sales prices for Shell
Transports registered Ordinary shares (of 25p nominal value) on the London
Stock Exchange and for Shell Transports New York Shares (of £1.50 nominal
value) on the New York Stock Exchange for the periods specified:

|       |  |        |      |          |  |      |      |  |  |  |       |     |  |  |  |  |  |  |       | 
|------ |  | ------ | ---- | -------- |  | ---- | ---- |  |  |  | ----- | --- |  |  |  |  |  |  | ----- | 
|       |  | London |      | New York
|       |  |        |      |         
|       |  | High   |      | Low      |  | High |      |  |  |  |       | Low
|Period |  | £      |      | £        |  | $    |      |  |  |  |       | $  
|       |  |        |      |          |  |      |      |  |  |  |       |    
|1998   |  |        | 4.64 |          |  |      | 3.16 |  |  |  | 46.50 |     |  |  |  |  |  |  | 31.00 | 
|1999   |  |        | 5.41 |          |  |      | 3.04 |  |  |  | 52.56 |     |  |  |  |  |  |  | 30.50 | 
|2000   |  |        | 6.27 |          |  |      | 4.12 |  |  |  | 54.06 |     |  |  |  |  |  |  | 40.00 | 
|2001   |  |        | 6.38 |          |  |      | 4.30 |  |  |  | 53.65 |     |  |  |  |  |  |  | 38.72 | 
|2002   |  |        | 5.41 |          |  |      | 3.70 |  |  |  | 47.03 |     |  |  |  |  |  |  | 34.59 | 

|            |  |        |      |          |  |      |      |  |  |  |       |     |  |  |  |  |  |  |       | 
|----------- |  | ------ | ---- | -------- |  | ---- | ---- |  |  |  | ----- | --- |  |  |  |  |  |  | ----- | 
|            |  | London |      | New York
|            |  |        |      |         
|            |  | High   |      | Low      |  | High |      |  |  |  |       | Low
|Period      |  | £      |      | £        |  | $    |      |  |  |  |       | $  
|            |  |        |      |          |  |      |      |  |  |  |       |    
|2001        |  |        |      |          |  |      |      |  |  |  |       |     |  |  |  |  |  |  |       | 
|1st Quarter |  |        | 6.01 |          |  |      | 5.25 |  |  |  | 52.44 |     |  |  |  |  |  |  | 46.35 | 
|2nd Quarter |  |        | 6.38 |          |  |      | 5.39 |  |  |  | 53.65 |     |  |  |  |  |  |  | 45.70 | 
|3rd Quarter |  |        | 6.00 |          |  |      | 4.30 |  |  |  | 50.97 |     |  |  |  |  |  |  | 38.72 | 
|4th Quarter |  |        | 5.49 |          |  |      | 4.49 |  |  |  | 47.90 |     |  |  |  |  |  |  | 39.38 | 
|2002        |  |        |      |          |  |      |      |  |  |  |       |     |  |  |  |  |  |  |       | 
|1st Quarter |  |        | 5.26 |          |  |      | 4.51 |  |  |  | 44.87 |     |  |  |  |  |  |  | 38.48 | 
|2nd Quarter |  |        | 5.41 |          |  |      | 4.67 |  |  |  | 47.03 |     |  |  |  |  |  |  | 41.99 | 
|3rd Quarter |  |        | 5.09 |          |  |      | 3.70 |  |  |  | 46.70 |     |  |  |  |  |  |  | 34.59 | 
|4th Quarter |  |        | 4.28 |          |  |      | 3.81 |  |  |  | 40.02 |     |  |  |  |  |  |  | 35.56 | 

68     The Shell Transport and Trading Company, Public Limited Company





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##### Table of Contents



|          |  |        |      |          |  |      |      |     |  |  |       |  |  |  |       | 
|--------- |  | ------ | ---- | -------- |  | ---- | ---- | --- |  |  | ----- |  |  |  | ----- | 
|          |  | London |      | New York
|          |  |        |      |         
|          |  | High   |      | Low      |  | High |      | Low
|Period    |  | £      |      | £        |  | $    |      | $  
|          |  |        |      |          |  |      |      |    
|2002      |  |        |      |          |  |      |      |     |  |  |       |  |  |  |       | 
|July      |  |        | 5.09 |          |  |      | 3.80 |     |  |  | 46.70 |  |  |  | 35.30 | 
|August    |  |        | 4.60 |          |  |      | 4.06 |     |  |  | 41.85 |  |  |  | 37.27 | 
|September |  |        | 4.34 |          |  |      | 3.70 |     |  |  | 39.23 |  |  |  | 34.59 | 
|October   |  |        | 4.28 |          |  |      | 3.81 |     |  |  | 40.02 |  |  |  | 35.56 | 
|November  |  |        | 4.19 |          |  |      | 3.99 |     |  |  | 39.33 |  |  |  | 37.34 | 
|December  |  |        | 4.16 |          |  |      | 3.91 |     |  |  | 38.96 |  |  |  | 37.43 | 
|2003      |  |        |      |          |  |      |      |     |  |  |       |  |  |  |       | 
|January   |  |        | 4.21 |          |  |      | 3.50 |     |  |  | 41.05 |  |  |  | 34.40 | 
|February  |  |        | 3.79 |          |  |      | 3.45 |     |  |  | 36.99 |  |  |  | 34.01 | 

At March 3, 2003 there were 350 First Preference shares of £1 each representing
approximately 0.01% of the issued shares of the class held by 2 holders of
record registered with an address in the United States of America. At the same
date there were 1,375 Second Preference shares of £1 each representing
approximately 0.01% of the issued shares of the class held by 7 holders of
record registered with an address in the United States of America. (Reference
is made to page S7 for additional information on the Preference shares).




MEMORANDUM AND ARTICLES OF ASSOCIATION

The following summarises certain provisions of Shell Transports Memorandum and
Articles of Association and of English law. This summary is qualified in its
entirety by reference to the UK Companies Act of 1985, as amended (the
Companies Act), and Shell Transports Memorandum and Articles of Association.
Copies of Shell Transports Memorandum and Articles of Association have been
filed as an exhibit to this Annual Report on Form 20-F.

General

Shell Transport was incorporated in England on October 18, 1897 under
registered number 54485 for the purpose of carrying on the business of
producing, refining, storage, transport, supply and distribution of petroleum
and petroleum products as set forth in clause 4 of Shell Transports Memorandum
of Association.

Directors

Under the Articles of Association of Shell Transport:



|(1) |  | a Director shall not vote or be counted in the quorum in respect of any
matter in which he is materially interested including any matter related to his
own compensation;                                                                                                                                                  
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | the Directors may exercise Shell Transports power to borrow provided that
the borrowings of Shell Transport and its subsidiaries (if any) shall not
without the consent of an ordinary resolution of shareholders of Shell
Transport exceed the nominal amount of the issued and paid-up share capital of
Shell Transport;
|   
|(3) |  | Directors over age 70 must retire at each Annual General Meeting, but are
eligible for re-election;                                                                                                                                                                                                                        
|   
|(4) |  | Directors are not required to hold shares of Shell Transport to be
qualified.                                                                                                                                                                                                                                              

Rights attaching to shares



|(a) |  | Dividend rights and rights to share in the companys profits
|--- |  | ------------------------------------------------------------

Under English law, dividends are payable on Shell Transports shares only out
of profits available for distribution, as determined in accordance with
accounting principles generally accepted in the United Kingdom and by the
Companies Act. Holders of Shell Transports Ordinary shares are entitled to
receive such dividends as may be declared by the shareholders in general
meeting, rateably according to the amounts paid up on such shares, provided
that the dividend cannot exceed the amount recommended by the Directors.

The Shell Transport and Trading Company, Public Limited Company     69





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##### Table of Contents



Shell Transports Board of Directors may pay holders of Ordinary shares such
interim dividends as appear to it to be justified by Shell Transports
financial position. If authorised by an ordinary resolution of the
shareholders, the Board of Directors may also make payment of a dividend in
whole or in part by the distribution of specific assets (and in particular of
paid-up shares or debentures of any other company).

Any dividend unclaimed after 12 years from the date the dividend was due for
payment will be forfeited and will revert to Shell Transport.

The holders of Ordinary shares have unrestricted rights to participate in
distributions of dividend and capital subject to the rights of the holders of
the First Preference shares and Second Preference shares as described below.

The First and Second Preference shares (the Preference shares) confer on the
holders the right to a fixed cumulative dividend and rank in priority to
Ordinary shares. The fixed dividend on the First Preference shares is payable
at the rate of 5.5% per annum and the fixed dividend on the Second Preference
shares is payable at the rate of 7% per annum. On a winding-up or repayment the
Preference shares also rank in priority to the Ordinary shares for the nominal
value of £1 per share (plus a premium, if any, equal to the excess of the daily
average price for the respective shares quoted in the London Stock Exchange
Daily Official List for a six month period preceding the repayment or
winding-up) but do not have any further rights of participation in the profits
or assets of Shell Transport.

(b)  Voting rights and General
Meetings of Shareholders
The holders of Ordinary shares have the right to attend and vote at all General
Meetings of the shareholders of Shell Transport.

Voting at any General Meeting of Shareholders is by a show of hands unless a
poll, which is a written vote, is duly demanded. On a show of hands, every
shareholder entitled to vote, who is present in person, has one vote regardless
of the number of shares held. On a poll, every shareholder who is present in
person or by proxy has one vote for every £1 in nominal amount of shares held
by that shareholder.

A poll may be demanded by any of the following:



| |  | the chairman of the meeting;                                                                                                                                                                                                                                                                                  
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | at least five shareholders entitled to vote at the meeting;                                                                                                                                                                                                                                                   
| 
| |  | any shareholder or shareholders representing in the aggregate not less than
one-tenth of the total voting rights of all shareholders entitled to vote at
the meeting; or                                                                                                                                      
| 
| |  | any shareholder or shareholders holding shares conferring a right to vote at
the meeting on which there have been paid-up sums in the aggregate equal to not
less than one-tenth of the total sum paid up on all the shares conferring that
right or such shares with a nominal value of not less than £3,000.

A proxy form will be treated as giving the proxy the authority to demand a
poll, or to join others in demanding one.

The necessary quorum for a general meeting is ten persons carrying a right to
vote upon the business to be transacted, whether present in person or by proxy.

Matters are transacted at General Meetings of Shareholders by the proposing and
passing of resolutions of which there are three kinds:



| |  | an ordinary resolution, which includes resolutions for the election of
Directors, the approval of financial statements, the payment of dividends, the
appointment of auditors, the increase of authorised share capital or the grant
of authority to allot shares;
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | a special resolution, which includes resolutions amending Shell Transports
Memorandum and Articles of Association, disapplying statutory pre-emption
rights or changing Shell Transports name; and                                                              
| 
| |  | an extraordinary resolution, which includes resolutions modifying the rights
of any class of Shell Transports shares at a meeting of the holders of such
class or relating to certain matters concerning Shell Transports winding up.                           

70     The Shell Transport and Trading Company, Public Limited Company





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##### Table of Contents



An ordinary resolution requires the affirmative vote of a majority of the votes
of those persons voting at a meeting at which there is a quorum.

Special and extraordinary resolutions require the affirmative vote of not less
than three-fourths of the persons voting at a meeting at which there is a
quorum.

In the case of an equality of votes, whether on a show of hands or on a poll,
the chairman of the meeting is entitled to cast the deciding vote in addition
to any other vote he may have.

Annual General Meetings must be convened upon advance written notice of 21
days. Other meetings must be convened upon advance written notice of 21 days
for the passing of a special resolution and 14 days for any other resolution.
The notice must specify the nature of the business to be transacted. The Board
of Directors may if they choose make arrangements for shareholders who are
unable to attend the place of the meeting to participate at other places.

Under English law, the Directors must convene an extraordinary general meeting
of a company on the requisition of members holding not less than one-tenth of
such paid-up capital of the company as carries the right of voting at general
meetings of the company.

Preference shares do not have voting rights unless their dividend is in arrears
or the proposal concerns a reduction of capital, winding-up, an alteration of
the Articles of Association or otherwise directly affects their class rights.



|(c) |  | Rights in a winding-up
|--- |  | ----------------------

Upon Shell Transports winding-up, the balance of assets available for
distribution:



| |  | after the payment of all creditors including certain preferential creditors,
whether statutorily preferred creditors or normal creditors; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | subject to the rights attached to the First and Second Preference shares (see
Dividend rights and rights to share in the companys profitson pages 69 and
70) and to any special rights attaching to any other class of shares, of which
there are currently none, is to be distributed among the holders of Ordinary
shares according to the amounts paid-up on the shares held by them. This
distribution is generally to be made in cash. A liquidator may, however, upon
the adoption of an extraordinary resolution of the shareholders, divide among
the shareholders the whole or any part of Shell Transports assets in kind.



|(d) |  | Redemption provisions
|--- |  | ---------------------

The Ordinary shares and the Preference shares are not subject to any redemption
provisions.



|(e) |  | Sinking fund provisions
|--- |  | -----------------------

Neither the Ordinary shares nor the Preference shares are subject to any
sinking fund provision under Shell Transports Memorandum and Articles of
Association or as a matter of English law.



|(f) |  | Liability to further calls
|--- |  | --------------------------

No holder of Shell Transports shares will be required to make additional
contributions of capital in respect of Shell Transports shares in the future.



|(g) |  | Discriminating provisions
|--- |  | -------------------------

There are no provisions discriminating against a shareholder because of his
ownership of a particular number of shares.

Variation of rights

The rights attached to any class may be varied, subject to the provisions of
the Companies Act, with the consent in writing of holders of three-fourths in
value of the shares of that class or upon the adoption of an extraordinary
resolution passed at a separate meeting of the holders of the shares of that
class. At every such separate meeting, all of the provisions of the Articles of
Association relating to proceedings at a general meeting apply, except that the
quorum is to be the number of persons who hold or represent by proxy not less
than one-third in nominal value of the issued shares of the class.
These provisions are not more stringent than required by law in England.

The Shell Transport and Trading Company, Public Limited Company     71



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##### Table of Contents



Limitations on rights to own shares

There are no limitations imposed by English law or Shell Transports Memorandum
or Articles of Association on the rights to own shares, including the right of
non-residents or foreign persons to hold or vote Shell Transports shares,
other than limitations that would generally apply to all of Shell Transports
shareholders.

Change of control

There are no provisions in the Memorandum or Articles of Association of Shell
Transport or of corporate legislation in England that would delay, defer or
prevent a change of control.

Threshold for disclosure of share ownership

English law requires disclosure by beneficial owners of 3% or more of the
voting share capital of a company listed on a Stock Exchange in the European
Union or the European Economic Area to notify their interest to the company.
English law also enables a company to require a shareholder to confirm whether
he holds the shares as beneficial owner and if not to name the beneficial owner
or owners. Under the Articles of Association of Shell Transport, if Shell
Transport has not received a response to a statutory notice requiring
disclosure of the beneficial owner of shares in Shell Transport within 14 days
of issue the Directors may determine that the shareholder holding the shares in
question should be subject to restrictions in respect of those shares. The
restrictions may be one or more of the following:



|(i) |  | withdrawal of right to attend and vote at general meetings;
|--- |  | -----------------------------------------------------------



|(ii) |  | no transfer shall be
registered in respect of the shares;
|---- |  | ---------------------------------------------------------



|(iii) |  | no dividend shall be paid in respect of the
shares.
|----- |  | ---------------------------------------------------

Capital changes

The conditions imposed by Shell Transports Memorandum and Articles of
Association for changes in capital are not more stringent than required by
English law.

New York Shares (American Depositary Receipts)

One New York Share is equivalent to six Ordinary shares of 25p each. The agent
of the Depositary is the registered shareholder and enjoys the rights of a
shareholder under the Memorandum and Articles of Association; the rights of the
holder of a New York share are specified in the agreement with the Depositary.




EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS

There is no legislative or other legal provision currently in force in the
United Kingdom or arising under the constituent documents of Shell Transport
restricting remittances to non-resident holders of Shell Transports securities
or affecting the import or export of capital for use by Shell Transport or UK
Group companies.




TAXATION

Dividends and Tax Credit

Individual shareholders resident in the UK are entitled to receive a tax credit
with dividends received from Shell Transport. The amount of the credit is equal
to 10/90ths of the cash dividend. The credit is not repayable in cash when it
exceeds the shareholders UK tax liability.

There is generally no withholding tax on UK dividends.

Under the current Double Taxation Conventions between the United Kingdom and
both the United States and Canada, a US or Canadian resident holder of American
Depositary Receipts (ADRs) will (so long as a UK resident individual
shareholder is entitled to a tax credit) be entitled to receive an amount equal
to the tax credit less UK income tax of up to 15% of the combined amount of the
dividend and such tax credit (provided the shares on which the dividend is paid
are not effectively connected with a permanent establishment of the shareholder
in the UK).

72     The Shell Transport and Trading Company, Public Limited Company





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2002 Dividends

US and Canadian resident shareholders will be entitled to a tax credit
repayment under the Double Taxation Convention at a rate of 11.11% of the cash
dividend, but subject to a withholding tax of 15% based on the combined amount
of the dividend and tax credit, with the result that the amount of the
repayment will be zero. (It cannot go negative.)

Dividends received by a US shareholder will represent dividend income not
eligible for the dividends received deduction allowed to corporations. By
default, US shareholders will be taxed on the amount of dividend actually
received. However, a US shareholder may elect to be treated as having paid UK
withholding tax (at an 11.11% rate) with respect to the receipt of such
dividends. As a result of such a choice, any such withholding tax would be
treated as increasing the amount of the dividend received by the US
shareholder, and subject to certain limitations, may be claimed as a credit or
deduction for US Federal income tax purposes.

The entitlement to a tax credit of a shareholder who is resident neither in the
UK nor in the USA depends upon such double tax arrangements as exist between
the UK and the country of the shareholders residence.

Taxation on Capital Gains

Under the current Double Taxation Convention between the United States and the
United Kingdom, capital gains of residents of the USA may be taxed in
accordance with the provisions of UK domestic law. Under present UK law,
residents of the USA who are not resident and not ordinarily resident in the UK
will not be liable for UK taxation on capital gains made on the disposal of
their shares unless the shares are held in connection with a trade or business
carried on in the UK through a branch or agency.

Inheritance Tax

Under the current Estate and Gift Tax Convention between the United States and
the United Kingdom, Ordinary shares held by an individual who is domiciled for
the purpose of the Convention in the USA and is not for the purpose of the
Convention a national of the UK will not be subject to UK inheritance tax on
the individuals death or on a gift of the shares in the seven years prior to
death unless the shares are part of the business property of a permanent
establishment of the individual in the UK, or, in the case of a shareholder who
performs independent personal services, pertain to a fixed base situated in the
UK.

Stamp Duty Reserve Tax

The United Kingdom Government currently imposes a 1.5% stamp duty reserve tax
on the creation of new depository receipts representing shares of UK companies.
The tax does not apply to the purchase and subsequent transfer of depository
receipts already in issue, nor where the holder surrenders an existing
depository receipt in exchange for the underlying shares. In the case of New
York shares represented by ADRs issued on or after March 18, 1991 by the Bank
of New York, the depository under the deposit agreement referred to in the
third paragraph under the Item entitled Nature of trading market on page 68,
the tax payable is calculated on the value of the underlying registered shares
at the date such shares are transferred to the Bank of New York.




MANAGEMENT

The business of Shell Transport is managed by a Board of Directors of not less
than three and not more than 20 in number. There are 11 Directors in office, of
whom two are Managing Directors. Managing Directors are appointed by the Board
from among the members of the Board. Pursuant to Shell Transports Articles of
Association, a minimum of one third of the Directors (or if their number is not
a multiple of three, the number nearest to one third) shall retire by rotation
at each Annual General Meeting of Shareholders. The Directors to retire by
rotation on each occasion shall be those of the Directors who held office at
the time of the two preceeding annual general meetings and who did not retire
at either of them. If the number of Directors so retiring is less than the
minimum additional Directors up to that number shall retire. The additional
Directors to retire on each occasion shall be the Directors who have been
longest in office, and if some Directors have been in office for an equal
period of time, the Director(s) to retire shall (unless they otherwise agree
between themselves) be chosen by lot. In 2003 four Directors will retire at the
Annual General Meeting in accordance with these
arrangements. Directors appointed by the Board vacate office at the next Annual
General Meeting and offer themselves for election. Under the Articles of
Association of Shell Transport such new Directors are not included in the
number of Directors liable to retire by rotation at the next Annual General
Meeting. Sir Peter Burt and Sir John Kerr will be vacating office and offering
themselves for election at the Annual General Meeting in accordance with this
provision.

The Shell Transport and Trading Company, Public Limited Company     73





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The Directors, Managing Directors and officers of Shell Transport at March 3,
2003, were:

Managing Directors
Sir Philip WattsKCMG Chairman

Born June 25, 1945. A UK citizen. A Director and a Managing Director of Shell
Transport since July 1, 1997 and Chairman since July 1, 2001. A Group Managing
Director since 1997. Joined the Group as a seismologist in 1969, and held
positions in Asia Pacific and Europe leading to Exploration Director, Shell UK
198385. Head of various Exploration and Production functions in The Hague
198591. Chairman and Managing Director in Nigeria 199194, and Regional
Co-ordinator, Europe 199495. Director Planning, Environment and External
Affairs, Shell International 199697. Chief Executive Officer, Exploration and
Production 19972001. Currently Chairman of the Executive Committee of the
World Business Council for Sustainable Development. Also Chairman of the
International Chamber of Commerces UK governing body and Trustee of the Saïd
Business School Foundation, University of Oxford.

Paul Skinner

Born December 24, 1944. A UK citizen. A Director and a Managing Director of
Shell Transport and a Group Managing Director since January 1, 2000. Chief
Executive Officer, Oil Products since 1999. Joined the Group as a student in
1963 and then worked in Chemicals from 1966 in sales and marketing assignments
in the UK, Greece and Nigeria. Moved to the oil business in 1979, holding a
succession of senior roles in the UK, New Zealand and Norway. President, Shell
International Trading Company, 199195 and additionally responsible for the
shipping business 199596. Director, Strategy and Business Services, Oil
Products 199698. President, Shell Europe Oil Products 199899. Currently a
non-executive Director of Rio Tinto plc and Rio Tinto Limited and a member of
the Board of INSEAD, the European/Asian business school.

Non-executive Directors
Teymour Alireza

Born September 7, 1939. A Saudi
Arabian citizen. A Director of Shell Transport
since November 12, 1997. President and Deputy Chairman, The Alireza Group.
Chairman National Pipe Company Ltd, Saudi Arabia. Director Arabian Gulf
Investments (Far East) Ltd, Hong Kong and of Riyad Bank Saudi Arabia. Member of
the International Board of Trustees of the World Wide Fund for Nature.

Sir Peter BurtFRSE

Born March 6, 1944. A UK citizen. A Director of Shell Transport since July 25,
2002. Executive Deputy Chairman of HBOS plc and Governor of the Bank of
Scotland 200103. Group Chief Executive of Bank of Scotland 19962001. Joined
the Bank of Scotland in 1975. Chief General Manager of the Bank 198896.
Worked in the computer industry in the USA and the UK 196874. A Director of a
number of charitable organisations.

Dr Eileen ButtleCBE

Born October 19, 1937. A UK citizen. A Director of Shell Transport since July
8, 1998. Retired in 1994 from a career of public scientific appointments.
Member of a number of Government and EU advisory committees of environmental
aspects of national and European research and of Boards of Trustees of
environmental non-governmental organisations.

Luis Giusti

Born November 27, 1944. A Venezuelan citizen. A Director of Shell Transport
since September 13, 2000. Joined the Venezuelan Shell oil company in 1966, and
the Venezuelan state oil company, Petroleos de Venezuela, SA (PDVSA) in 1976.
Chairman and CEO of PDVSA 199499. Currently a Senior Adviser at the Center
for Strategic and International Studies in Washington DC and also acts as a
consultant in oil and energy.

Mary (Nina) Henderson

Born July 6, 1950. A US citizen. A Director of Shell Transport since May 17,
2001. 19722001 wide experience in marketing consumer goods with Bestfoods, a
major US foods company, rising to President of a major division and Corporate
Vice President responsible for worldwide core business development. Currently a
non-executive Director of Pactiv Corporation, AXA Financials Inc., Del Monte
Foods Company and Visiting Nurse Service of New York.

74     The Shell Transport and Trading Company, Public Limited Company





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Sir Peter JobKBE

Born July 13, 1941. A UK citizen.
A Director of Shell Transport since August 2,
2001. Chief Executive of Reuters plc, 19912001 following wide experience in
that company from 1963 in Latin America, Africa, Asia and the Middle East.
Currently a non-executive Director of Schroders plc, GlaxoSmithKline plc, TIBCO
Software Inc, Instinet Group Inc, Multex.com, Inc and a member of the
Supervisory Board of Deutsche Bank AG and of Bertelsmann AG.

Sir John KerrGCMG

Born February 22, 1942. A UK citizen. A Director of Shell Transport since July
25, 2002. Member of United Kingdom Diplomatic Service 19662002 and Head of
the Service 19972002. Principal Private Secretary to the Chancellor of the
Exchequer 198184. UK Permanent Representative to the EU 199095. British
Ambassador to the United States 199597. Foreign Office Permanent Under
Secretary of State 19972002. Secretary-General of the Convention, chaired by
President Giscard dEstaing, on future EU institutional arrangements. Currently
a non-executive Director of Scottish American Investment Trust plc; Trustee of
National Gallery and of Rhodes Trust.

Sir Mark Moody-StuartKCMG

Born September 15, 1940. A UK citizen. A Director pf Shell Transport since July
1, 1991. Chairman 19972001 and a Group Managing Director 19912001. A
non-executive Director since July, 2001. Currently Chairman of Anglo American
plc and a Director of HSBC Holdings plc and Accenture. Member of the UN
Secretary Generals Advisory Council for the Global Compact.

Lord OxburghKBE FRS

Born November 2, 1934. A UK citizen. A Director of Shell Transport since
January 10, 1996. Scientific and University appointments 196088. Chief
Scientific Adviser, Ministry of Defence 198893. Rector, Imperial College of
Science, Technology and Medicine, 19932001. Currently Chairman SETNET and
Chairman House of Lords Select Committee on Science and Technology.

Company Secretary
Jyoti Munsiff

Joined the Group in 1969 as a Legal Adviser. Appointed Company Secretary in
1993.

Directors offering themselves for election or re-election

The Directors retiring by rotation at the Annual General Meeting to be held on
April 23, 2003 are: Sir Philip Watts, Mr Teymour Alireza, Sir Mark Moody-Stuart
and Mr Paul Skinner. All will offer themselves for re-election. Sir Peter Burt
and Sir John Kerr were appointed as Directors by the Board with effect from
July 25, 2002 and will be vacating office and offering themselves for election
by the shareholders at the Annual General Meeting.

The Board will recommend to the Annual General Meeting the election of Ms
Judith Boynton as a Director of the Company with effect from July 1, 2003, it
is intended that she will be appointed a Managing Director of the Company. Ms
Boynton is currently the Director of Finance and Chief Financial Officer for
the Royal Dutch/Shell Group of Companies, which roles she will retain.

Mr Paul Skinner will be retiring after 40 years service with the Royal
Dutch/Shell Group of Companies on September 30, 2003.

Arrangements and/or relationships between Directors and officers

There are no arrangements or understandings between Directors or officers and
any other person pursuant to which they were selected as Directors or officers.
There are no family relationships between any Director or executive officer and
any other Director or executive officer.

The Shell Transport and Trading Company, Public Limited Company75



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Share Ownership

Directors of Shell Transport had the following beneficial interests in Shell
Transport at March 3, 2003:

|                        |  |                |           |                     |  |  |         | 
|----------------------- |  | -------------- | --------- | ------------------- |  |  | ------- | 
|                        |  | Share Optionsa |           | 25p Ordinary shares
|                        |  |                |           |                    
|Managing Directors      |  |                |           |                     |  |  |         | 
|Sir Philip Watts        |  |                | 2,003,001 |                     |  |  | 66,723  | 
|Paul Skinner            |  |                | 1,803,151 |                     |  |  | 60,502  | 
|Non-executive Directors |  |                |           |                     |  |  |         | 
|Teymour Alireza         |  |                |          |                     |  |  | 29,093  | 
|Sir Peter Burt          |  |                |          |                     |  |  | 10,000  | 
|Dr Eileen Buttle        |  |                |          |                     |  |  | 3,400   | 
|Luis Giusti             |  |                |          |                     |  |  |        | 
|Nina Henderson          |  |                |          |                     |  |  | 9,000   | 
|Sir Peter Job           |  |                |          |                     |  |  |        | 
|Sir John Kerr           |  |                |          |                     |  |  | 10,000  | 
|Sir Mark Moody-Stuart   |  |                | 927,800   |                     |  |  | 600,000 | 
|Lord Oxburgh            |  |                |          |                     |  |  | 5,829   | 
|                        |  |                |           |                     |  |  |         | 



---

|a |  | Additional information is included in the Notes to the
Shell Transport Financial Statements under Remuneration
Report  Share options on page S14.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------

Directors share interests in Shell Transport under the Deferred Bonus Planb

The interests of Directors in the Ordinary shares of Shell Transport pursuant
to the Deferred Bonus Plan at March 3, 2003:

|                 |  |                     |        |          |  |              |        |              |  |  |        |  |  |  |          | 
|---------------- |  | ------------------- | ------ | -------- |  | ------------ | ------ | ------------ |  |  | ------ |  |  |  | -------- | 
|                 |  | 25p Ordinary shares
|                 |  |                    
|                 |  |                     |        |          |  | Matching/    |        |              |  |  |        |  |  | 
|                 |  | 2001 Bonus          |        | dividend |  | Total        |        |              |  | 
|                 |  | deferred            |        | awards   |  | Dec 31, 2002 |        | Release date
|                 |  |                     |        |          |  |              |        |             
|Sir Philip Watts |  |                     | 28,455 |          |  |              | 15,374 |              |  |  | 43,829 |  |  |  | 11.03.05 | 
|Paul Skinner     |  |                     | 21,138 |          |  |              | 11,421 |              |  |  | 32,559 |  |  |  | 11.03.05 | 
|                 |  |                     |        |          |  |              |        |              |  |  |        |  |  |  |          | 



---

|b |  | Additional information is included in the notes to the
Shell Transport Financial Statements under Remuneration
Report  Base Salary and fees on page S9.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------

Group Audit Committee

In 1976 the Board of Shell Transport, jointly with the Supervisory Board of
Royal Dutch, established a Group Audit Committee. Under its terms of reference
the Committee acts in an advisory capacity to the Boards, providing them with
quarterly and annual updates regarding its activities and related
recommendations. The Committee regularly considers the effectiveness of risk
management processes and internal control within the Group and reviews the
financial accounts and reports of the Royal Dutch/Shell Group of Companies. The
Committee also considers both internal and external audit reports (including
the results of the examination of the Group Financial Statements) and assesses
the performance of internal and external audit.

The Directors of Shell Transport appointed to the Committee are currently Sir
Peter Burt, Luis Giusti and Nina Henderson; the members appointed by the
Supervisory Board of Royal Dutch are currently Aad Jacobs (Chairman of the
Committee), Henny de Ruiter and Jan Timmer.

Remuneration and Succession Review Committee

In 1967 the Board of Shell Transport, jointly with the Supervisory Board of
Royal Dutch, established a Remuneration Committee. Following restatement of its
terms of reference in 1980, this Committee was renamed as Remuneration and
Succession Review Committee. The functions of the Committee are to make
recommendations on all forms of remuneration with respect to Group Managing
Directors and to review matters relating to the succession to the positions of
Group Managing Directors.

76   The Shell Transport and Trading Company, Public Limited Company



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##### Table of Contents



The members appointed by the Board of Shell Transport are currently Nina
Henderson, Sir Peter Job and Sir Mark Moody-Stuart; the members appointed by
the Supervisory Board of Royal Dutch are currently Jonkheer Aarnout Loudon
(Chairman of the Committee), Professor Joachim Milberg and Henny de Ruiter. The
Chairman of the Committee is currently an appointee of Royal Dutch and Sir
Peter Job has been nominated by the Board of Shell Transport to respond at the
Annual General Meeting to any questions relating to remuneration issues.

Social Responsibility Committee

In 1997 the Board of Shell Transport, jointly with the Supervisory Board of
Royal Dutch, established a Social Responsibility Committee. The Committee
reviews the policies and conduct of the Royal Dutch/Shell Group of Companies
with respect to the Groups Statement of General Business Principles as well as
the Groups Health, Safety and Environment Commitment and Policy.

The members appointed by the Board of Shell Transport are currently Teymour
Alireza, Dr Eileen Buttle and Lord Oxburgh (Chairman of the Committee). The
members appointed by the Supervisory Board of Royal Dutch are currently Maarten
van den Bergh, Jonkheer Aarnout Loudon and Jan Timmer.

Shell companies have long been open about the values and principles which guide
them, and the Groups Statement of General Business Principles has been
publicly available since 1976. The latest revision followed extensive internal
and external consultation. The Statement of General Business Principles
includes commitments to support fundamental human rights and to contribute to
sustainable development.

The Annual Report and Accounts 2002 is distributed with a copy of The Shell
Report 2002  Meeting the energy challenge, which reviews how Group companies
are living up to the Groups Business Principles and contributing to
sustainable development.

Code of Ethics

For the guidance of principle executives and senior financial officers, a Code
of Ethics has been drawn up in conjuntion with the Groups Statement of General
Business Principles. This Code of Ethics can be found on the Shell website (see
www.shell.com/codeofethics).

Compensation of Directors and Officers

The aggregate amount of remuneration paid to or accrued for Directors, Managing
Directors and officers of Shell Transport as a group by Shell Transport and
companies of the Royal Dutch/Shell Group of Companies for services in all
capacities during the fiscal year ended December 31, 2002, was £3,734,394. In
addition, £1,247,218 was paid during 2002 for service during the fiscal year
ended December 31, 2001. The aggregate amount set aside to provide pension,
retirement and similar benefits for Directors, Managing Directors and officers
of Shell Transport by Shell Transport and companies of the Royal Dutch/Shell
Group of Companies during the fiscal year ended December 31, 2002, was nil.

Reference is made to the information given in the Remuneration section on pages
S9 to S14 relating to Directors emoluments.

None of the Directors of Shell Transport have service contracts with Shell
Transport, their employing company or any other Group company providing for
benefits upon termination.



The Shell Transport and
Trading Company, Public Limited Company   77



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SHARES UNDER OPTION AND SHARE PURCHASE PLAN

Two Group companies, one in the Netherlands (Shell Petroleum N.V.) and one in
the United Kingdom (The Shell Petroleum Company Limited), have stock option
plans under which options have been or may be granted to executives and other
employees of those and other Group companies. Options granted under these plans
are at a price of not less than the market value at the date of granting the
option and for the terms indicated in the tabulation below.

The securities of Shell Transport involved in the plans as of March 3, 2003,
are 101,286,254 issued and outstanding Ordinary shares.

The number of Ordinary shares under option at March 3, 2003, and the option
prices of the Ordinary shares at the date the options were granted, per share
and in total, were as follows:

|                                    |  |                  |            |           |  |              |       |                    |  |      |              |  |  |          |                    |  
|----------------------------------- |  | ---------------- | ---------- | --------- |  | ------------ | ----- | ------------------ |  | ---- | ------------ |  |  | -------- | ------------------ | -
|Plan                                |  |                  |            |           |  | Option price |       |                    |  |     
|                                    |  |                  |            |           |  |              |       |                    |  |     
|                                    |  | Number of shares |            | Average   |  |              |       |                    |  | Term
|                                    |  | under option     |            | per share |  | Total        |       | (expiration dates)
|                                    |  |                  |            |           |  |              |       |                   
|Shell Petroleum N.V                 |  |                  | 1,200      |           |  |              | £4.39 |                    |  |      | £5,268       |  |  | 5 yearsa
|                                    |  |                  |            |           |  |              |       |                    |  |      |              |  |  |          | (04/10/0203/10/03 | )
|Shell Petroleum N.V                 |  |                  | 26,559,900 |           |  |              | £5.23 |                    |  |      | £138,997,378 |  |  | 10 years
|                                    |  |                  |            |           |  |              |       |                    |  |      |              |  |  |          | (10/12/0713/11/12 | )
|The Shell Petroleum Company Limited |  |                  | 74,725,154 |           |  |              | £5.10 |                    |  |      | £380,961,270 |  |  | 10 years
|                                    |  |                  |            |           |  |              |       |                    |  |      |              |  |  |          | (10/12/0713/11/12 | )
|                                    |  |                  |            |           |  |              |       |                    |  |      |              |  |  |          |                    |  



---

|a |  | A five year option under the Shell Petroleum N.V. plan with a normal
expiration date of 10/12/02 has in accordance with its terms been extended to
an expiration date of 03/10/03 due to the death of the participant who was
granted the option.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

During 1986 The Shell Petroleum Company Limited established a savings-related
share option scheme approved by the United Kingdom Inland Revenue pursuant to
the Finance Act 1980 (now consolidated into the Income and Corporation Taxes
Act 1988) under which options have been or may be granted over Ordinary shares
of Shell Transport to eligible employees of certain Group companies in the
United Kingdom. Options granted under the scheme are at a price of not less
than the market value shortly before the date of grant and are normally
exercisable after completion of a contractual savings period of either three or
five years. In 1998 Shell Petroleum N.V. established a similar savings related
share option scheme. At March 3, 2003 there were 15,847,077 issued and
outstanding Ordinary shares of Shell Transport under option to such employees
pursuant to the rules of those schemes at prices between £3.55 and £5.69.

The Global Employee Share Purchase Plan implemented in 2001, enables employees
to make contributions, which are applied quarterly to purchase Royal Dutch or
Shell Transport shares at current market value. If the acquired shares are
retained in the Plan until the end of the twelve-month cycle the employee
receives an additional 15% share match. In the USA a variant of the plan is
operated where contributions are applied to buy Royal Dutch shares at the end
of the twelve-month cycle. The purchase price is the lower of the market price
on the first or last trading day of the cycle reduced by 15%. Group Managing
Directors are not eligible to participate in the Global Employee Share Purchase
Plan. At March 3, 2003, 14,578 Shell Transport Ordinary shares (2001: 77,604)
were held by Group companies in connection with this Plan.

No issue of new shares is involved under any of the plans or schemes mentioned
above.




CONTROLS AND PROCEDURES

As of 25 February 2003, (the Evaluation Date) Shell Transport conducted an
evaluation (under the supervision and with the participation of the Committee
of Managing Directors), pursuant to Rule 13a-15 promulgated under the
Securities Exchange Act of 1934, as amended (the Exchange Act), of the
effectiveness of the design and operation of Shell Transports disclosure
controls and procedures. Based on this evaluation, the Chairman and Managing
Director of Shell Transport and the Director of Finance concluded that as of
the Evaluation Date such disclosure controls and procedures were reasonably
designed to ensure that information required to be disclosed by Shell Transport
in reports it
files or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the
Securities and Exchange Commission.

Since the Evaluation Date, there have not been any significant changes in the
internal controls or in other factors that could significantly affect the
internal controls.

78   The Shell
Transport and Trading Company, Public Limited Company



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##### Table of Contents






Index to the Financial Statements and Exhibits

|                                                                                                                                                                                                                                                                                                                   |  |      |     | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---- | --- | 
|                                                                                                                                                                                                                                                                                                                   |  | Page
|                                                                                                                                                                                                                                                                                                                   |  |     
|(A) Financial Data*                                                                                                                                                                                                                                                                                                |  |      |     | 
|Royal Dutch Petroleum Company:                                                                                                                                                                                                                                                                                     |  |      |     | 
|Report of Independent Accountants                                                                                                                                                                                                                                                                                  |  |      | R1  | 
|Financial Statements                                                                                                                                                                                                                                                                                               |  |      |     | 
|Profit and Loss Account                                                                                                                                                                                                                                                                                            |  |      | R2  | 
|Statement of Appropriation of Profit                                                                                                                                                                                                                                                                               |  |      | R2  | 
|Earnings per ordinary share                                                                                                                                                                                                                                                                                        |  |      | R2  | 
|Balance Sheet                                                                                                                                                                                                                                                                                                      |  |      | R2  | 
|Statement of Cash Flows                                                                                                                                                                                                                                                                                            |  |      | R2  | 
|Notes to the Financial Statements                                                                                                                                                                                                                                                                                  |  |      | R3  | 
|Remuneration                                                                                                                                                                                                                                                                                                       |  |      | R7  | 
|The Shell Transport and Trading Company, Public Limited Company:                                                                                                                                                                                                                                                 |  |      |     | 
|Report of Independent Accountants                                                                                                                                                                                                                                                                                  |  |      | S1  | 
|Financial Statements                                                                                                                                                                                                                                                                                               |  |      |     | 
|Profit and Loss Account                                                                                                                                                                                                                                                                                            |  |      | S2  | 
|Statement of Retained Profit                                                                                                                                                                                                                                                                                       |  |      | S2  | 
|Earnings per Ordinary share                                                                                                                                                                                                                                                                                        |  |      | S2  | 
|Balance Sheet                                                                                                                                                                                                                                                                                                      |  |      | S2  | 
|Statement of Total Recognised Gains and Losses                                                                                                                                                                                                                                                                     |  |      | S3  | 
|Statement of Cash Flows                                                                                                                                                                                                                                                                                            |  |      | S3  | 
|Notes to the Financial Statements                                                                                                                                                                                                                                                                                  |  |      | S4  | 
|Remuneration Report                                                                                                                                                                                                                                                                                                |  |      | S9  | 
|Royal Dutch/Shell Group of Companies:                                                                                                                                                                                                                                                                              |  |      |     | 
|Report of Independent Accountants                                                                                                                                                                                                                                                                                  |  |      | G1  | 
|Financial Statements                                                                                                                                                                                                                                                                                               |  |      |     | 
|Statement of Income                                                                                                                                                                                                                                                                                                |  |      | G2  | 
|Statement of Comprehensive Income and Parent Companies Interest in Group Net Assets                                                                                                                                                                                                                               |  |      | G2  | 
|Statement of Assets and Liabilities                                                                                                                                                                                                                                                                                |  |      | G3  | 
|Statement of Cash Flows                                                                                                                                                                                                                                                                                            |  |      | G4  | 
|Notes to the Financial Statements                                                                                                                                                                                                                                                                                  |  |      | G5  | 
|Supplementary Information  Oil and Gas                                                                                                                                                                                                                                                                            |  |      |     | 
|Reserves                                                                                                                                                                                                                                                                                                           |  |      | G34 | 
|Standardised measure of discounted future cash flows                                                                                                                                                                                                                                                               |  |      | G36 | 
|Supplementary Information  Derivatives and other Financial Instruments and Derivative Commodity Instruments                                                                                                                                                                                                       |  |      | G37 | 
|(B) Exhibits                                                                                                                                                                                                                                                                                                       |  |      |     | 
|1.1 Articles of Association of Royal Dutch                                                                                                                                                                                                                                                                         |  |      |     | 
|1.2 Memorandum and Articles of Association of Shell Transport (incorporated by reference to the Report of Foreign Issuer on Form
6-K (Commission File No. 1-4039) of Shell Transport furnished to the Securities and Exchange Commission on June 21, 2002)                                                         |  |      |     | 
|4.1 Adjustment Agreement between Royal Dutch and Shell Transport dated July 5, 1907, and certain amendments thereto                                                                                                                                                                                                |  |      |     | 
|4.2 Shell Petroleum N.V. Stock Option Plan, as amended (incorporated by reference to the Post-Effective Amendment
No. 1 to Registration Statement on Form S-8 (Registration No. 333-7590) of Royal Dutch and Shell Transport filed
with the Securities and Exchange Commission on June 28, 2001)                   |  |      |     | 
|4.3 Shell Petroleum Company Limited Stock Option Plan (1967), as amended (incorporated by reference to the
Post-Effective Amendment No. 1 to Registration Statement on Form S-8 (Registration No. 333-7590) of Royal Dutch
and Shell Transport filed with the Securities and Exchange Commission on June 28, 2001) |  |      |     | 
|8 Significant Group companies as at December 31, 2002                                                                                                                                                                                                                                                              |  |      |     | 
|23.1 Consent of KPMG Accountants N.V., The Hague                                                                                                                                                                                                                                                                   |  |      |     | 
|23.2 Consent of PricewaterhouseCoopers LLP, London                                                                                                                                                                                                                                                                 |  |      |     | 
|23.3 Consent of KPMG Accountants N.V., The Hague and PricewaterhouseCoopers LLP, London                                                                                                                                                                                                                            |  |      |     | 
|23.4 Consent of KPMG Accountants N.V., The Hague                                                                                                                                                                                                                                                                   |  |      |     | 
|23.5 Consent of KPMG Accountants N.V., The Hague and PricewaterhouseCoopers LLP, London                                                                                                                                                                                                                            |  |      |     | 



---

|* |  | Schedules not included have been omitted because they are not applicable or
not required. Alternatively, the required information is shown in the financial
statements or notes thereto. Summarised financial information in aggregate for
majority-owned subsidiaries not consolidated and 50% or less-owned persons, the
investments in which are accounted for by the equity method, has been provided
in the notes to the financial statements. Separate financial statements for any
such individual majority-owned subsidiary not consolidated or 50% or less-owned
person, the investments in which are accounted for by the equity method, have
been omitted because none constitutes a significant subsidiary.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Index to the Financial Statements and Exhibits   79



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##### Table of Contents



Signatures

As to the undersigned registrant, this Annual Report consists solely of the
information referred to on the cross-reference sheet headed Royal Dutch and
does not include the information as to Shell Transport on page 36 under the
heading Selected Financial Data, on page 38, on pages 68 through 78 and pages
S2 through S15.

The material in this report is stated as at December 31, 2002, except that
certain 2003 subsequent events are stated down to March 3, 2003.

Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant certifies that it meets all of the requirements for filing
on Form 20-F and has duly caused this Annual Report to be signed on its behalf
by the undersigned, thereunto duly authorised.

N.V. KONINKLIJKE NEDERLANDSCHE PETROLEUM MAATSCHAPPIJ

Jeroen van der Veer
Jeroen van der Veer
President and Managing Director

Walter van de Vijver
Walter van de Vijver
Managing Director

The Hague
March 31, 2003

80   Signatures



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##### Table of Contents



As to the undersigned registrant, this Annual Report consists solely of the
information referred to on the cross-reference sheet headed Shell Transport and
does not include the information as to Royal Dutch on page 36 under the heading
Selected Financial Data, on page 37, on pages 58 through 67 and pages R2
through R14.

The material in this report is stated as at December 31, 2002, except that
certain 2003 subsequent events are stated down to March 3, 2003.

Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant certifies that it meets all of the requirements for filing
on Form 20-F and has duly caused this Annual Report to be signed on its behalf
by the undersigned, thereunto duly authorised.

THE SHELL TRANSPORT AND TRADING COMPANY, PUBLIC LIMITED COMPANY

Sir Philip Watts
Sir Philip Watts
Chairman and Managing Director

London
March 31, 2003

Signatures   81



---



##### Table of Contents



I, Jeroen van der Veer, certify that:



|1. |  | I have reviewed this annual report on Form 20-F of Royal Dutch Petroleum Company (N.V. Koninklijke Nederlandsche
Maatschappij);                                                                                                                                                                                         
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this annual report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in
all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented
in this annual report;                       
|  
|4. |  | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the issuer and have:                                                                                                      



| | (a) |  | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this
annual report is being prepared;
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing
date of this annual report (the Evaluation Date); and                                                                                                  
|
| | (c) |  | presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants auditors and
the audit committee of registrants board of directors (or persons performing the equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability
to record, process, summarize and report financial data and have identified for the registrants auditors any material
weaknesses in internal controls; and
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrants internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in this annual report whether or not there were significant changes
in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: March 31, 2003

The Hague

Jeroen van der Veer
Jeroen van der Veer
President and Managing Director

82   Signatures



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##### Table of Contents



I, Judith Boynton, certify that:



|1. |  | I have reviewed this annual report on Form 20-F of Royal Dutch Petroleum Company (N.V. Koninklijke Nederlandsche
Maatschappij);                                                                                                                                                                                         
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this annual report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in
all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this annual report;                   
|  
|4. |  | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:                                                                                                  



| | (a) |  | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this
annual report is being prepared;
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing
date of this annual report (the Evaluation Date); and                                                                                                  
|
| | (c) |  | presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants auditors and
the audit committee of registrants board of directors (or persons performing the equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability
to record, process, summarize and report financial data and have identified for the registrants auditors any material
weaknesses in internal controls; and
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrants internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in this annual report whether or not there were significant changes
in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: March 31, 2003

London

Judith Boynton
Judith Boynton
Director of Finance

Signatures   83



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##### Table of Contents



I, Sir Philip Watts certify that:



|1. |  | I have reviewed this annual report on Form 20-F of The Shell Transport and Trading Company, p.l.c.;                                                                                                                                                                                                                   
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this annual report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in
all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this annual report;                   
|  
|4. |  | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:                                                                                                  



| | (a) |  | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this
annual report is being prepared;
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing
date of this annual report (the Evaluation Date); and                                                                                                  
|
| | (c) |  | presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants auditors and
the audit committee of registrants board of directors (or persons performing the equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  



| | (a) |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability
to record, process, summarize and report financial data and have identified for the registrants auditors any material
weaknesses in internal controls; and
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrants internal controls; and                                                                                                                                        
|

|6. |  | The registrants other certifying officers and I have indicated in this annual report whether or not there were significant changes
in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: March 31, 2003

London

Sir Philip Watts
Sir Philip Watts
Chairman and Managing Director

84   Signatures



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##### Table of Contents



I, Judith Boynton, certify that:



|1. |  | I have reviewed this annual report on Form 20-F of The Shell Transport and Trading Company, p.l.c.;                                                                                                                                                                                                                   
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this annual report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this annual report;                   
|  
|4. |  | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:                                                                                                  



| | (a) |  | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this
annual report is being prepared;
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the Evaluation Date); and                                                                                                  
|
| | (c) |  | presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants auditors
and the audit committee of registrants board of directors (or persons performing the equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability
to record, process, summarize and report financial data and have identified for the registrants auditors any material
weaknesses in internal controls; and
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrants internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in this annual report whether or not there were significant changes
in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: March 31, 2003

London

Judith Boynton
Judith Boynton
Director of Finance



Signatures   85



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(This page is intentionally blank)

86   Signatures



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##### Table of Contents



Royal Dutch Petroleum Company

Report of Independent Accountants

To: Royal Dutch Petroleum Company

We have audited the Financial Statements of Royal Dutch Petroleum Company for
the years 2002, 2001 and 2000 appearing on pages R2 to R6. The preparation of
these Financial Statements is the responsibility of the Board of Management.
Our responsibility is to express an opinion on the Financial Statements based
on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the Financial
Statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the Financial
Statements. An audit also includes assessing the accounting principles used and
significant estimates made by the Board of Management in the preparation of the
Financial Statements, as well as evaluating the overall Financial Statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the Financial Statements referred to above present fairly, in
all material respects, the financial position of Royal Dutch Petroleum Company
at December 31, 2002 and 2001, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2002 in
accordance with the accounting policies described on page R3.

The report of independent accountants on the 2002, 2001 and 2000 Financial
Statements of the Royal Dutch/Shell Group of Companies, which form part of the
Financial Statements of Royal Dutch Petroleum Company, appears on page G1.

KPMG Accountants N.V.

KPMG Accountants N.V.,
The Hague

March 5, 2003



Royal Dutch Petroleum Company   R1



---



##### Table of Contents






Financial Statements




|                                                                    |  |      |   |      |  |           |       |      |  |  |       |  |  |  |       | 
|------------------------------------------------------------------- |  | ---- | - | ---- |  | --------- | ----- | ---- |  |  | ----- |  |  |  | ----- | 
|Profit and Loss Account                                             |  |      |   |      |  |  million
|                                                                    |  |      |   |      |  |          
|                                                                    |  | Note |   | 2002 |  | 2001      |       | 2000
|                                                                    |  |      |   |      |  |           |       |     
|Share in the net income of companies
of the Royal Dutch/Shell Group |  |      | 3 |      |  |           | 5,989 |      |  |  | 7,265 |  |  |  | 8,272 | 
|lessAdministrative expenses                                         |  |      |   |      |  |           | 5     |      |  |  | 6     |  |  |  | 4     | 
|                                                                    |  |      |   |      |  |           |       |      |  |  |       |  |  |  |       | 
|                                                                    |  |      |   |      |  |           | 5,984 |      |  |  | 7,259 |  |  |  | 8,268 | 
|                                                                    |  |      |   |      |  |           |       |      |  |  |       |  |  |  |       | 
|Interest income                                                     |  |      |   |      |  |           | 28    |      |  |  | 33    |  |  |  | 24    | 
|                                                                    |  |      |   |      |  |           |       |      |  |  |       |  |  |  |       | 
|Profit before taxation                                              |  |      |   |      |  |           | 6,012 |      |  |  | 7,292 |  |  |  | 8,292 | 
|                                                                    |  |      |   |      |  |           |       |      |  |  |       |  |  |  |       | 
|lessTaxation                                                        |  |      |   |      |  |           | 8     |      |  |  | 10    |  |  |  | 7     | 
|                                                                    |  |      |   |      |  |           |       |      |  |  |       |  |  |  |       | 
|Profit after taxation                                               |  |      |   |      |  |           | 6,004 |      |  |  | 7,282 |  |  |  | 8,285 | 
|                                                                    |  |      |   |      |  |           |       |      |  |  |       |  |  |  |       | 

|                                             |  |      |   |      |  |           |        |      |  |  |        |   |  |  |        |  
|-------------------------------------------- |  | ---- | - | ---- |  | --------- | ------ | ---- |  |  | ------ | - |  |  | ------ | -
|Statement of Appropriation of Profit         |  |      |   |      |  |  million
|                                             |  |      |   |      |  |          
|                                             |  | Note |   | 2002 |  | 2001      |        | 2000
|                                             |  |      |   |      |  |           |        |     
|Profit after taxation                        |  |      |   |      |  |           | 6,004  |      |  |  | 7,282  |   |  |  | 8,285  |  
|Taken from/(to) Statutory
investment reserve |  |      | 4 |      |  |           | (2,672 | )    |  |  | (1,117 | ) |  |  | (2,578 | )
|Undistributed profit at
beginning of year    |  |      |   |      |  |           | 2,670  |      |  |  | 2,701  |   |  |  | 402    |  
|Repurchase of share capital                  |  |      |   |      |  |           | (847   | )    |  |  | (2,654 | ) |  |  |       |  
|Unclaimed dividends forfeited                |  |      |   |      |  |           | 1      |      |  |  | 1      |   |  |  | 1      |  
|                                             |  |      |   |      |  |           |        |      |  |  |        |   |  |  |        |  
|Available for distribution                   |  |      |   |      |  |           | 5,156  |      |  |  | 6,213  |   |  |  | 6,110  |  
|                                             |  |      |   |      |  |           |        |      |  |  |        |   |  |  |        |  
|lessInterim dividenda                        |  |      |   |      |  |           | 1,506  | b    |  |  | 1,501  |   |  |  | 1,436  |  
|Final dividend                               |  |      |   |      |  |           | 2,084  | bc   |  |  | 2,042  |   |  |  | 1,973  |  
|                                             |  |      |   |      |  |           |        |      |  |  |        |   |  |  |        |  
|                                             |  |      |   |      |  |           | 3,590  |      |  |  | 3,543  |   |  |  | 3,409  |  
|                                             |  |      |   |      |  |           |        |      |  |  |        |   |  |  |        |  
|Undistributed profit at end of year          |  |      |   |      |  |           | 1,566  |      |  |  | 2,670  |   |  |  | 2,701  |  
|                                             |  |      |   |      |  |           |        |      |  |  |        |   |  |  |        |  



---

|a |  | Including 4% cumulative preference dividend amounting to 26,880 on priority
shares (2000 and 2001: 27,227).        
|- |  | ---------------------------------------------------------------------------------------------------------------------
| 
|b |  | No dividends are paid on ordinary shares acquired and held by the Company in its
own capital.                        
| 
|c |  | Proposed final dividend, subject to finalisation by the General Meeting of
Shareholders to be held on April 23, 2003.

|                                 |  |      |      |      |  |      |      |  |  |  |      | 
|-------------------------------- |  | ---- | ---- | ---- |  | ---- | ---- |  |  |  | ---- | 
|Earnings per ordinary sharea     |  |    
|                                 |  |     
|                                 |  | 2002 |      | 2001 |  | 2000
|                                 |  |      |      |      |  |     
|Net income/profit after taxation |  |      | 2.87 |      |  |      | 3.44 |  |  |  | 3.86 | 



---

|  |  | The earnings per share amounts shown
above are directly related to profit after
taxation. In the opinion of the Board of
Management, these are the most meaningful
since they reflect the full entitlement of the
Company in the income of Group companies. The
earnings per share calculation includes shares
held to back share options (refer to Note 22
of the Group Financial Statements). There is
no difference between basic and diluted
earnings per share.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|a |  | On weighted average
2,092,718,616 shares in issue during the year
2002 (2001: on 2,119,873,567 and 2000: on
2,144,296,352 shares in issue). For this
purpose shares repurchased under the buyback
programme are deemed to have been cancelled on
purchase date.                                                                                                                                                                                                     

|                                        |                                                                    |  |      |   |      |           |        |        |        |  |        |        |  
|--------------------------------------- | ------------------------------------------------------------------ |  | ---- | - | ---- | --------- | ------ | ------ | ------ |  | ------ | ------ | -
|Balance Sheeta                          |                                                                    |  |      |   |      |  million
|                                        |                                                                    |  |      |   |      |          
|                                        |                                                                    |  |      |   |      |           | Dec 31 |        | Dec 31
|                                        |                                                                    |  | Note |   | 2002 |           | 2001  
|                                        |                                                                    |  |      |   |      |           |       
|Fixed assets                            |                                                                    |  |      |   |      |           |        |        |        |  |        |       
|Financial fixed assets                  |                                                                    |  |      |   |      |           |        |        |        |  |        |       
|                                        | Investments in companies
of the Royal Dutch/Shell Group            |  |      | 4 |      |           |        | 34,934 |        |  |        | 38,431 |  
|Current assets                          |                                                                    |  |      |   |      |           |        |        |        |  |        |       
|Receivables                             |                                                                    |  |      |   |      |           |        |        |        |  |        |       
|                                        | Dividends receivable from companies
of the Royal Dutch/Shell Group |  |      |   |      |           |        | 2,982  |        |  |        | 4,111  |  
|                                        | Other receivables                                                  |  |      | 5 |      |           |        | 36     |        |  |        | 23     |  
|Cash and cash equivalents               |                                                                    |  |      |   |      |           | 589    |        |        |  | 549    |       
|                                        |                                                                    |  |      |   |      |           |        |        |        |  |        |        |  
|                                        |                                                                    |  |      |   |      |           | 3,607  |        |        |  | 4,683  |       
|                                        |                                                                    |  |      |   |      |           |        |        |        |  |        |        |  
|Current liabilities                     |                                                                    |  |      |   |      |           |        |        |        |  |        |       
|                                        | Final dividend                                                     |  |      |   |      |           |        | 2,084  | b      |  |        | 2,042  |  
|                                        | Other liabilities                                                  |  |      | 6 |      |           |        | 11     |        |  |        | 9      |  
|                                        |                                                                    |  |      |   |      |           |        |        |        |  |        |        |  
|                                        |                                                                    |  |      |   |      |           | 2,095  |        |        |  | 2,051  |       
|                                        |                                                                    |  |      |   |      |           |        |        |        |  |        |        |  
|Current assets less current liabilities |                                                                    |  |      |   |      |           | 1,512  |        |        |  | 2,632  |       
|                                        |                                                                    |  |      |   |      |           |        |        |        |  |        |        |  
|Total assets less current liabilities   |                                                                    |  |      |   |      |           | 36,446 |        |        |  | 41,063 |       
|                                        |                                                                    |  |      |   |      |           |        |        |        |  |        |        |  
|Shareholders equity                    |                                                                    |  |      |   |      |           |        |        |        |  |        |       
|Paid-up capital                         |                                                                    |  | 7    |   |      |           |        |        |        |  |        |       
|                                        | Ordinary shares                                                    |  |      |   |      |           |        | 1,175  |        |  |        | 1,206  |  
|                                        | Priority shares                                                    |  |      |   |      |           |        | 1      |        |  |        | 1      |  
|                                        |                                                                    |  |      |   |      |           |        |        |        |  |        |        |  
|                                        |                                                                    |  |      |   |      |           | 1,176  |        |        |  | 1,207  |       
|                                        |                                                                    |  |      |   |      |           |        |        |        |  |        |        |  
|Share premium reserve                   |                                                                    |  |      |   |      |           | 1      |        |        |  | 1      |       
|Investment reserves                     |                                                                    |  | 4    |   |      |           |        |        |        |  |        |       
|                                        | Statutory                                                          |  |      |   |      |           |        | 23,001 |        |  |        | 25,485 |  
|                                        | Currency translation differences                                   |  |      |   |      |           |        | (2,371 | )      |  |        | (4,306 | )
|                                        | Other                                                              |  |      |   |      |           |        | 13,058 |        |  |        | 16,006 |  
|                                        |                                                                    |  |      |   |      |           |        |        |        |  |        |        |  
|                                        |                                                                    |  |      |   |      |           | 33,688 |        |        |  | 37,185 |       
|                                        |                                                                    |  |      |   |      |           |        |        |        |  |        |        |  
|Other statutory reserves                |                                                                    |  | 8    |   |      |           | 15     |        |        |  |       |       
|Undistributed profit                    |                                                                    |  |      |   |      |           | 1,566  |        |        |  | 2,670  |       
|                                        |                                                                    |  |      |   |      |           |        |        |        |  |        |        |  
|                                        |                                                                    |  |      |   |      |           | 36,446 |        |        |  | 41,063 |       
|                                        |                                                                    |  |      |   |      |           |        |        |        |  |        |        |  



---

|a |  | The appropriation of profit has already been incorporated in the Balance Sheet.                                      
|- |  | ---------------------------------------------------------------------------------------------------------------------
| 
|b |  | Proposed final dividend, subject to finalisation by the General Meeting of
Shareholders to be held on April 23, 2003.

|                                                                               |  |           |        |      |  |      |        |   |  |  |        |  
|------------------------------------------------------------------------------ |  | --------- | ------ | ---- |  | ---- | ------ | - |  |  | ------ | -
|Statement of Cash Flows                                                        |  |  million
|                                                                               |  |          
|                                                                               |  | 2002      |        | 2001 |  | 2000
|                                                                               |  |           |        |      |  |     
|Returns on investments and
servicing of finance                                |  |           |        |      |  |      |        |   |  |  |        |  
|Dividends received from Group companies                                        |  |           | 4,446  |      |  |      | 6,342  |   |  |  | 3,352  |  
|Interest received                                                              |  |           | 32     |      |  |      | 30     |   |  |  | 26     |  
|Other                                                                          |  |           | (5     | )    |  |      | (5     | ) |  |  |       |  
|                                                                               |  |           |        |      |  |      |        |   |  |  |        |  
|Net cash inflow/(outflow) from returns
on investments and servicing of finance |  |           | 4,473  |      |  |      | 6,367  |   |  |  | 3,378  |  
|                                                                               |  |           |        |      |  |      |        |   |  |  |        |  
|Taxation                                                                       |  |           |        |      |  |      |        |   |  |  |        |  
|Tax (paid)/recovered                                                           |  |           | (8     | )    |  |      | (14    | ) |  |  | (3     | )
|Financing                                                                      |  |           |        |      |  |      |        |   |  |  |        |  
|Repurchase of share capital, including expenses                                |  |           | (889   | )    |  |      | (2,700 | ) |  |  |       |  
|Dividends paid                                                                 |  |           | (3,536 | )    |  |      | (3,459 | ) |  |  | (3,283 | )
|                                                                               |  |           |        |      |  |      |        |   |  |  |        |  
|Increase/(decrease) in cash
and cash equivalents                               |  |           | 40     |      |  |      | 194    |   |  |  | 92     |  
|                                                                               |  |           |        |      |  |      |        |   |  |  |        |  
|Cash at January 1                                                              |  |           | 549    |      |  |      | 355    |   |  |  | 263    |  
|                                                                               |  |           |        |      |  |      |        |   |  |  |        |  
|Cash at December 31                                                            |  |           | 589    |      |  |      | 549    |   |  |  | 355    |  
|                                                                               |  |           |        |      |  |      |        |   |  |  |        |  

R2   Royal Dutch Petroleum Company



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##### Table of Contents



Notes to the Financial Statements

1 The Company

Royal Dutch, one of the Parent Companies of the Royal Dutch/Shell Group, is a
holding company which, in conjunction with Shell Transport, owns, directly or
indirectly, investments in the numerous companies known collectively as the
Royal Dutch/Shell Group of Companies.

The Financial Statements of the Royal Dutch/Shell Group of Companies and the
Notes thereto on pages G2 to G33 form part of the Notes to the Annual Accounts.

Arrangements between Royal Dutch and Shell Transport provide, inter alia, that
notwithstanding variations in shareholdings, Royal Dutch and Shell Transport
shall share in the aggregate net assets and in the aggregate dividends and
interest received from Group companies in the proportion of 60:40. It is
further arranged that the burden of all taxes in the nature of, or
corresponding to, an income tax leviable in respect of such dividends and
interest shall fall in the same proportion. Note 1 to the Financial Statements
of the Royal Dutch/Shell Group of Companies (on page G5) gives details of
supplemental arrangements which have been made between Royal Dutch and Shell
Transport regarding dividends, taxes and tax benefits.

2 Accounting policies

The Annual Accounts of Royal Dutch include the Financial Statements of the
Royal Dutch/Shell Group of Companies. These Annual Accounts have been prepared
in accordance with legal requirements and generally accepted accounting
principles in the Netherlands.

The investments in and the share in the net income of companies of the Royal
Dutch/Shell Group are accounted for by the equity method (see also Notes 3 and
4). Accounting policies used by the Group are given in Note 2 on pages G5 to
G8.

Assets and liabilities in foreign currencies are translated into euros at
year-end rates of exchange, whereas results for the year are translated at
average rates. For the Profit and Loss Account euros are translated from
dollars at average rates for the quarter. Currency translation differences
arising from translating the investments in companies of the Royal Dutch/Shell
Group are taken to Investment reserves (see Note 4).

Administrative expenses, Interest income and Taxation are stated at the amounts
attributable to the respective financial years.

3 Share in the net income of companies of the Royal Dutch/Shell Group

The amount dealt with under this heading in the Profit and Loss Account has
been calculated as 60% of the net income of the Royal Dutch/Shell Group as
presented in the Group Financial Statements on page G2. The dividend for 2002
distributed and yet to be distributed from Group companies to Royal Dutch
amounted to 3,317 million (2001: 6,148 million). Net income has been
translated into euros using average rates of the quarters of the year.

4 Investments and reserves

The 60% interest in Group net assets is equal to the interest applicable to
Royal Dutch as shown in the Statement of Comprehensive Income and Parent
Companies Interest in Group Net Assets (on page G2).

Royal Dutchs investments in the companies of the Royal Dutch/Shell Group are
stated at an amount equal to the 60% share in Group net assets, translated into
euros at the year-end rate.

The difference of 33,688 million between the cost of the investments and the
amounts at which the investments are stated in the Balance Sheet has been taken
to Investment reserves.

The Statutory investment reserve comprises Royal Dutchs 60% share in the
undistributed net income of Group companies which has arisen as from January 1,
1984; Royal Dutchs share in the undistributed net income of Group companies
accumulated until that date is included in Investment reserves  Other.

Royal Dutchs 60% share in the cumulative Group currency translation
differences arises as a result of translating the assets and liabilities of
non-dollar companies to dollars at year-end rates of exchange (see Note 4 to
the Financial Statements of the Royal Dutch/Shell Group of Companies on page
G9) and is shown under Investment reserves as Currency translation differences.

Royal Dutch Petroleum Company   R3



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##### Table of Contents



The net increase/decrease in Parent Companies shares held by Group companies
represents the balance of sales and purchases and changes in valuation of these
shares minus dividends received on these shares.

Other comprehensive income, net of tax, consists of currency translation
differences, unrealised gains/losses on securities and on cash flow hedges and
minimum pension liability adjustments (see Note 5 to the Financial Statements
of the Royal Dutch/Shell Group of Companies on page G10).

The movements during the year in the value of the Group reporting currency
(dollar) against the Royal Dutch reporting currency (euro) lead to currency
translation differences.

As the amounts dealt with under Investment reserves have been, or will be,
substantially reinvested by the companies concerned, it is not meaningful to
provide for taxes on possible future distributions out of earnings retained by
those companies; no such provision has therefore been made. Furthermore, it is
not practicable to estimate the full amount of tax or the withholding tax
element.

Movements in Investments and Investment reserves

|                               |                                                                             |  |              |        |             |  |           |        |             |  |                     |        |          |  |        |        |   |  |        |        |   |  |        |        |  
|------------------------------ | --------------------------------------------------------------------------- |  | ------------ | ------ | ----------- |  | --------- | ------ | ----------- |  | ------------------- | ------ | -------- |  | ------ | ------ | - |  | ------ | ------ | - |  | ------ | ------ | -
|                               |                                                                             |  | $ million    |        |  million  
|                               |                                                                             |  |              |        |            
|                               |                                                                             |  |              |        |             |  |           |        |             |  | Investment reserves
|                               |                                                                             |  |              |        |             |  |           |        |             |  |                    
|                               |                                                                             |  | 60% interest |        |             |  |           |        |             |  |                     |        | Currency |  |        |        |   |  |        |        |  
|                               |                                                                             |  | in Group     |        | Royal Dutch |  |           |        |             |  | translation         |        |          |  |        |        |   |  |       
|                               |                                                                             |  | net assets   |        | investments |  | Statutory |        | differences |  | Other               |        | Total   
|                               |                                                                             |  |              |        |             |  |           |        |             |  |                     |        |         
|Balance at December 31, 2000   |                                                                             |  | 34,252       |        |             |  | 36,988    |        |             |  | 23,298              |        |          |  | (2,994 | )      |   |  | 15,438 |        |   |  | 35,742 |       
|Movements during the year 2001 |                                                                             |  |              |        |             |  |           |        |             |  |                     |        |          |  |        |        |   |  |        |        |   |  |        |       
|                               | Undistributed net income of Group companies                                 |  |              | 1,013  |             |  |           | 1,117  |             |  |                     | 1,117  |          |  |        |       |   |  |        |       |   |  |        | 1,117  |  
|                               | Net (increase)/decrease in Parent Companies shares held by Group companies |  |              | (385   | )           |  |           | (294   | )           |  |                     |       |          |  |        |       |   |  |        | (294   | ) |  |        | (294   | )
|                               | Other comprehensive income, net of tax                                      |  |              | (1,184 | )           |  |           | (1,338 | )           |  |                     | (184   | )        |  |        | (1,154 | ) |  |        |       |   |  |        | (1,338 | )
|                               | Translation effect arising from movements in dollar/euro rate               |  |              |        |             |  |           | 1,958  |             |  |                     | 1,254  |          |  |        | (158   | ) |  |        | 862    |   |  |        | 1,958  |  
|                               |                                                                             |  |              |        |             |  |           |        |             |  |                     |        |          |  |        |        |   |  |        |        |   |  |        |       
|Balance at December 31, 2001   |                                                                             |  | 33,696       |        |             |  | 38,431    |        |             |  | 25,485              |        |          |  | (4,306 | )      |   |  | 16,006 |        |   |  | 37,185 |       
|                               |                                                                             |  |              |        |             |  |           |        |             |  |                     |        |          |  |        |        |   |  |        |        |   |  |        |       
|Movements during the year 2002 |                                                                             |  |              |        |             |  |           |        |             |  |                     |        |          |  |        |        |   |  |        |        |   |  |        |       
|                               | Undistributed net income of Group companies                                 |  |              | 2,390  |             |  |           | 2,672  |             |  |                     | 2,672  |          |  |        |       |   |  |        |       |   |  |        | 2,672  |  
|                               | Net (increase)/decrease in Parent Companies shares held by Group companies |  |              | (507   | )           |  |           | (390   | )           |  |                     |       |          |  |        |       |   |  |        | (390   | ) |  |        | (390   | )
|                               | Other comprehensive income, net of tax                                      |  |              | 459    |             |  |           | 439    |             |  |                     | (831   | )        |  |        | 1,270  |   |  |        |       |   |  |        | 439    |  
|                               | Translation effect arising from movements in dollar/euro rate               |  |              |        |             |  |           | (6,218 | )           |  |                     | (4,325 | )        |  |        | 665    |   |  |        | (2,558 | ) |  |        | (6,218 | )
|                               |                                                                             |  |              |        |             |  |           |        |             |  |                     |        |          |  |        |        |   |  |        |        |   |  |        |       
|Balance at December 31, 2002   |                                                                             |  | 36,038       |        |             |  | 34,934    |        |             |  | 23,001              |        |          |  | (2,371 | )      |   |  | 13,058 |        |   |  | 33,688 |       
|                               |                                                                             |  |              |        |             |  |           |        |             |  |                     |        |          |  |        |        |   |  |        |        |   |  |        |       

5 Other receivables

|                        |  |           |    |        |  |  |    |  | 
|----------------------- |  | --------- | -- | ------ |  |  | -- |  | 
|                        |  |  million |   
|                        |  |          
|                        |  | Dec 31    |    | Dec 31
|                        |  | 2002      |    | 2001  
|                        |  |           |    |       
|Dividend tax receivable |  |           | 35 |        |  |  | 19 |  | 
|Other receivables       |  |           | 1  |        |  |  | 4  |  | 
|                        |  |           |    |        |  |  |    |  | 
|                        |  |           | 36 |        |  |  | 23 |  | 
|                        |  |           |    |        |  |  |    |  | 

6 Other liabilities

|                                   |  |           |    |        |  |  |   |  | 
|---------------------------------- |  | --------- | -- | ------ |  |  | - |  | 
|                                   |  |  million
|                                   |  |          
|                                   |  | Dec 31    |    | Dec 31 | 
|                                   |  | 2002      |    | 2001  
|                                   |  |           |    |       
|Dividends and dividend tax payable |  |           | 8  |        |  |  | 7 |  | 
|Accounts payable                   |  |           | 1  |        |  |  | 1 |  | 
|Corporation tax                    |  |           | 2  |        |  |  | 1 |  | 
|                                   |  |           |    |        |  |  |   |  | 
|                                   |  |           | 11 |        |  |  | 9 |  | 
|                                   |  |           |    |        |  |  |   |  | 

R4   Royal Dutch Petroleum Company



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##### Table of Contents



7 Share capital

The authorised capital as laid down in the Articles of Association is expressed
in euros and amounts to 1,792,000,000. The authorised share capital is divided
into 3,198,800,000 ordinary shares with a par value of 0.56 each and 1,500
priority shares with a par value of 448 each. The movements in issued and
paid-up capital during 2002 were as follows:

|                                                  |                         |  |                  |               |   |  |               |               |  
|------------------------------------------------- | ----------------------- |  | ---------------- | ------------- | - |  | ------------- | ------------- | -
|                                                  |                         |  | Number of shares |               | 
|                                                  |                         |  |                  |               |  
|Ordinary shares of N.fl.1.25                      |                         |  |                  |               |   |  |               |              
|                                                  | At beginning of year    |  |                  | 2,126,647,800 |   |  |               | 1,206,288,373 |  
|                                                  | Redenomination to 0.56 |  |                  |               |   |  |               | (15,365,605   | )
|                                                  | Cancelled during 2002   |  |                  | (27,362,800   | ) |  |               | (15,323,168   | )
|                                                  |                         |  |                  |               |   |  |               |               |  
|                                                  | At end of year          |  |                  | 2,099,285,000 |   |  |               | 1,175,599,600 |  
|                                                  |                         |  |                  |               |   |  |               |               |  
|Priority shares of N.fl.1,000                     |                         |  |                  |               |   |  |               |              
|                                                  | At beginning of year    |  |                  | 1,500         |   |  |               | 680,670       |  
|                                                  | Redenomination to 448  |  |                  |               |   |  |               | (8,670        | )
|                                                  | At end of year          |  |                  | 1,500         |   |  |               | 672,000       |  
|                                                  |                         |  |                  |               |   |  |               |               |  
|Total ordinary and priority
shares at end of year |                         |  | 2,099,286,500    |               |   |  | 1,176,271,600 |              
|                                                  |                         |  |                  |               |   |  |               |               |  

8 Other Statutory reserves

The other statutory reserves resulted from the redenomination from guilders
into euros of the nominal values of the shares.

9 Royal Dutch shares held by Group companies

The movements in 2002 in Royal Dutch shares held by Group companies were as
follows:

|                             |  |                  |            |           |  |            |       |            |  |              |       |  
|---------------------------- |  | ---------------- | ---------- | --------- |  | ---------- | ----- | ---------- |  | ------------ | ----- | -
|                             |  | Number of shares |            |  million
|                             |  |                  |            |          
|                             |  |                  |            |           |  |            |       |            |  | Royal Dutch 
|                             |  |                  |            |           |  |            |       |            |  | 60% interest
|                             |  |                  |            |           |  |            |       |            |  | in the      
|                             |  |                  |            |           |  | Book value |       | book value
|                             |  |                  |            |           |  |            |       |           
|Balance at beginning of year |  |                  | 26,674,267 |           |  |            | 1,549 |            |  |              | 929   |  
|Purchases                    |  |                  | 12,769,100 |           |  |            | 716   |            |  |              | 430   |  
|Sales and other movements    |  |                  | (328,174   | )         |  |            | (147  | )          |  |              | (88   | )
|                             |  |                  |            |           |  |            |       |            |  |              |       |  
|Balance at end of year       |  |                  | 39,115,193 |           |  |            | 2,118 |            |  |              | 1,271 |  
|                             |  |                  |            |           |  |            |       |            |  |              |       |  

These movements relate to the granting and exercise of stock options and to
other incentive plans as mentioned in Note 22 to the Financial Statements of
the Royal Dutch/Shell Group of Companies on pages G25 to G27.

10 List of companies of the Royal Dutch/Shell Group

A list of companies drawn up with due observance of the provisions in Articles
379 and 414, Book 2 of the Netherlands Civil Code, has been deposited at the
office of the Commercial Register in The Hague.

Royal Dutch Petroleum Company   R5



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##### Table of Contents



11 Remuneration of members of the Supervisory Board and Managing Directors

For the amounts borne in 2002 by Royal Dutch and by the Royal Dutch/Shell Group
of Companies in respect of remuneration of the Managing Directors, reference is
made to the relevant tables on pages R11 and R12.

For the amounts borne in 2002 by Royal Dutch and by the Royal Dutch/Shell Group
of Companies in respect of remuneration of the members of the Supervisory
Board, reference is made to the relevant table on page R13. This table also
includes amounts borne by the Royal Dutch/Shell Group of Companies in respect
of remuneration for three members of the Supervisory Board who served
simultaneously as Directors of these companies.

In addition to the pensions from a pension fund, ten former Managing Directors
receive retirement benefits for duties performed by them simultaneously in the
past as Directors of these Group companies. These retirement benefits have not
been insured but provisions have been made in respect thereof in accordance
with applicable accounting principles. In 2002, no additional pension benefits
have been granted to former Managing Directors, but a total amount of 463,004
has been added to these provisions.

R6   Royal Dutch Petroleum Company



---



##### Table of Contents



Remuneration

The following comprises the report on Managing Directors and Supervisory Board
members remuneration for the year ended December 31, 2002.

This report deals with the remuneration policy as it applies and will apply to
Group Managing Directors, including those who are also Managing Directors of
Royal Dutch, and to the members of the Supervisory Board of Royal Dutch. The
remuneration policy is subject to regular review. This report also contains the
disclosure of the individual remuneration of the Managing Directors and members
of the Supervisory Board of Royal Dutch.

Remuneration and Succession Review Committee

The Remuneration and Succession Review Committee (REMCO) is a joint committee
of the Supervisory Board of Royal Dutch and the Board of Shell Transport (see
page 66) and has responsibility for making recommendations on all forms of
remuneration with respect to Group Managing Directors.

During the year under review, the REMCO members appointed by the Supervisory
Board of Royal Dutch were Jonkheer Aarnout Loudon, Professor Joachim Milberg,
Henny de Ruiter (appointed July 1, 2002) and Lodewijk van Wachem (retired June
30, 2002), and the members appointed by the Board of Shell Transport were Nina
Henderson, Sir Peter Job and Sir Mark Moody-Stuart. The Chairman of the
Committee is currently Jonkheer Aarnout Loudon.

In accordance with the Articles of Association, the remuneration of the members
of the Royal Dutch Supervisory Board is the responsibility of the Supervisory
Board as a whole, with due observance of the aggregate amount fixed by the
General Meeting of Shareholders.

Remuneration policy

Group Managing Directors Remuneration

Philosophy

The objective of the remuneration philosophy is to attract and retain high
calibre individuals and motivate them towards the achievement of exceptional
performance that enhances the value of the Group. The remuneration structures
for Group Managing Directors are therefore designed to support alignment of
Group Managing Directors interests with the goals of the Group and its various
businesses and with shareholders interests.

Competitive framework

Remuneration levels are set by reference to the practice of global companies of
comparable size, complexity and international scope to that of the Group. Among
such companies there is an increasing emphasis on performance-linked variable
short and long-term pay. Consistent with this and the philosophy outlined
above, for on-target performance more than half of a Group Managing Directors
total remuneration will be performance-linked. This proportion is expected to
increase in line with market practice.

REMCO is provided with market data on the basis of which it annually reviews
remuneration levels and the proportions between fixed and variable pay.

Base salary and fees

The purpose of base salary (which is inclusive of Directors fees) is to
provide an element of fixed remuneration set at a competitive level that is
appropriate to the scope and complexity of the role of a Group Managing
Director.

Salary levels are set by reference to market-based salary scales that reflect
the collegiate nature of the Committee of Managing Directors. The scales were
increased by 6% with effect from July 1, 2002. The salary scales are reviewed
annually by REMCO and will be adjusted in line with market practice with effect
from July 1, 2003. Progression of an individual Group Managing Directors
salary to the target position is usually over a three-year period from
appointment.

Royal Dutch Petroleum Company   R7



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##### Table of Contents



Annual and deferred bonus

The purpose of the annual bonus plan is to motivate Group Managing Directors to
achieve annual results that further the Groups long-term objectives.

The target level of bonus for the year 2002 was 100% of base salary (2001 was
65% of base salary). The target for 2003 will be 100% of base salary.

Bonus awards are recommended by REMCO based on the extent of achievement of
challenging Group targets that are set as part of the annual Group business
plan. These targets encompass financial, customer, people, sustainable
development and other operational objectives. For 2002, financial targets
related to Total Shareholder Return (TSR) measured annually by the average
weighted share price performance plus dividends of Royal Dutch and Shell
Transport relative to other major integrated oil companies and Return on
Average Capital Employed (ROACE). Having regard to the Groups performance
against all targets, REMCO has recommended that the bonus payable to Group
Managing Directors in respect of the year 2002 is 115% of base salary. The same
approach will be adopted in 2003.

Since 2001, Group Managing Directors have been able to elect to defer up to
one-third of their annual bonus into shares, in the case of Royal Dutch
Managing Directors, Royal Dutch shares. The deferred bonus shares, together
with shares equivalent to the value of dividends payable on the deferred bonus
shares, are released three years after deferral. Provided the participants
remain in Group employment for three years following the deferral, or reach
normal retirement within the three-year period, they will also receive one
additional share for every two shares accumulated.

The purposes of the deferred bonus plan are to reward performance over a single
financial year, to align Group Managing Directors interests with shareholders
interests during the deferment period and to encourage share ownership in the
Company. There is accordingly no further performance test beyond that governing
performance in the relevant bonus year.

Neither annual nor deferred bonuses are pensionable.

Long-term incentives

The objective of long-term incentive arrangements is to ensure that Group
Managing Directors share the interests of shareholders by being rewarded for
share price growth, the creation of shareholder value and the achievement of
superior relative shareholder returns. The policy in relation to long-term
incentives applies to each of the Group Managing Directors.

Long-term incentives are currently awarded in the form of stock options.
Options are granted once a year under the Group Stock Option Plan which applies
to Group Managing Directors and senior staff.

Options granted before 2003 to Group Managing Directors may vest three years
after grant and remain exercisable until ten years after grant. Of the options
granted, 50% are subject to performance conditions and the proportion of such
50% which will either vest and become unconditional or lapse, will be
determined for Group Managing Directors at the discretion of REMCO using the
criteria below.

REMCO will only exercise its discretion in favour of vesting to the extent that
it is satisfied that the performance of the Group over the three-year vesting
period reflects the objective for long-term incentives. Accordingly, when
making its decision, REMCO takes into account a combination of TSR over the
three-year vesting period (measured by the average weighted share price
performance plus dividends of Royal Dutch and Shell Transport over the ten-day
period at the beginning and end of the vesting period) relative to a peer group
of other major integrated oil companies and other long-term indicators of Group
performance.

The latest tranche of stock options to vest was granted in March 2000 and the
stock options vested in March 2003. The measurement period for the options was
January 1, 2000 to December 31, 2002. The peer companies were BP,
ChevronTexaco, ExxonMobil and Total. The Royal Dutch/Shell Group of Companies
ranked fourth. REMCO considered other performance indicators including profits
over the three years and ROACE relative to the peer group.

Having considered all of these factors REMCO determined that 50% of the options
granted in March 2000 that were subject to its discretion should vest.

R8   Royal Dutch Petroleum Company



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##### Table of Contents



Options granted in 2003, and in subsequent years, will be 100% performance
linked. Performance will be measured over the three financial years prior to
grant. The policy, which will continue in future years, is that the levels of
grant will vary according to the ratings given by REMCO to the Groups
achievements against financial targets and will reflect competitive market
practice. The current financial targets are TSR relative to the other major
integrated oil companies and ROACE. These financial targets have been chosen as
they are consistent with the objective for long-term incentives and represent a
balanced test of the Groups internal operating efficiency and external
performance.

In addition it is proposed to introduce a new Long-term Incentive Plan (the
Plan). This proposal will be put to shareholders at the 2003 General Meetings
of Royal Dutch and Shell Transport.

Group Managing Directors and other selected senior executives will be eligible
to participate in the Plan. Group Managing Directors will be selected for
participation on the recommendation of REMCO. Participants will be made a
conditional award of shares in either Royal Dutch or Shell Transport. The
receipt of shares comprised in the award will be conditional on the participant
remaining in employment (subject to certain exceptions, including normal
retirement) and on the satisfaction of performance targets over the performance
period. The performance period will not be less than three consecutive
financial years. In the case of Group Managing Directors, REMCO will make
recommendations on the number of shares which may be conditionally awarded in
any year. Awards in any one year can range from zero to two times base salary,
but the maximum number of shares will only be received for exceptional
performance as described below.

If the adoption of the Plan is approved, the performance targets will be linked
to TSR (the average weighted share price performance plus dividends of Royal
Dutch and Shell Transport) relative to two separate groups of comparator
companies, over a performance period of three financial years. Two separate
comparator groups have been chosen because REMCO considers that it is
appropriate to test performance both against major home markets and industry
competitors. Relative TSR has been chosen as the performance test that most
closely aligns the interests of Group Managing Directors and senior executives
with those of shareholders.

The first comparator group will consist of the largest ten companies (by way of
market capitalisation) in the AEX index together with the largest twenty
companies (also by way of market capitalisation) in the FTSE 100 share index,
in each case, at the beginning of the relevant performance period. As at
January 1, 2003, the first comparatory group in addition to Royal Dutch and
Shell Transport, was AEX: ABN AMRO, AEGON, Ahold, Akzo Nobel, Heineken, ING
Group, KPN, Philips and Unilever N.V.; and FTSE: Anglo American, AstraZeneca,
Aviva, Barclays, BG Group, BP, British American Tobacco, BT Group, Diageo,
GlaxoSmithKline, HBOS, HSBC Holdings, Lloyds TSB Group, National Grid Transco,
Rio Tinto, The Royal Bank of Scotland, Tesco, Unilever PLC and Vodafone Group.
In the case of Royal Dutch and Shell Transport, and Unilever N.V. and Unilever
PLC, the weighted average TSR of the two companies will be used.

The second comparator group will be the five major integrated oil companies,
which, as at January 1, 2003, were BP, ChevronTexaco, ExxonMobil, the Royal
Dutch/Shell Group of Companies and Total.

Half of each conditional award will be tested against the first comparator
group and half against the second comparator group. If shareholders approve the
adoption of the Plan, the comparator groups described above will be used for
the first performance period which will be from January 1, 2003 to December 31,
2005.

For the first comparator group, 100% of the shares tested against that group
will be received for 75th percentile and above performance and 25% will be
received for median performance with a straight-line calculation between these
two points. No shares will be received for performance below the median. This
method of calculation has been chosen because it is consistent both with
shareholders expectations and market practice.

For the second comparator group, 100% of the shares tested against that group
will be received if the Royal Dutch/Shell Group of Companies is in first place,
75% for second place and 50% for third place. No shares will be received for
fourth or fifth place.

Royal Dutch Petroleum Company   R9



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##### Table of Contents



All-employee Share Schemes

Group Managing Directors are not eligible to participate in the Global Employee
Share Purchase Plan.

Pensions

For the Dutch Managing Directors of Royal Dutch the principal source of their
pensions is the Stichting Shell Pensioenfonds. This is a defined benefit fund
to which Managing Directors contribute the same percentage of relevant earnings
as other employees. For employees in the Netherlands this percentage was zero
during the year. The employing companies contribute to the pension fund on the
advice of actuaries, and the employing company contribution rate in 2002 was
0%. The principal source of pension for the non-Dutch Managing Director of
Royal Dutch is the Shell Overseas Contributory Pension Fund (SOCPF). This is
also a defined benefit fund to which the Managing Director contributes 4% of
relevant earnings. The employing company also contributes to the Fund and, upon
actuarial advice, the employing companys contribution rate in 2002 was 10% of
relevant earnings. Managing Directors retire on June 30, following their 60th
birthday. There are provisions in both pension funds for a surviving dependant
benefit of 70% or, in the case of SOCPF, 60% of actual or prospective pension.
In the case of death-in-service, a lump sum of two times annual salary is paid,
or, in the case of SOCPF, three times annual salary.

Advisors

In reaching its decisions on Group Managing Directors remuneration, REMCO was
materially assisted by advice from John Hofmeister (Group Human Resources
Director) and Michael Reiff (Group Head of Remuneration and Benefits).

External data are collated by internal sources and used in the preparation of
internal briefing papers that REMCO considers, in common with other factors,
when making its decisions. Accordingly, there is no single external source that
provides material advice or services, nor is there a formal external advisor
appointed by REMCO. At its discretion, REMCO may seek external advice on its
own account and, in the year under review, it received such advice from Towers
Perrin, which also provided companies within the Group with advice on pensions,
compensation, communication and HR management.

Managing Directors Contracts of Service

No Managing Director has or, during the financial year, had a contract of
service with Royal Dutch. The Managing Directors of Royal Dutch have employment
contracts with one of the Group holding companies that provide entitlement to
the statutory notice period applicable to employees in the Netherlands  no
more than three months. Similarly, such contracts expire on the expected date
of retirement which, in the case of the Managing Directors, is June 30
following their 60th birthday. There are no predetermined termination
compensation arrangements in place for Managing Directors of Royal Dutch.

Harry Roels resigned from his positions as Managing Director of Royal Dutch and
a Group Managing Director for personal reasons on June 30, 2002 at his own
request. He was paid 2.2 million upon termination of his contract of service.
In recommending this departure arrangement, REMCO took into account his more
than 30 years valuable service to the Group and considered it appropriate to
base the calculation of this amount on a formula applicable to all senior staff
in the Netherlands with whom severance arrangements are made.

R10   Royal Dutch Petroleum Company



---



##### Table of Contents



|                                          |  |      |           |      |  |      |           |   |  |  |           | 
|----------------------------------------- |  | ---- | --------- | ---- |  | ---- | --------- | - |  |  | --------- | 
|Emoluments of Managing Directors          |  |    
|                                          |  |     
|                                          |  | 2002 |           | 2001 |  | 2000
|                                          |  |      |           |      |  |     
|Jeroen van der Veer                       |  |      |           |      |  |      |           |   |  |  |           | 
|Salaries                                  |  |      | 1,013,729 |      |  |      | 923,929   |   |  |  | 824,201   | 
|Performance-related elementa              |  |      | 1,230,500 | b    |  |      | 619,450   | b |  |  | 398,601   | 
|                                          |  |      |           |      |  |      |           |   |  |  |           | 
|Total cash                                |  |      | 2,244,229 |      |  |      | 1,543,379 |   |  |  | 1,222,802 | 
|Other compensationc                       |  |      | 4,768     |      |  |      | 4,620     |   |  |  | 4,486     | 
|Realised share option gains upon exercise |  |      |          |      |  |      | 293,440   |   |  |  | 339,600   | 
|                                          |  |      |           |      |  |      |           |   |  |  |           | 
|                                          |  |      | 2,248,997 |      |  |      | 1,841,439 |   |  |  | 1,566,888 | 
|                                          |  |      |           |      |  |      |           |   |  |  |           | 
|Malcolm Brinded                           |  |      |           |      |  |      |           |   |  |  |           | 
|Salaries                                  |  |      | 372,500   |      |  |      |          |   |  |  |          | 
|Performance-related elementa              |  |      | 428,375   | b    |  |      |          |   |  |  |          | 
|Total cash                                |  |      | 800,875   |      |  |      |          |   |  |  |          | 
|                                          |  |      |           |      |  |      |           |   |  |  |           | 
|Other compensationc                       |  |      | 2,210     | d    |  |      |          |   |  |  |          | 
|Realised share option gains upon exercise |  |      |          |      |  |      |          |   |  |  |          | 
|                                          |  |      |           |      |  |      |           |   |  |  |           | 
|                                          |  |      | 803,085   |      |  |      |          |   |  |  |          | 
|                                          |  |      |           |      |  |      |           |   |  |  |           | 
|Harry Roels                               |  |      |           |      |  |      |           |   |  |  |           | 
|Salaries                                  |  |      | 2,587,973 | e    |  |      | 743,779   |   |  |  | 697,598   | 
|Performance-related elementa              |  |      |          |      |  |      | 501,430   |   |  |  | 318,145   | 
|                                          |  |      |           |      |  |      |           |   |  |  |           | 
|Total cash                                |  |      | 2,587,973 |      |  |      | 1,245,209 |   |  |  | 1,015,743 | 
|Other compensationc                       |  |      | 2,282     |      |  |      | 4,553     |   |  |  | 4,421     | 
|Realised share option gains upon exercise |  |      |          |      |  |      |          |   |  |  |          | 
|                                          |  |      |           |      |  |      |           |   |  |  |           | 
|                                          |  |      | 2,590,255 |      |  |      | 1,249,762 |   |  |  | 1,020,164 | 
|                                          |  |      |           |      |  |      |           |   |  |  |           | 
|Walter van de Vijver                      |  |      |           |      |  |      |           |   |  |  |           | 
|Salaries                                  |  |      | 735,095   |      |  |      | 342,536   |   |  |  |          | 
|Performance-related elementa              |  |      | 902,750   |      |  |      | 221,330   |   |  |  |          | 
|                                          |  |      |           |      |  |      |           |   |  |  |           | 
|Total cash                                |  |      | 1,637,845 |      |  |      | 563,866   |   |  |  |          | 
|Other compensationc                       |  |      | 18,091    | f    |  |      | 2,162     |   |  |  |          | 
|Realised share option gains upon exercise |  |      |          |      |  |      |          |   |  |  |          | 
|                                          |  |      |           |      |  |      |           |   |  |  |           | 
|                                          |  |      | 1,655,936 |      |  |      | 566,028   |   |  |  |          | 
|                                          |  |      |           |      |  |      |           |   |  |  |           | 



---

|a |  | The performance-related element is included in the year to which it relates.                                                                                                                                                  
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|b |  | Of which one-third was deferred under the Deferred Bonus Plan.                                                                                                                                                                
| 
|c |  | Includes social security premiums paid by the employer and employers contribution to
the health insurance plan and, where applicable, other benefits stated at a value
employed by the Fiscal Authorities in the Netherlands.
| 
|d |  | Exclusive of deferred payment in shares amounting to £386,000 granted in 1999.                                                                                                                                                
| 
|e |  | Includes lump sum on departure.                                                                                                                                                                                               
| 
|f |  | Exclusive of deferred payment in shares amounting to 688,839 granted in 1999.                                                                                                                                                

|                     |  |           |            |          |  |          |    |             |  |             |     |         |  |  |     |  |  |  |    |  
|-------------------- |  | --------- | ---------- | -------- |  | -------- | -- | ----------- |  | ----------- | --- | ------- |  |  | --- |  |  |  | -- | -
|Pensions             |  |           |  thousand
|                     |  |           |           
|                     |  |           |            |          |  | Years of |    | Increase in |  | Accumulated |     | Pension
|                     |  |           |            |          |  | Group    |    | accrued     |  | annual      |     | premium
|                     |  |           |            |          |  | service  |    | pension     |  | pension     |     | 2002   
|                     |  | Age as at |            | as at    |  | during   |    | as at       |  | paid by    
|                     |  | 31.12.02  |            | 31.12.02 |  | 2002     |    | 31.12.02    |  | employer   
|                     |  |           |            |          |  |          |    |             |  |            
|Jeroen van der Veer  |  |           | 55         |          |  |          | 31 |             |  |             | 67  |         |  |  | 599 |  |  |  | 0  |  
|Malcolm Brinded      |  |           | 49         |          |  |          | 28 |             |  |             | 7   | a       |  |  | 418 |  |  |  | 37 | a
|Harry Roelsb         |  |           | 54         |          |  |          | 30 |             |  |             | (18 | )       |  |  | 435 |  |  |  | 0  |  
|Walter van de Vijver |  |           | 47         |          |  |          | 23 |             |  |             | 27  |         |  |  | 314 |  |  |  | 0  |  



---

|a |  | As from July 1, 2002.                                                                                            
|- |  | -----------------------------------------------------------------------------------------------------------------
| 
|b |  | Mr Roels left Group service on June 30, 2002, with a deferred pension payable as
from his normal retirement date.

Royal Dutch Petroleum Company   R11



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##### Table of Contents



Share options

The interests of the Managing Directors and former Managing Directors under the
Group Share Plans in Royal Dutch and Shell Transport are shown below:

Options Royal Dutch

|                      |  |          |         |             |  |           |         |          |  |          |         |        |  |          |       |        |  |  |       |  |  |  |          | 
|--------------------- |  | -------- | ------- | ----------- |  | --------- | ------- | -------- |  | -------- | ------- | ------ |  | -------- | ----- | ------ |  |  | ----- |  |  |  | -------- | 
|Number of options     |  |         |        
|                      |  |          |        
|                      |  |          |         |             |  | Exercised |         |          |  |          |         |        |  |          |       | Market |  |  |       | 
|                      |  | Granted  |         | (cancelled) |  |           |         |          |  |          |         |        |  | price at |       |        |  | 
|At                    |  | during   |         | during      |  | At        |         | Exercise |  | date of  |         | Expiry
|01.01.02              |  | the year |         | the year    |  | 31.12.02  |         | price    |  | exercise |         | date  
|                      |  |          |         |             |  |           |         |          |  |          |         |       
|Jeroen van der Veer   |  |          |         |             |  |           |         |          |  |          |         |        |  |          |       |        |  |  |       | 
|16,500                |  |          |        |             |  |           | (16,500 | )        |  |          |        |        |  |          | 48.92 |        |  |  |      |  |  |  | 10.12.02 | 
|40,850                |  |          |        |             |  |           |        |          |  |          | 40,850  |        |  |          | 41.16 |        |  |  |      |  |  |  | 21.12.08 | 
|45,000                |  |          |        |             |  |           |        |          |  |          | 45,000  |        |  |          | 59.54 |        |  |  |      |  |  |  | 22.03.10 | 
|80,000                |  |          |        |             |  |           |        |          |  |          | 80,000  |        |  |          | 62.60 |        |  |  |      |  |  |  | 25.03.11 | 
|                     |  |          | 105,000 |             |  |           |        |          |  |          | 105,000 |        |  |          | 62.10 |        |  |  |      |  |  |  | 20.03.12 | 
|                      |  |          |         |             |  |           |         |          |  |          |         |        |  |          |       |        |  |  |       |  |  |  |          | 
|Malcolm Brinded       |  |          |         |             |  |           |         |          |  |          |         |        |  |          |       |        |  |  |       | 
|                     |  |          | 50,000  |             |  |           |        |          |  |          | 50,000  |        |  |          | 62.10 |        |  |  |      |  |  |  | 20.03.12 | 
|                      |  |          |         |             |  |           |         |          |  |          |         |        |  |          |       |        |  |  |       |  |  |  |          | 
|Harry Roels           |  |          |         |             |  |           |         |          |  |          |         |        |  |          |       |        |  |  |       | 
|14,000                |  |          |        |             |  |           | (14,000 | )        |  |          |        |        |  |          | 48.92 |        |  |  |      |  |  |  | 10.12.02 | 
|28,000                |  |          |        |             |  |           |        |          |  |          | 28,000  |        |  |          | 41.16 |        |  |  |      |  |  |  | 29.06.07 | 
|45,000                |  |          |        |             |  |           |        |          |  |          | 45,000  |        |  |          | 59.54 |        |  |  |      |  |  |  | 29.06.07 | 
|62,000                |  |          |        |             |  |           |        |          |  |          | 62,000  |        |  |          | 62.60 |        |  |  |      |  |  |  | 29.06.07 | 
|                      |  |          |         |             |  |           |         |          |  |          |         |        |  |          |       |        |  |  |       |  |  |  |          | 
|Walter van de Vijver  |  |          |         |             |  |           |         |          |  |          |         |        |  |          |       |        |  |  |       | 
|10,000                |  |          |        |             |  |           |        |          |  |          | 10,000  |        |  |          | 48.92 |        |  |  |      |  |  |  | 10.12.07 | 
|20,000                |  |          |        |             |  |           |        |          |  |          | 20,000  |        |  |          | 41.16 |        |  |  |      |  |  |  | 21.12.08 | 
|32,000                |  |          |        |             |  |           |        |          |  |          | 32,000  |        |  |          | 59.54 |        |  |  |      |  |  |  | 22.03.10 | 
|10,000                |  |          |        |             |  |           |        |          |  |          | 10,000  |        |  |          | 68.73 |        |  |  |      |  |  |  | 22.08.10 | 
|40,000                |  |          |        |             |  |           |        |          |  |          | 40,000  |        |  |          | 62.60 |        |  |  |      |  |  |  | 25.03.11 | 
|                     |  |          | 75,000  |             |  |           |        |          |  |          | 75,000  |        |  |          | 62.10 |        |  |  |      |  |  |  | 20.03.12 | 
|                      |  |          |         |             |  |           |         |          |  |          |         |        |  |          |       |        |  |  |       |  |  |  |          | 
|Maarten van den Bergh |  |          |         |             |  |           |         |          |  |          |         |        |  |          |       |        |  |  |       | 
|57,950                |  |          |        |             |  |           | 20,000  |          |  |          | 37,950  |        |  |          | 41.16 |        |  |  | 59.35 |  |  |  | 29.06.05 | 
|                      |  |          |         |             |  |           |         |          |  |          |         |        |  |          |       |        |  |  |       |  |  |  |          | 

Options Shell Transport

|                  |  |          |   |             |  |           |   |          |  |          |         |        |  |          |     |        |  |  |   |  |  |  |          | 
|----------------- |  | -------- | - | ----------- |  | --------- | - | -------- |  | -------- | ------- | ------ |  | -------- | --- | ------ |  |  | - |  |  |  | -------- | 
|Number of options |  | pence    |  
|                  |  |          |  
|                  |  |          |   |             |  | Exercised |   |          |  |          |         |        |  |          |     | Market |  |  |   | 
|                  |  | Granted  |   | (cancelled) |  |           |   |          |  |          |         |        |  | price at |     |        |  | 
|At                |  | during   |   | during      |  | At        |   | Exercise |  | date of  |         | Expiry
|01.01.02          |  | the year |   | the year    |  | 31.12.02  |   | price    |  | exercise |         | date  
|                  |  |          |   |             |  |           |   |          |  |          |         |       
|Malcolm Brinded   |  |          |   |             |  |           |   |          |  |          |         |        |  |          |     |        |  |  |   | 
|37,500            |  |          |  |             |  |           |  |          |  |          | 37,500  |        |  |          | 439 |        |  |  |  |  |  |  | 10.12.07 | 
|139,200           |  |          |  |             |  |           |  |          |  |          | 139,200 |        |  |          | 363 |        |  |  |  |  |  |  | 21.12.08 | 
|245,000           |  |          |  |             |  |           |  |          |  |          | 245,000 |        |  |          | 505 |        |  |  |  |  |  |  | 22.03.10 | 
|14,000            |  |          |  |             |  |           |  |          |  |          | 14,000  |        |  |          | 563 |        |  |  |  |  |  |  | 12.11.10 | 
|278,200           |  |          |  |             |  |           |  |          |  |          | 278,200 |        |  |          | 552 |        |  |  |  |  |  |  | 25.03.11 | 
|                  |  |          |   |             |  |           |   |          |  |          |         |        |  |          |     |        |  |  |   |  |  |  |          | 

R12   Royal Dutch Petroleum Company



---



##### Table of Contents



Remuneration of Members of the Supervisory Board

The Articles of Association provide for an amount to be fixed by the General
Meeting that shall serve as the basis for the remuneration of members of the
Supervisory Board. At the General Meeting held on May 16, 2002, that amount was
set at 75,000 multiplied by the number of members of the Supervisory Board
holding office during any year or proportionately during part of a year. The
amount so fixed constitutes the maximum aggregate remuneration in respect of
any year for all members of the Supervisory Board. Out of the funds so
earmarked, the Supervisory Board fixes the amount of the remuneration for each
of its members, taking into account any special duties performed by a member.

Within the limits set by shareholders, the levels of remuneration are reviewed
by the Supervisory Board from time to time and are adjusted when appropriate.
At its last review the Supervisory Board resolved to increase the Board fees to
55,000 per annum and the additional fee for the Chairman to 15,000 per annum,
with effect from January 1, 2003. Also an attendance fee amounting to
2,375 per meeting will be payable to Board members required to make
intercontinental trips to attend Board meetings. Fees for membership of the
Committees of the Board were not changed.

|                                                   |  |      |        |      |  |      |        |  |  |  |        | 
|-------------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|Emoluments of the Members of the Supervisory Board |  |    
|                                                   |  |     
|                                                   |  | 2002 |        | 2001 |  | 2000
|                                                   |  |      |        |      |  |     
|Aad Jacobs                                         |  |      |        |      |  |      |        |  |  |  |        | 
|Supervisory Board fees                             |  |      | 51,750 |      |  |      | 45,378 |  |  |  | 45,378 | 
|Committee fees                                     |  |      | 7,000  |      |  |      | 6,807  |  |  |  | 10,210 | 
|                                                   |  |      |        |      |  |      |        |  |  |  |        | 
|                                                   |  |      | 58,750 |      |  |      | 52,185 |  |  |  | 55,588 | 
|                                                   |  |      |        |      |  |      |        |  |  |  |        | 
|Maarten van den Bergh                              |  |      |        |      |  |      |        |  |  |  |        | 
|Supervisory Board fees                             |  |      | 46,000 |      |  |      | 45,378 |  |  |  | 22,689 | 
|Committee fees                                     |  |      | 7,000  |      |  |      | 6,807  |  |  |  | 3,403  | 
|Holding Company fees                               |  |      | 29,021 |      |  |      | 29,148 |  |  |  | 14,808 | 
|                                                   |  |      |        |      |  |      |        |  |  |  |        | 
|                                                   |  |      | 82,021 |      |  |      | 81,333 |  |  |  | 40,900 | 
|                                                   |  |      |        |      |  |      |        |  |  |  |        | 
|Jonkheer Aarnout Loudon                            |  |      |        |      |  |      |        |  |  |  |        | 
|Supervisory Board fees                             |  |      | 46,000 |      |  |      | 45,378 |  |  |  | 45,378 | 
|Committee fees                                     |  |      | 14,000 |      |  |      | 13,613 |  |  |  | 13,613 | 
|                                                   |  |      |        |      |  |      |        |  |  |  |        | 
|                                                   |  |      | 60,000 |      |  |      | 58,991 |  |  |  | 58,991 | 
|                                                   |  |      |        |      |  |      |        |  |  |  |        | 
|Professor Hubert Markl                             |  |      |        |      |  |      |        |  |  |  |        | 
|Supervisory Board fees                             |  |      | 23,000 |      |  |      |       |  |  |  |       | 
|Committee fees                                     |  |      |       |      |  |      |       |  |  |  |       | 
|                                                   |  |      |        |      |  |      |        |  |  |  |        | 
|                                                   |  |      | 23,000 |      |  |      |       |  |  |  |       | 
|                                                   |  |      |        |      |  |      |        |  |  |  |        | 
|Professor Joachim Milberg                          |  |      |        |      |  |      |        |  |  |  |        | 
|Supervisory Board fees                             |  |      | 46,000 |      |  |      | 45,378 |  |  |  | 22,689 | 
|Committee fees                                     |  |      | 7,000  |      |  |      | 6,807  |  |  |  | 3,403  | 
|                                                   |  |      |        |      |  |      |        |  |  |  |        | 
|                                                   |  |      | 53,000 |      |  |      | 52,185 |  |  |  | 26,092 | 
|                                                   |  |      |        |      |  |      |        |  |  |  |        | 
|Lawrence Ricciardi                                 |  |      |        |      |  |      |        |  |  |  |        | 
|Supervisory Board fees                             |  |      | 46,000 |      |  |      | 22,689 |  |  |  |       | 
|Committee fees                                     |  |      |       |      |  |      |       |  |  |  |       | 
|                                                   |  |      |        |      |  |      |        |  |  |  |        | 
|                                                   |  |      | 46,000 |      |  |      | 22,689 |  |  |  |       | 
|                                                   |  |      |        |      |  |      |        |  |  |  |        | 
|Henny de Ruiter                                    |  |      |        |      |  |      |        |  |  |  |        | 
|Supervisory Board fees                             |  |      | 46,000 |      |  |      | 45,378 |  |  |  | 45,378 | 
|Committee fees                                     |  |      | 10,500 |      |  |      | 6,807  |  |  |  | 6,807  | 
|Holding Company fees                               |  |      | 29,021 |      |  |      | 29,148 |  |  |  | 29,520 | 
|                                                   |  |      |        |      |  |      |        |  |  |  |        | 
|                                                   |  |      | 85,521 |      |  |      | 81,333 |  |  |  | 81,705 | 
|                                                   |  |      |        |      |  |      |        |  |  |  |        | 
|Jan Timmer                                         |  |      |        |      |  |      |        |  |  |  |        | 
|Supervisory Board fees                             |  |      | 46,000 |      |  |      | 45,378 |  |  |  | 45,378 | 
|Committee fees                                     |  |      | 14,000 |      |  |      | 13,613 |  |  |  | 13,613 | 
|                                                   |  |      |        |      |  |      |        |  |  |  |        | 
|                                                   |  |      | 60,000 |      |  |      | 58,991 |  |  |  | 58,991 | 
|                                                   |  |      |        |      |  |      |        |  |  |  |        | 
|Lodewijk van Wachem                                |  |      |        |      |  |      |        |  |  |  |        | 
|Supervisory Board fees                             |  |      | 28,750 |      |  |      | 56,723 |  |  |  | 56,723 | 
|Committee fees                                     |  |      | 3,500  |      |  |      | 6,807  |  |  |  | 6,807  | 
|Holding Company fees                               |  |      | 14,570 |      |  |      | 29,148 |  |  |  | 29,520 | 
|                                                   |  |      |        |      |  |      |        |  |  |  |        | 
|                                                   |  |      | 46,820 |      |  |      | 92,678 |  |  |  | 93,050 | 
|                                                   |  |      |        |      |  |      |        |  |  |  |        | 

Royal Dutch Petroleum Company   R13



---



##### Table of Contents



Group Share Plans

Set out below is a summary of the principal employee share schemes operated by
Group companies*. The shares subject to the plans are existing issued shares of
the Company and no dilution of shareholders equity is involved. Shares to be
delivered by a Group company under these plans are generally bought in the
market at the time the commitment thereto is being made.

Group Stock Option Plans

Under these plans, eligible employees are granted options over shares of Royal
Dutch or Shell Transport. The price at which the shares can be bought (the
exercise price) will not be less than the fair market value of the shares at
the date the options were granted. This is calculated as the average of the
stock exchange opening and closing prices over the five business days ending on
the date of grant, except for the USA where the grant price is the average of
the stock exchange opening and closing prices on the date of grant.

Options are exercisable three years from grant. Options lapse ten years after
grant or, if earlier, on resignation from Group employment (subject to certain
exceptions). For Group Managing Directors and the most senior executives, a
proportion of the options granted is subject to performance conditions.

For Group Managing Directors and the most senior executives 100% of options
granted in 2003 and in subsequent years will be subject to performance
conditions.

Restricted Stock Plan

Grants are made under this plan on a highly selective basis for recruitment and
retention of senior staff. A maximum of 250,000 Royal Dutch shares (or
equivalent value in Shell Transport shares) can be granted under the plan in
any year. Shares are granted subject to a three-year restriction period. The
shares, together with additional shares equivalent to the value of the
dividends payable over the restriction period, are released to the individual
at the end of the three-year period, provided that the individual has remained
in employment. Group Managing Directors are not eligible to participate in the
Restricted Stock Plan.

Global Employee Share Purchase Plan

This broad-based plan enables employees to make contributions, which are
applied quarterly to purchase Royal Dutch or Shell Transport shares at current
market value. If the acquired shares are retained in the Plan until the end of
the twelve-month cycle the employee receives an additional 15% share match. In
the USA a variant of this plan is operated where contributions are applied to
buy Royal Dutch shares at the end of the twelve-month cycle. The purchase price
is the lower of the market price on the first or last trading day of the cycle
reduced by 15%. Group Managing Directors are not eligible to participate in the
Global Employee Share Purchase Plan.

Shell Sharesave Scheme

In lieu of the Global Employee Share Purchase Plan employees in the UK continue
to participate in the Shell Sharesave Scheme. Options are granted over shares
of Shell Transport at prices not less than market value on a date not more than
30 days before grant and are normally exercisable after a three-year or
five-year contractual savings period.

Shell All-employee Share Purchase Plan

Employees in the UK may now participate in the Shell All-employee Share
Purchase Plan which is designed to encourage employee participation in their
company. Employees invest amounts up to a
maximum of £125 per month in Shell Transport shares at the current market value
using funds deducted from their monthly salary. The contributions are not
liable to income tax but, to maintain the tax benefit, the shares must be held
in the Plan for a defined period (normally five years).



---

|* |  | Details of the number of shares held by Group companies in connection
with the above plans are shown in Note 22 of the Group Financial Statements
on pages G25 to G27.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

R14   Royal Dutch Petroleum Company



---



##### Table of Contents






The Shell Transport and Trading Company, Public Limited Company

Report of Independent Accountants

To: The ShellTransport and Trading Company, Public Limited Company

We have audited the Financial Statements of The ShellTransport and Trading
Company, Public Limited Company for the years 2002, 2001 and 2000 appearing on
pages S2 to S8. The preparation of the Financial Statements is the
responsibility of the Companys Directors. Our responsibility is to express an
opinion on those Financial Statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the Financial Statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the Financial
Statements. An audit also includes assessing the accounting principles used and
significant estimates made by the Companys Directors in the preparation of the
Financial Statements, as well as evaluating the overall Financial Statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the Financial Statements referred to above present fairly, in
all material respects, the financial position of The ShellTransport and
Trading Company, Public Limited Company at December 31, 2002 and 2001, and the
results of its operations and its cash flows for each of the three years in the
period ended December 31, 2002 in conformity with the accounting principles
described in Note 1 on page S4.

PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP, London

March 6, 2003

The Shell Transport and Trading Company, Public Limited Company   S1



---



##### Table of Contents



Financial Statements

|                                                                           |  |      |   |      |  |           |         |      |  |  |         |  |  |  |         | 
|-------------------------------------------------------------------------- |  | ---- | - | ---- |  | --------- | ------- | ---- |  |  | ------- |  |  |  | ------- | 
|Profit and Loss Account                                                    |  |      |   |      |  | £ million
|                                                                           |  |      |   |      |  |          
|                                                                           |  | Note |   | 2002 |  | 2001      |         | 2000
|                                                                           |  |      |   |      |  |           |         |     
|Income from shares in companies
of the Royal Dutch/Shell Group             |  |      | 3 |      |  |           | 1,403.2 |      |  |  | 2,545.6 |  |  |  | 2,307.4 | 
|                                                                           |  |      |   |      |  |           |         |      |  |  |         |  |  |  |         | 
|Interest and other income                                                  |  |      |   |      |  |           | 5.4     |      |  |  | 5.8     |  |  |  | 4.5     | 
|                                                                           |  |      |   |      |  |           |         |      |  |  |         |  |  |  |         | 
|                                                                           |  |      |   |      |  |           | 1,408.6 |      |  |  | 2,551.4 |  |  |  | 2,311.9 | 
|Administrative expenses                                                    |  |      |   |      |  |           | 4.2     |      |  |  | 3.4     |  |  |  | 3.3     | 
|                                                                           |  |      |   |      |  |           |         |      |  |  |         |  |  |  |         | 
|Profit on ordinary activities before taxation                              |  |      |   |      |  |           | 1,404.4 |      |  |  | 2,548.0 |  |  |  | 2,308.6 | 
|Tax on profit on ordinary activities                                       |  |      | 4 |      |  |           | 0.4     |      |  |  | 0.7     |  |  |  | 0.3     | 
|                                                                           |  |      |   |      |  |           |         |      |  |  |         |  |  |  |         | 
|Distributable profit for the year                                          |  |      |   |      |  |           | 1,404.0 |      |  |  | 2,547.3 |  |  |  | 2,308.3 | 
|                                                                           |  |      |   |      |  |           |         |      |  |  |         |  |  |  |         | 
|Distributable profit for the year                                          |  |      |   |      |  |           | 1,404.0 |      |  |  | 2,547.3 |  |  |  | 2,308.3 | 
|Share of earnings retained by companies
of the Royal Dutch/Shell     Group |  |      |   |      |  |           | 1,105.3 |      |  |  | 469.0   |  |  |  | 1,052.6 | 
|                                                                           |  |      |   |      |  |           |         |      |  |  |         |  |  |  |         | 
|Earnings for the year
attributable to shareholders                         |  |      |   |      |  |           | 2,509.3 |      |  |  | 3,016.3 |  |  |  | 3,360.9 | 
|                                                                           |  |      |   |      |  |           |         |      |  |  |         |  |  |  |         | 
|Aggregate dividends paid and proposed                                      |  |      |   |      |  |           | 1,475.0 |      |  |  | 1,440.6 |  |  |  | 1,452.6 | 
|                                                                           |  |      |   |      |  |           |         |      |  |  |         |  |  |  |         | 

All results relate to continuing operations.

|                                                   |                                |                                                                          |  |   |  |           |         |      |       |      |         |      |       |  |         |  |       | 
|-------------------------------------------------- | ------------------------------ | ------------------------------------------------------------------------ |  | - |  | --------- | ------- | ---- | ----- | ---- | ------- | ---- | ----- |  | ------- |  | ----- | 
|Statement of Retained Profit                       |                                |                                                                          |  |   |  | £ million
|                                                   |                                |                                                                          |  |   |  |          
|                                                   |                                |                                                                          |  |   |  |           |         | 2002 |       | 2001 |         | 2000
|                                                   |                                |                                                                          |  |   |  |           |         |      |       |      |         |     
|Distributable profit for the year                  |                                |                                                                          |  |   |  |           | 1,404.0 |      |       |      | 2,547.3 |      |       |  | 2,308.3 | 
|Distributable retained profit
at beginning of year |                                |                                                                          |  |   |  |           | 884.0   |      |       |      | 876.3   |      |       |  | 20.6    | 
|                                                   |                                |                                                                          |  |   |  |           |         |      |       |      |         |      |       |  |         | 
|                                                   |                                |                                                                          |  |   |  |           | 2,288.0 |      |       |      | 3,423.6 |      |       |  | 2,328.9 | 
|                                                   |                                |                                                                          |  |   |  |           |         |      |       |      |         |      |       |  |         | 
|                                                   | Dividends on non-equity shares |                                                                          |  | 6 |  |           |         |      |       |      |         |      |       |  |         |  |      
|                                                   |                                | First Preference shares                                                  |  |   |  |           |         |      | 0.1   |      |         |      | 0.1   |  |         |  | 0.1   | 
|                                                   |                                | Second Preference shares                                                 |  |   |  |           |         |      | 0.7   |      |         |      | 0.7   |  |         |  | 0.7   | 
|                                                   |                                |                                                                          |  |   |  |           |         |      |       |      |         |      |       |  |         | 
|                                                   |                                |                                                                          |  |   |  |           | 0.8     |      |       |      | 0.8     |      |       |  | 0.8     | 
|                                                   |                                |                                                                          |  |   |  |           |         |      |       |      |         |      |       |  |         | 
|                                                   |                                |                                                                          |  |   |  |           | 2,287.2 |      |       |      | 3,422.8 |      |       |  | 2,328.1 | 
|                                                   | Dividends on equity shares:    |                                                                          |  | 6 |  |           |         |      |       |      |         |      |       |  |         |  |      
|                                                   | 25p Ordinary shares            |                                                                          |  |   |  |           |         |      |       |      |         |      |       |  |         |  |      
|                                                   |                                | Interim of 5.95p in 2002, 5.85p
in 2001 and 5.7p in 2000                 |  |   |  |           |         |      | 578.0 |      |         |      | 574.4 |  |         |  | 566.8 | 
|                                                   |                                | Proposed final of 9.30p in 2002, final
of 8.95p in 2001 and 8.9p in 2000 |  |   |  |           |         |      | 899.1 |      |         |      | 872.5 |  |         |  | 885.0 | 
|                                                   |                                | Reduction due to share buyback
and unclaimed dividends                   |  |   |  |           |         |      | 2.9   |      |         |      | 7.1   |  |         |  |      | 
|                                                   |                                |                                                                          |  |   |  |           |         |      |       |      |         |      |       |  |         | 
|                                                   |                                |                                                                          |  |   |  |           | 1,474.2 |      |       |      | 1,439.8 |      |       |  | 1,451.8 | 
|                                                   |                                |                                                                          |  |   |  |           |         |      |       |      |         |      |       |  |         | 
|Share repurchase including expenses                |                                |                                                                          |  |   |  |           | 369.6   |      |       |      | 1,099.0 |      |       |  |        | 
|                                                   |                                |                                                                          |  |   |  |           |         |      |       |      |         |      |       |  |         | 
|Distributable retained
profit at end of year       |                                |                                                                          |  |   |  |           | 443.4   |      |       |      | 884.0   |      |       |  | 876.3   | 
|                                                   |                                |                                                                          |  |   |  |           |         |      |       |      |         |      |       |  |         | 

|                                                                       |  |       |      |      |  |      |      |  |  |  |      | 
|---------------------------------------------------------------------- |  | ----- | ---- | ---- |  | ---- | ---- |  |  |  | ---- | 
|Earnings per 25p Ordinary sharea                                       |  | pence
|                                                                       |  |      
|                                                                       |  | 2002  |      | 2001 |  | 2000
|                                                                       |  |       |      |      |  |     
|Distributable profit for the year                                      |  |       | 14.5 |      |  |      | 25.9 |  |  |  | 23.2 | 
|Distributable profit for the year                                      |  |       | 14.5 |      |  |      | 25.9 |  |  |  | 23.2 | 
|Share of earnings retained by companies
of the Royal Dutch/Shell Group |  |       | 11.4 |      |  |      | 4.8  |  |  |  | 10.6 | 
|                                                                       |  |       |      |      |  |      |      |  |  |  |      | 
|Earnings for the year
attributable to shareholders                     |  |       | 25.9 |      |  |      | 30.7 |  |  |  | 33.8 | 



---

|  |  | Of the earnings per share amounts shown above,
which are disclosed in accordance with
Financial Reporting Standard No. 14, those
relating to earnings for the year attributable
to shareholders are, in the opinion of
the Directors, the most meaningful since they
reflect the full entitlement of the Company in
the income of Group companies. The earnings per
share calculation includes shares held to back
share options (refer to Note 22 of the Group
Financial Statements). There is no difference
between basic and diluted earnings per share.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|a |  | On weighted average 9,708,889,499 shares in
issue during the year 2002. (2001: on
9,832,071,191 and 2000: on 9,943,509,726 shares
in issue.)                                                                                                                                                                                                                                                                                                                                                                                                               

|                                       |                                                                    |                          |   |      |  |      |          |           |         |        |          |          |         | 
|-------------------------------------- | ------------------------------------------------------------------ | ------------------------ | - | ---- |  | ---- | -------- | --------- | ------- | ------ | -------- | -------- | ------- | 
|                                       |                                                                    |                          |   |      |  |      |          | £ million
|                                       |                                                                    |                          |   |      |  |      |          |          
|                                       |                                                                    |                          |   |      |  |      |          | Dec 31    |         | Dec 31
|Balance Sheet                          |                                                                    | Note                     |   | 2002 |  | 2001
|                                       |                                                                    |                          |   |      |  |     
|Fixed assets                           |                                                                    |                          |   |      |  |      |          |           |         |        |          |         
|Investments                            |                                                                    |                          |   |      |  |      |          |           |         |        |          |         
|                                       | Shares (unlisted) in companies
of the Royal Dutch/Shell Group      |                          |   | 5    |  |      |          | 15,632.3  |         |        |          | 16,032.2 |        
|Current assets                         |                                                                    |                          |   |      |  |      |          |           |         |        |          |         
|Debtors                                |                                                                    |                          |   |      |  |      |          |           |         |        |          |         
|                                       | Dividends receivable from companies
of the Royal Dutch/Shell Group |                          |   |      |  |      |          | 1,263.7   |         |        |          | 1,699.3  |        
|                                       | Other debtors                                                      |                          |   |      |  |      |          | 0.1       |         |        |          | 0.4      |        
|                                       |                                                                    |                          |   |      |  |      |          |           |         |        |          |          |        
|                                       |                                                                    |                          |   |      |  |      | 1,263.8  |           |         |        | 1,699.7  |         
|Cash at bank                           |                                                                    |                          |   |      |  |      |          |           |         |        |          |         
|                                       | Short-term deposits                                                |                          |   |      |  |      |          | 89.9      |         |        |          | 67.5     |        
|                                       | Cash                                                               |                          |   |      |  |      |          | 0.4       |         |        |          | 0.6      |        
|                                       |                                                                    |                          |   |      |  |      |          |           |         |        |          |          |        
|                                       |                                                                    |                          |   |      |  |      | 1,354.1  |           |         |        | 1,767.8  |         
|                                       |                                                                    |                          |   |      |  |      |          |           |         |        |          |          |        
|Creditors: amounts due within one year |                                                                    |                          |   |      |  |      |          |           |         |        |          |         
|                                       | Amounts due to companies
of the Royal Dutch/Shell Group            |                          |   |      |  |      |          | 1.1       |         |        |          | 1.0      |        
|                                       | Corporation tax                                                    |                          |   |      |  |      |          | 0.2       |         |        |          | 0.4      |        
|                                       | Unclaimed dividends                                                |                          |   |      |  |      |          | 9.5       |         |        |          | 9.1      |        
|                                       | Other creditors and accruals                                       |                          |   |      |  |      |          | 2.3       |         |        |          | 2.3      |        
|                                       | Preference dividends accrued                                       |                          |   |      |  |      |          | 0.3       |         |        |          | 0.3      |        
|                                       | Ordinary dividend proposed                                         |                          |   |      |  |      |          | 899.1     |         |        |          | 872.5    |        
|                                       |                                                                    |                          |   |      |  |      |          |           |         |        |          |          |        
|                                       |                                                                    |                          |   |      |  |      | 912.5    |           |         |        | 885.6    |         
|                                       |                                                                    |                          |   |      |  |      |          |           |         |        |          |          |        
|Net current assets                     |                                                                    |                          |   |      |  |      | 441.6    |           |         |        | 882.2    |         
|                                       |                                                                    |                          |   |      |  |      |          |           |         |        |          |          |        
|Total assets less current liabilities  |                                                                    |                          |   |      |  |      | 16,073.9 |           |         |        | 16,914.4 |         
|                                       |                                                                    |                          |   |      |  |      |          |           |         |        |          |          |        
|Capital and reserves                   |                                                                    |                          |   |      |  |      |          |           |         |        |          |         
|Equity interests                       |                                                                    |                          |   |      |  |      |          |           |         |        |          |         
|Called-up share capital                |                                                                    |                          | 6 |      |  |      |          |           |         |        |          |         
|                                       |                                                                    | Ordinary shares          |   |      |  |      |          |           | 2,416.9 |        |          |          | 2,437.2 | 
|                                       | Capital redemption reserve                                         |                          |   | 7    |  |      |          | 69.0      |         |        |          | 48.7     |        
|                                       | Revaluation reserve                                                |                          |   | 5    |  |      |          | 13,132.6  |         |        |          | 13,532.5 |        
|                                       | Profit and Loss Account                                            |                          |   |      |  |      |          | 443.4     |         |        |          | 884.0    |        
|                                       |                                                                    |                          |   |      |  |      |          |           |         |        |          |          |        
|                                       |                                                                    |                          |   |      |  |      | 16,061.9 |           |         |        | 16,902.4 |         
|                                       |                                                                    |                          |   |      |  |      |          |           |         |        |          |          |        
|Non-equity interests                   |                                                                    |                          |   |      |  |      |          |           |         |        |          |         
|Called-up share capital                |                                                                    |                          | 6 |      |  |      |          |           |         |        |          |         
|                                       |                                                                    | First Preference shares  |   |      |  |      |          |           | 2.0     |        |          |          | 2.0     | 
|                                       |                                                                    | Second Preference shares |   |      |  |      |          |           | 10.0    |        |          |          | 10.0    | 
|                                       |                                                                    |                          |   |      |  |      |          |           |         |        |          |          |        
|                                       |                                                                    |                          |   |      |  |      | 12.0     |           |         |        | 12.0     |         
|                                       |                                                                    |                          |   |      |  |      |          |           |         |        |          |          |        
|Shareholders funds                    |                                                                    |                          | 8 |      |  |      | 16,073.9 |           |         |        | 16,914.4 |         
|                                       |                                                                    |                          |   |      |  |      |          |           |         |        |          |          |        

Sir Philip Watts,Chairman and Managing Director
March 6, 2003

S2   The Shell Transport and Trading Company, Public Limited Company



---



##### Table of Contents



|                                                                                                       |  |           |   |      |  |      |         |      |  |  |         |  |  |  |         | 
|------------------------------------------------------------------------------------------------------ |  | --------- | - | ---- |  | ---- | ------- | ---- |  |  | ------- |  |  |  | ------- | 
|Statement of Total Recognised Gains and Losses                                                         |  | £ million
|                                                                                                       |  |          
|                                                                                                       |  | Note      |   | 2002 |  | 2001 |         | 2000
|                                                                                                       |  |           |   |      |  |      |         |     
|Distributable profit for the year                                                                      |  |           |   |      |  |      | 1,404.0 |      |  |  | 2,547.3 |  |  |  | 2,308.3 | 
|Unrealised surplus/(deficit)
on revaluation of investments
in companies of the
Royal Dutch/Shell Group |  |           | 5 |      |  |      | (399.9  | )    |  |  | 402.7   |  |  |  | 1,476.2 | 
|                                                                                                       |  |           |   |      |  |      |         |      |  |  |         |  |  |  |         | 
|Total recognised gains and
losses relating to the year                                                 |  |           |   |      |  |      | 1,004.1 |      |  |  | 2,950.0 |  |  |  | 3,784.5 | 
|                                                                                                       |  |           |   |      |  |      |         |      |  |  |         |  |  |  |         | 

|                                                                                   |  |           |          |      |  |      |          |   |  |  |          |  
|---------------------------------------------------------------------------------- |  | --------- | -------- | ---- |  | ---- | -------- | - |  |  | -------- | -
|Statement of Cash Flows                                                            |  | £ million
|                                                                                   |  |          
|                                                                                   |  | 2002      |          | 2001 |  | 2000
|Returns on investments and
servicing of finance                                    |  |           |          |      |  |      |          |   |  |  |          |  
|Dividends received from companies
of the Royal Dutch/Shell Group                   |  |           | 1,838.8  |      |  |      | 2,586.9  |   |  |  | 1,412.0  |  
|Interest received                                                                  |  |           | 5.6      |      |  |      | 5.5      |   |  |  | 4.3      |  
|Preference dividends paid                                                          |  |           | (0.8     | )    |  |      | (0.8     | ) |  |  | (0.8     | )
|Other                                                                              |  |           | (3.7     | )    |  |      | (2.6     | ) |  |  | (2.4     | )
|                                                                                   |  |           |          |      |  |      |          |   |  |  |          |  
|Net cash inflow from returns on
investments and servicing of finance               |  |           | 1,839.9  |      |  |      | 2,589.0  |   |  |  | 1,413.1  |  
|                                                                                   |  |           |          |      |  |      |          |   |  |  |          |  
|Taxation                                                                           |  |           |          |      |  |      |          |   |  |  |          |  
|Tax paid                                                                           |  |           | (0.6     | )    |  |      | (0.5     | ) |  |  | (0.3     | )
|Equity dividends paid                                                              |  |           |          |      |  |      |          |   |  |  |          |  
|Ordinary shares                                                                    |  |           | (1,447.6 | )    |  |      | (1,452.3 | ) |  |  | (1,412.0 | )
|Management of liquid resources
(short-term deposits)                               |  |           |          |      |  |      |          |   |  |  |          |  
|Net cash (outflow)/inflow from
management of liquid resources                      |  |           | (22.4    | )    |  |      | (38.0    | ) |  |  | (0.5     | )
|Financing                                                                          |  |           |          |      |  |      |          |   |  |  |          |  
|Repurchase of share capital,
including expenses                                    |  |           | (369.6   | )    |  |      | (1,099.0 | ) |  |  |         |  
|Net increase/(decrease) in amounts due to
companies of the Royal Dutch/Shell Group |  |           | 0.1      |      |  |      | 0.5      |   |  |  | 0.1      |  
|                                                                                   |  |           |          |      |  |      |          |   |  |  |          |  
|Increase/(decrease) in cash                                                        |  |           | (0.2     | )    |  |      | (0.3     | ) |  |  | 0.4      |  
|Cash at January 1                                                                  |  |           | 0.6      |      |  |      | 0.9      |   |  |  | 0.5      |  
|                                                                                   |  |           |          |      |  |      |          |   |  |  |          |  
|Cash at December 31                                                                |  |           | 0.4      |      |  |      | 0.6      |   |  |  | 0.9      |  
|                                                                                   |  |           |          |      |  |      |          |   |  |  |          |  

Net debts, being amounts due to the companies of the Royal Dutch/Shell Group
less cash, increased during 2002 from £0.4 million to £0.7 million (2001: net
debts increased from £0.4 million net funds to £0.4 million net debts).

The Company adopts a policy of minimising cash holdings whilst ensuring that
operating costs, the financing of dividend payments and funding of the
Companys share buyback programme, are met. The Companys debtors and creditors
are short-term and are all denominated in sterling.

At December 31, 2002 the Company had a £89.9 million (2001: £67.5 million) on
short-term deposit with third-party banks. The fixed interest rate earned on
these sterling deposits at year-end was 4.4% (2001: 4.5%). The carrying amount
and fair value of these deposits are the same.

The ShellTransport and Trading Company, Public Limited Company   S3



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##### Table of Contents



Notes to the Financial Statements

1 Accounting policies and convention

The accounting policies of The Shell Transport and Trading Company, p.l.c.
(Shell Transport) are explained in the relevant notes.

The Financial Statements on pages S2 to S8 herein have been prepared in
accordance with the United Kingdom Companies Act 1985 and with applicable
United Kingdom accounting standards. They have been prepared under the
historical cost convention modified by the revaluation of the investments in
companies of the Royal Dutch/Shell Group (see Note 5). The disclosures
described in Note 3 have been derived from the Royal Dutch/Shell Group
Financial Statements.

2 The Company

Shell Transport, one of the Parent Companies of the Royal Dutch/Shell Group of
Companies, is a holding company which, in conjunction with Royal Dutch
Petroleum Company (Royal Dutch), owns, directly or indirectly, investments in
the numerous companies referred to collectively as the Group. Shell Transport
has no investments in associated undertakings other than in companies of the
Group.

Arrangements between Royal Dutch and Shell Transport provide, inter alia, that
notwithstanding variations in shareholdings, Royal Dutch and Shell Transport
shall share in the aggregate net assets and in the aggregate dividends and
interest received from Group companies in the proportion of 60:40. It is
further arranged that the burden of all taxes in the nature of or corresponding
to an income tax leviable in respect of such dividends and interest shall fall
in the same proportion.

The 60:40 arrangements referred to above have been supplemented by further
arrangements, beginning with Group dividends payable to the Parent Companies in
respect of 1977, whereby each Parent Company is to bring into account towards
its share in the 60:40 division of dividends from Group companies tax credits
and other tax benefits which are related to the liability to tax of a Group
company and which arise to the Parent Company or which would arise to the
holders of its Ordinary shares if there were to be an immediate full onward
distribution to them of Group dividends (for which purpose all such
shareholders are assumed to be individuals resident and subject to tax in the
country of residence of the Parent Company in question).

3 Share in the income and assets of Group companies

Shell Transport records income from shares in Group companies, in the form of
dividends, in its profit and loss account. The Companys investments in Group
companies are stated at the Directors valuation at an amount equivalent to
Shell Transports 40% interest in the Group net assets as disclosed in the
Group Financial Statements on pages G2 to G33 together with 40% of the carrying
amount of Parent Companies shares held by Group companies. The difference
between the cost and the amount at which the investments are stated in the
Balance Sheet has been taken to Revaluation reserve.

Shell Transports share in certain items relating to the two Group Holding
Companies and Shell Petroleum Inc., described in Note 5, is set out below.
These companies own directly or indirectly the investments, which, with them,
comprise the Group. The following supplementary information has therefore been
provided in respect of the Group Holding Companies and Shell Petroleum Inc. in
the aggregate and is derived from the Group Financial Statements on pages G2 to
G33.

S4   The ShellTransport and Trading Company, Public Limited Company



---



##### Table of Contents



|                                                 |  |           |          |      |  |      |          |  |  |  |          | 
|------------------------------------------------ |  | --------- | -------- | ---- |  | ---- | -------- |  |  |  | -------- | 
|                                                 |  | £ million
|                                                 |  |          
|                                                 |  | 2002      |          | 2001 |  | 2000
|                                                 |  |           |          |      |  |     
|Sales proceeds                                   |  |           | 62,744.5 |      |  |      | 49,248.7 |  |  |  | 50,589.5 | 
|Sales taxes, excise duties
and similar levies    |  |           | 14,958.4 |      |  |      | 11,687.1 |  |  |  | 11,191.1 | 
|                                                 |  |           |          |      |  |      |          |  |  |  |          | 
|Net proceeds                                     |  |           | 47,786.1 |      |  |      | 37,561.6 |  |  |  | 39,398.4 | 
|                                                 |  |           |          |      |  |      |          |  |  |  |          | 
|Operating profit after net currency
gains/losses |  |           | 4,740.5  |      |  |      | 5,548.2  |  |  |  | 6,441.8  | 
|Interest and other income                        |  |           | 201.9    |      |  |      | 294.2    |  |  |  | 257.3    | 
|Interest expense                                 |  |           | 363.3    |      |  |      | 314.7    |  |  |  | 349.7    | 
|                                                 |  |           |          |      |  |      |          |  |  |  |          | 
|Income before taxation                           |  |           | 4,579.1  |      |  |      | 5,527.7  |  |  |  | 6,349.4  | 
|                                                 |  |           |          |      |  |      |          |  |  |  |          | 
|Taxation                                         |  |           | 2,028.5  |      |  |      | 2,415.2  |  |  |  | 2,977.9  | 
|Minority interests                               |  |           | 42.1     |      |  |      | 97.8     |  |  |  | 11.6     | 
|                                                 |  |           |          |      |  |      |          |  |  |  |          | 
|Net income for the year                          |  |           | 2,508.5  |      |  |      | 3,014.7  |  |  |  | 3,359.9  | 
|                                                 |  |           |          |      |  |      |          |  |  |  |          | 
|Fixed assets including
Parent Companies shares  |  |           | 26,768.7 |      |  |      | 20,774.3 |  |  |  | 19,013.3 | 
|Current assets                                   |  |           | 11,898.1 |      |  |      | 10,537.0 |  |  |  | 14,122.8 | 
|Current liabilities                              |  |           | 13,706.0 |      |  |      | 9,232.9  |  |  |  | 11,427.7 | 
|Long-term liabilities                            |  |           | 3,216.7  |      |  |      | 1,751.0  |  |  |  | 2,160.7  | 
|Provisions                                       |  |           | 5,226.0  |      |  |      | 3,335.9  |  |  |  | 3,147.4  | 
|                                                 |  |           |          |      |  |      |          |  |  |  |          | 

This supplementary information has been calculated in conformity with the
accounting policies on pages G5 to G8 of the Group Financial Statements. These
policies differ in certain respects from accounting principles generally
accepted in the United Kingdom. It is estimated that if this supplementary
information was presented in conformity with accounting principles generally
accepted in the United Kingdom, the impact on net assets at December 31, 2002
would not be significant, although long-term liabilities would increase by
approximately £0.8 billion (2001: £1.1 billion) and provisions would decrease
by approximately £0.8 billion (2001: £0.1 billion). The estimated impact on net
income for the year is not significant. Shell Transports distributions from
Group companies were as follows:

|
|
|
|
|
|
|
|
|

4 Tax on profit on ordinary activities

|                                                                                                       |  |           |     |      |  |      |     |  |  |  |     | 
|------------------------------------------------------------------------------------------------------ |  | --------- | --- | ---- |  | ---- | --- |  |  |  | --- | 
|                                                                                                       |  | £ million
|                                                                                                       |  |          
|                                                                                                       |  | 2002      |     | 2001 |  | 2000
|                                                                                                       |  |           |     |      |  |     
|Corporation tax at 30% (2001 and
2000: 30%) in respect of interest
income less administrative expenses |  |           | 0.4 |      |  |      | 0.7 |  |  |  | 0.3 | 
|                                                                                                       |  |           |     |      |  |      |     |  |  |  |     | 

No taxation liability arises in respect of income from shares in companies of
the Group as this income consists of a distribution, which is not subject to
taxation, from a UK resident company. Consequently, the effective tax rate is
substantially lower than the UK Corporation tax rate of 30%.

Shell Transports share of taxation borne by Group and associated companies is given in Note 3.

5 Investments in Group companies

Shell Transport has 40% equity shareholdings in The Shell Petroleum Company
Limited, which is registered in England and Wales, (consisting of the whole of
its 102,342,930 issued B shares of £1 each) and in Shell Petroleum N.V.,
which is incorporated in the Netherlands (consisting of the whole of its 44
issued B shares of N.fl.5,000,000 each). The remaining 60% equity
shareholdings in these two companies (consisting of 153,514,395 A shares of
£1 each of The Shell Petroleum Company Limited and 66 A shares of
N.fl.5,000,000 each of Shell Petroleum N.V.) are held by Royal Dutch.

The Shell Transport and Trading Company, Public Limited Company   S5



---



##### Table of Contents



Shell Transport also holds 1,600 Class B shares of US $1 each in Shell
Petroleum Inc., which is incorporated in the State of Delaware, USA. These
shares, together with the 2,400 Class A shares of US $1 each in that company
held by Royal Dutch, carry voting control of Shell Petroleum Inc. but are
restricted in regard to dividends to 12% of their par value per annum. Shell
Petroleum N.V. holds the remaining 1,000 shares of US $1 each in Shell
Petroleum Inc., which are unrestricted in regard to dividends.

The Shell Petroleum Company Limited, Shell Petroleum N.V. and Shell Petroleum
Inc. own, directly or indirectly, the investments representing the total Group
interest in the other companies which, with them, comprise the Group.

The Directors valuation of Shell Transports investments in Group companies
comprises the following:

|                                                                           |                                                  |  |           |          |      |  |          |          |  
|-------------------------------------------------------------------------- | ------------------------------------------------ |  | --------- | -------- | ---- |  | -------- | -------- | -
|                                                                           |                                                  |  | £ million
|                                                                           |                                                  |  |          
|                                                                           |                                                  |  | 2002      |          | 2001
|                                                                           |                                                  |  |           |          |     
|Cost of Shell Transports investments in Group
companies                   |                                                  |  | 178.4     |          |      |  | 178.4    |         
|Shell Transports share of:                                                |                                                  |  |           |          |      |  |          |         
|                                                                           | Earnings retained by Group companies             |  |           | 16,707.7 |      |  |          | 15,602.3 |  
|                                                                           | Parent Companies shares held by Group companies |  |           | (695.6   | )    |  |          | (538.7   | )
|                                                                           | Other
comprehensive incomea                      |  |           | (1,580.2 | )    |  |          | (1,770.4 | )
|Currency translation differences                                           |                                                  |  | 326.4     |          |      |  | 2,021.9  |         
|                                                                           |                                                  |  |           |          |      |  |          |         
|                                                                           |                                                  |  | 14,936.7  |          |      |  | 15,493.5 |         
|40% of carrying amount of Parent Companies
shares held by Group companies |                                                  |  | 695.6     |          |      |  | 538.7    |         
|                                                                           |                                                  |  |           |          |      |  |          |         
|                                                                           |                                                  |  | 15,632.3  |          |      |  | 16,032.2 |         
|                                                                           |                                                  |  |           |          |      |  |          |         



---

| |  | a Other comprehensive income comprises
principally cumulative currency translation
differences arising within the Group Financial
Statements.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------

The movements in the Revaluation reserve are represented by:

|                  |                                                                 |  |           |          |      |  |          |        |  
|----------------- | --------------------------------------------------------------- |  | --------- | -------- | ---- |  | -------- | ------ | -
|                  |                                                                 |  | £ million
|                  |                                                                 |  |          
|                  |                                                                 |  | 2002      |          | 2001
|                  |                                                                 |  |           |          |     
|As at January 1   |                                                                 |  | 13,532.5  |          |      |  | 13,129.8 |       
|                  | Share of earnings retained by Group
companies out of net income |  |           | 1,105.3  |      |  |          | 469.0  |  
|                  | Share of other comprehensive income for the year                |  |           | 190.2    |      |  |          | (544.3 | )
|                  | Currency translation differences                                |  |           | (1,695.4 | )    |  |          | 478.0  |  
|                  |                                                                 |  |           |          |      |  |          |       
|                  |                                                                 |  | (399.9    | )        |      |  | 402.7    |       
|                  |                                                                 |  |           |          |      |  |          |       
|As at December 31 |                                                                 |  | 13,132.6  |          |      |  | 13,532.5 |       
|                  |                                                                 |  |           |          |      |  |          |       

The earnings retained by Group companies have been, or will be, substantially
reinvested by the companies concerned, and any taxation unprovided on possible
future distributions out of any uninvested retained earnings will not be
material.

The Company will continue to hold its investments in Group companies. However,
as the investments are stated in the Balance Sheet on a valuation basis, it is
necessary to report that, if the investments were to be disposed of for the
amount stated, a taxation liability of approximately £1.1 billion would arise
(2001: £1.4 billion).

S6   The
Shell Transport and Trading Company, Public Limited Company



---



##### Table of Contents



6 Share capital and dividends

At December 31, 2001 and December 31, 2002 the authorised share capital of the
Company was £2,500,000,000 divided into 9,948,000,000 Ordinary shares of 25
pence each, 3,000,000 First Preference shares of £1 each and 10,000,000 Second
Preference shares of £1 each.

The allotted, called up and fully paid share capital at December 31, 2002 was
as follows:

|                  |                                     |  |                  |               |   |  |            |               | 
|----------------- | ----------------------------------- |  | ---------------- | ------------- | - |  | ---------- | ------------- | 
|                  |                                     |  | Number of shares |               | £
|                  |                                     |  |                  |               |  
|Equity shares     |                                     |  |                  |               |   |  |            |              
|                  | Ordinary shares of 25p each         |  |                  |               |   |  |            |               | 
|                  | As at January 1                     |  |                  | 9,748,625,000 |   |  |            | 2,437,156,250 | 
|                  | Shares repurchased for cancellation |  |                  | 81,125,000    |   |  |            | 20,281,250    | 
|                  |                                     |  |                  |               |   |  |            |              
|                  | As at December 31                   |  |                  | 9,667,500,000 |   |  |            | 2,416,875,000 | 
|                  |                                     |  |                  |               |   |  |            |              
|Non-equity shares |                                     |  |                  |               |   |  |            |              
|                  | First Preference shares of £1 each  |  |                  | 2,000,000     |   |  |            | 2,000,000     | 
|                  | Second Preference shares of £1 each |  |                  | 10,000,000    |   |  |            | 10,000,000    | 
|                  |                                     |  |                  |               |   |  |            |              
|                  |                                     |  | 12,000,000       |               |   |  | 12,000,000 |              
|                  |                                     |  |                  |               |   |  |            |              

The First and Second Preference shares (the Preference shares) confer on the
holders the right to a fixed cumulative dividend (5.5% and 7% on First and
Second Preference shares respectively) and rank in priority to Ordinary shares.
On a winding up or repayment the Preference shares also rank in priority to the
Ordinary shares for the nominal value of £1 per share (plus a premium, if any,
equal to the excess over £1 of the daily average price for the respective
shares quoted in the London Stock Exchange Daily Official List for a six months
period preceding the repayment or winding up) but do not have any further
rights of participation in the profits or assets of the Company. The Preference
shares do not have voting rights unless their dividend is in arrears or the
proposal concerns a reduction of capital, winding up, sanctioning the sale of
undertaking, an alteration of the Articles of Association or otherwise directly
affects their class rights.

The Preference shares are irredeemable and form part of the permanent capital
of the Company. The number in issue has remained unchanged since 1922. The fair
value of the Preference shares based on market valuations at December 31, 2002
was 97.6 pence per share (2001: 92.17 pence per share) for the First Preference
shares and 135.0 pence per share (2001: 128.0 pence per share) for the Second
Preference shares.

Ordinary dividends paid and proposed are as follows:

|                                                                                  |  |           |         |      |  |      |         |   |  |  |         | 
|--------------------------------------------------------------------------------- |  | --------- | ------- | ---- |  | ---- | ------- | - |  |  | ------- | 
|                                                                                  |  | £ million
|                                                                                  |  |          
|                                                                                  |  | 2002      |         | 2001 |  | 2000
|                                                                                  |  |           |         |      |  |     
|Interim of 5.95p in 2002,
5.85p in 2001 and 5.7p in 2000                          |  |           | 578.0   |      |  |      | 574.4   |   |  |  | 566.8   | 
|Proposed final of 9.30p in 2002, final
of 8.95p in 2001 and final of 8.9p in 2000 |  |           | 899.1   |      |  |      | 872.5   |   |  |  | 885.0   | 
|Reduction due to share buyback
and unclaimed dividends                            |  |           | (2.9    | )    |  |      | (7.1    | ) |  |  |        | 
|                                                                                  |  |           |         |      |  |      |         |   |  |  |         | 
|                                                                                  |  |           | 1,474.2 |      |  |      | 1,439.8 |   |  |  | 1,451.8 | 
|                                                                                  |  |           |         |      |  |      |         |   |  |  |         | 

The charges for 2002 ordinary dividends of £1,477.1 million were reduced
by the release of £2.5 million from the provisions for the final dividend
at December 31, 2001 and interim dividend at June 30, 2002. This was due to the
subsequent cancellation of shares resulting from the Companys share buyback
programme during the period.

The Shell Transport and Trading Company, Public Limited Company   S7



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##### Table of Contents



7 Capital redemption reserve

|                                                                    |  |           |      |      |  |  |      | 
|------------------------------------------------------------------- |  | --------- | ---- | ---- |  |  | ---- | 
|                                                                    |  | £ million
|                                                                    |  |          
|                                                                    |  | 2002      |      | 2001
|                                                                    |  |           |      |     
|As at January 1                                                     |  |           | 48.7 |      |  |  |     | 
|Movement relating to shares bought by
Shell Transport and cancelled |  |           | 20.3 |      |  |  | 48.7 | 
|                                                                    |  |           |      |      |  |  |      | 
|As at December 31                                                   |  |           | 69.0 |      |  |  | 48.7 | 
|                                                                    |  |           |      |      |  |  |      | 

Share capital was cancelled on all shares repurchased under the Companys share
buyback programme. As required by the Companies Act 1985, the equivalent of the
nominal value of the shares cancelled is transferred to a capital redemption
reserve.

8 Reconciliation of movements in Shareholders funds

|                                                                                                      |  |           |          |      |  |  |          |  
|----------------------------------------------------------------------------------------------------- |  | --------- | -------- | ---- |  |  | -------- | -
|                                                                                                      |  | £ million
|                                                                                                      |  |          
|                                                                                                      |  | 2002      |          | 2001
|                                                                                                      |  |           |          |     
|Distributable profit for the year                                                                     |  |           | 1,404.0  |      |  |  | 2,547.3  |  
|Dividends                                                                                             |  |           | (1,475.0 | )    |  |  | (1,440.6 | )
|Repurchase of share capital, including expenses                                                       |  |           | (369.6   | )    |  |  | (1,099.0 | )
|Unrealised surplus on revaluation of investments in
companies of the Royal Dutch/Shell Group (Note 5) |  |           | (399.9   | )    |  |  | 402.7    |  
|                                                                                                      |  |           |          |      |  |  |          |  
|Net addition to Shareholders funds                                                                   |  |           | (840.5   | )    |  |  | 410.4    |  
|Shareholders funds as at January 1                                                                   |  |           | 16,914.4 |      |  |  | 16,504.0 |  
|                                                                                                      |  |           |          |      |  |  |          |  
|Shareholders funds as at December 31                                                                 |  |           | 16,073.9 |      |  |  | 16,914.4 |  
|                                                                                                      |  |           |          |      |  |  |          |  

9 Auditors remuneration

Audit fees of Shell Transport amounted to £31,000 in 2002, £25,500 in 2001 and
£16,015 in 2000. Fees payable to PricewaterhouseCoopers for non-audit services
in the UK amounted to £23,000 in 2002, £30,000 in 2001 and £nil in 2000. The
non-audit fees relate to advice in respect of a review of the financial
reporting impact of developments in accounting policies and business activities
of the Royal Dutch/Shell Group on the financial statements of Shell Transport,
including proposed developments in International Financial Reporting Standards.
A portion of the non-audit fees relates to the prior year and is disclosed
accordingly.

10 Aggregate Directors emoluments

|                              |  |      |           |      |  |      |           |   |  |  |           | 
|----------------------------- |  | ---- | --------- | ---- |  | ---- | --------- | - |  |  | --------- | 
|                              |  | £   
|                              |  |     
|                              |  | 2002 |           | 2001 |  | 2000
|                              |  |      |           |      |  |     
|Salaries, fees and benefits   |  |      | 1,716,378 |      |  |      | 1,979,253 |   |  |  | 1,974,161 | 
|Performance-related element   |  |      | 1,663,325 |      |  |      | 1,157,218 | a |  |  | 760,050   | 
|                              |  |      |           |      |  |      |           |   |  |  |           | 
|                              |  |      | 3,379,703 |      |  |      | 3,136,471 |   |  |  | 2,734,211 | 
|                              |  |      |           |      |  |      |           |   |  |  |           | 
|Excess retirement benefitsb |  |      | 23,495    |      |  |      | 41,800    |   |  |  | 34,056    | 
|Realised share option gains   |  |      | 16,476    |      |  |      | 1,653,429 |   |  |  | 1,376,544 | 
|                              |  |      |           |      |  |      |           |   |  |  |           | 



---

|                                                                                                                                                                |  |                                                                                                                                                                                                                                                                   
|--------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Of the emoluments disclosed, £458,162 in 2002, £326,783 in 2001 and £329,666 in
2000, were borne by Shell Transport and charged in the Profit and Loss Account.
|                                                                                                                                                               
|a                                                                                                                                                               |  | Prior year numbers have been restated to include the Deferred Bonus Plan entitlement
awarded during 2002 in respect of 2001.                                                                                                                                      
|                                                                                                                                                               
|b                                                                                                                                                               |  | Excess retirement benefits are the amount of unfunded retirement benefits paid to or
receivable by past Directors which exceed those to which they were entitled on the date
on which the benefits first became payable or March 31, 1997, whichever is the later.

S8   The
Shell Transport and Trading Company, Public Limited Company



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##### Table of Contents



Remuneration Report

The Board presents its report on Directors remuneration for the year ended
December 31, 2002.

This report deals with the remuneration policy as it applies and will apply to
Group Managing Directors, including those who are also Managing Directors of
Shell Transport, and to the non-executive Directors of Shell Transport. The
remuneration policy is subject to regular review. This report also contains the
disclosure of the individual remuneration of the Directors of Shell Transport.

Remuneration and Succession Review Committee

The Remuneration and Succession Review Committee (REMCO) is a joint committee
of the Board of Shell Transport and the Supervisory Board of Royal Dutch (see
pages 76 and 77) and has responsibility for making recommendations on all forms
of remuneration with respect to Group Managing Directors.

During the year under review, the REMCO members appointed by the Board of Shell
Transport were Nina Henderson, Sir Peter Job and Sir Mark Moody-Stuart, and the
members appointed by the Supervisory Board of Royal Dutch were Jonkheer Aarnout
Loudon, Professor Joachim Milberg, Henny de Ruiter (appointed July 1, 2002) and
Lodewijk van Wachem (retired June 30, 2002). The Chairman of the Committee is
currently Jonkheer Aarnout Loudon.

The remuneration of the non-executive Directors of Shell Transport is, in
accordance with the Articles of Association, the responsibility of the Board of
Shell Transport as a whole and is determined within the limits set by
shareholders.

Remuneration policy

Group Managing Directors Remuneration

Philosophy

The objective of the remuneration philosophy is to attract and retain high
calibre individuals and motivate them towards the achievement of exceptional
performance that enhances the value of the Group. The remuneration structures
for Group Managing Directors are therefore designed to support alignment of
Group Managing Directors interests with the goals of the Group and its various
businesses and with shareholders interests.

Competitive framework

Remuneration levels are set by reference to the practice of global companies of
comparable size, complexity and international scope to that of the Group. Among
such companies there is an increasing emphasis on performance-linked variable
short and long-term pay. Consistent with this and the philosophy outlined
above, for on-target performance more than half of a Group Managing Directors
total remuneration will be performance-linked. This proportion is expected to
increase in line with market practice.

REMCO is provided with market data on the basis of which it annually reviews
remuneration levels and the proportions between fixed and variable pay.

Base salary and fees

The purpose of base salary (which is inclusive of Directors fees) is to
provide an element of fixed remuneration set at a competitive level that is
appropriate to the scope and complexity of the role of a Group Managing
Director.

Salary levels are set by reference to market-based salary scales that reflect
the collegiate nature of the Committee of Managing Directors. The scales were
increased by 6% with effect from July 1, 2002. The salary scales are reviewed
annually by REMCO and will be adjusted in line with market practice with effect
from July 1, 2003. Progression of an individual Group Managing Directors
salary to the target position is usually over a three-year period from
appointment.

Annual and deferred bonus

The purpose of the annual bonus plan is to motivate Group Managing Directors to
achieve annual results that further the Groups long-term objectives.

The target level of bonus for the year 2002 was 100% of base salary (2001 was
65% of base salary). The target for 2003 will be 100% of base salary.

Bonus awards are recommended by REMCO based on the extent of achievement of
challenging Group targets that are set as part of the annual Group business
plan. These targets encompass financial, customer, people, sustainable
development and other operational objectives. For 2002, financial targets
related to Total Shareholder Return (TSR) measured annually by the average
weighted share

The Shell Transport and Trading Company, Public Limited Company   S9



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##### Table of Contents



price performance plus dividends of Shell Transport and Royal Dutch relative to
other major integrated oil companies and Return on Average Capital Employed
(ROACE). Having regard to the Groups performance against all targets, REMCO
has recommended that the bonus payable to Group Managing Directors in respect
of the year 2002 is 115% of base salary. The same approach will be adopted in
2003.

Since 2001, Group Managing Directors have been able to elect to defer up to
one-third of their annual bonus into shares, in the case of Managing Directors
of the Company, Shell Transport shares. The deferred bonus shares, together
with shares equivalent to the value of dividends payable on the deferred bonus
shares, are released three years after deferral. Provided the participants
remain in Group employment for three years following the deferral, or reach
normal retirement within the three-year period, they will also receive one
additional share for every two shares accumulated.

The purposes of the deferred bonus plan are to reward performance over a single
financial year, to align Group Managing Directors interests with shareholders
interests during the deferment period and to encourage share ownership in the
Company. There is accordingly no further performance test beyond that governing
performance in the relevant bonus year.

Neither annual nor deferred bonuses are pensionable.

Long-term incentives

The objective of long-term incentive arrangements is to ensure that Group
Managing Directors share the interests of shareholders by being rewarded for
share price growth, the creation of shareholder value and the achievement of
superior relative shareholder returns. The policy in relation to long-term
incentives applies to each of the Group Managing Directors.

Long-term incentives are currently awarded in the form of stock options.
Options are granted once a year under the Group Stock Option plan which applies
to Group Managing Directors and senior staff.

Options granted before 2003 to Group Managing Directors may vest three years
after grant and remain exercisable until ten years after grant. Of the options
granted, 50% are subject to performance conditions and the proportion of such
50% which will either vest and become unconditional or lapse, will be
determined for Group Managing Directors at the discretion of REMCO using the
criteria below.

REMCO will only exercise its discretion in favour of vesting to the extent that
it is satisfied that the performance of the Group over the three-year vesting
period reflects the objective for long-term incentives. Accordingly, when
making its decision, REMCO takes into account a combination of TSR over the
three-year vesting period (measured by the average weighted share price
performance plus dividends of Shell Transport and Royal Dutch over the ten-day
period at the beginning and end of the vesting period) relative to a peer group
of other major integrated oil companies and other long-term indicators of Group
performance.

The latest tranche of stock options to vest was granted in March 2000 and the
stock options vested in March 2003. The measurement period for the options was
January 1, 2000 to December 31, 2002. The peer companies were BP,
ChevronTexaco, ExxonMobil and Total. The Royal Dutch/Shell Group of Companies
ranked fourth. REMCO considered other performance indicators including profits
over the three years and ROACE relative to the peer group.

Having considered all of these factors REMCO determined that 50% of the options
granted in March 2000 that were subject to its discretion should vest.

Options granted in 2003, and in subsequent years, will be 100% performance
linked. Performance will be measured over the three financial years prior to
grant. The policy, which will continue in future years, is that the levels of
grant will vary according to the ratings given by REMCO to the Groups
achievements against financial targets and will reflect competitive market
practice. The current financial targets are TSR relative to the other major
integrated oil companies and ROACE. These financial targets have been chosen as
they are consistent with the objective for long-term incentives and represent a
balanced test of the Groups internal operating efficiency and external
performance.

In addition, it is proposed to introduce a new Long-term Incentive Plan (the
Plan). This proposal will be put to shareholders at the 2003 Annual General
Meetings of Shell Transport and Royal Dutch.

S10   The
Shell Transport and Trading Company, Public Limited Company



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##### Table of Contents



Group Managing Directors and other selected senior executives will be eligible
to participate in the Plan. Group Managing Directors will be selected for
participation on the recommendation of REMCO. Participants will be made a
conditional award of shares in either Shell Transport or Royal Dutch. The
receipt of shares comprised in the award will be conditional on the participant
remaining in employment (subject to certain exceptions, including normal
retirement) and on the satisfaction of performance targets over the performance
period. The performance period will not be less than three consecutive
financial years. In the case of Group Managing Directors, REMCO will make
recommendations on the number of shares which may be conditionally awarded in
any year. Awards in any one year can range from zero to two times base salary,
but the maximum number of shares will only be received for exceptional
performance as described below.

If the adoption of the Plan is
approved, the performance targets will be linked
to TSR (the average weighted share price performance plus dividends of Shell
Transport and Royal Dutch) relative to two separate groups of comparator
companies, over a performance period of three financial years. Two separate
comparator groups have been chosen because REMCO considers that it is
appropriate to test performance both against major home markets and industry
competitors. Relative TSR has been chosen as the performance test that most
closely aligns the interests of Group Managing Directors and senior executives
with those of shareholders.

The first comparator group will consist of the largest twenty companies (by way
of market capitalisation) in the FTSE 100 share index together with the ten
largest companies (also by way of market capitalisation) in the AEX index, in
each case, at the beginning of the relevant performance period. As at January
1, 2003, the first comparator group, in addition to Shell Transport and Royal
Dutch, was FTSE: Anglo American, AstraZeneca, Aviva, Barclays, BG Group, BP,
British American Tobacco, BT Group, Diageo, GlaxoSmithKline, HBOS, HSBC
Holdings, Lloyds TSB Group, National Grid Transco, Rio Tinto, The Royal Bank of
Scotland, Tesco, Unilever PLC and Vodafone Group and AEX: ABN AMRO, AEGON,
Ahold, Akzo Nobel, Heineken, ING Group, KPN, Philips and Unilever N.V. In the
case of Shell Transport and Royal Dutch, and Unilever PLC and Unilever N.V.,
the weighted average TSR of the two companies will be used.

The second comparator group will be the five major integrated oil companies,
which, as at January 1, 2003, were BP, ChevronTexaco, ExxonMobil, the Royal
Dutch/Shell Group of Companies and Total.

Half of each conditional award will be tested against the first comparator
group and half against the second comparator group. If shareholders approve the
adoption of the Plan, the comparator groups described above will be used for
the first performance period which will be from January 1, 2003 to December 31,
2005.

For the first comparator group, 100% of the shares tested against that group
will be received for 75th percentile and above performance and 25% will be

received for median performance with a straight-line calculation between these
two points. No shares will be received for performance below the median. This
method of calculation has been chosen because it is consistent both with
shareholders expectations and market practice.

For the second comparator group, 100% of the shares tested against that group
will be received if the Royal Dutch/Shell Group of Companies is in first place,
75% for second place and 50% for third place. No shares will be received for
fourth or fifth place.

All-employee Share Schemes

Group Managing Directors who are Directors of the Company are, in common with
other UK employees, eligible to participate in the Shell Sharesave Scheme and
the Shell All-employee Share Ownership Plan. However, they are not eligible to
participate in the Global Employee Share Purchase Plan.

Pensions

For Shell Transport Managing Directors pensions the principal sources are the
Shell Contributory Pension Fund (for service in the UK) and the Shell Overseas
Contributory Pension Fund (for previous service overseas). Both Funds are
defined benefit plans to which Managing Directors contribute 4% of relevant
earnings. The latest date on which Managing Directors retire is June 30,
following their 60th birthday, and the maximum pension is two-thirds of their
final remuneration, excluding bonuses. There
are also provisions, as for all members of the above Funds, for a dependant
benefit of 60% of actual or prospective pension, and a lump sum
death-in-service payment of three times annual salary. During 2002 two Managing
Directors accrued retirement benefits under defined benefit plans (2001: three;
2000: three). No Managing Director has accrued benefits under a money purchase
benefit scheme. Salaries/fees payable to Managing Directors, totalling
£1,214,000 in 2002, £1,328,500 in 2001, £1,514,500 in 2000 count for pension
purposes in the Shell Contributory Pension Fund.

The Shell Transport and Trading Company, Public Limited Company   S11



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##### Table of Contents



The payment of employers contributions to the Shell Contributory Pension Fund,
which is open to United Kingdom employees of the member companies, has upon
actuarial advice been suspended since January 1, 1990. Managing Directors
accrued pension benefits during the year are as detailed in the table on page
S14. The transfer values are calculated using the cash equivalent transfer
value method in accordance with Actuarial Guidance Note GN11.

Advisors

In reaching its decisions on Group Managing Directors remuneration, REMCO was
materially assisted by advice from John Hofmeister (Group Human Resources
Director) and Michael Reiff (Group Head of Remuneration and Benefits).

External data are collated by internal sources and used in the preparation of
internal briefing papers that REMCO considers, in common with other factors,
when making its decisions. Accordingly, there is no single external source that
provides material advice or services, nor is there a formal external advisor
appointed by REMCO. At its discretion, REMCO may seek external advice on its
own account and, in the year under review, it received such advice from Towers
Perrin, which also provided companies within the Group with advice on pensions,
compensation, communication and HR management.

Directors Contracts of Service

No Director has or, during the financial year had, a contract of service with
Shell Transport. The Managing Directors of Shell Transport have employment
contracts with one of the Group holding or service companies that provide
entitlement to notice in line with the standard policy applicable to other
senior staff in the United Kingdom  three months. Similarly, such contracts
expire on the latest expected date of retirement which, in the case of the
Managing Directors, is June 30 following their 60th birthday (as at December
2002, Sir Philip Watts was aged 57 and Paul Skinner 58). There are no
predetermined termination compensation arrangements in place for Directors of
Shell Transport and no payments on termination were made to retiring or past
Directors during the year under review.

Sir Philip Watts and Paul Skinners current employment contracts are effective
from July 1, 2002 and January 1, 2000 respectively.

Non-executive Directors Fees

In accordance with the Articles of Association, the remuneration of Directors
of the Company is determined by the Board within a limit set by shareholders.
All Directors are entitled to an annual fee (currently £50,000) with additional
fees for acting as Chairman of the Board or of a Joint Committee. An additional
fee is payable to any Director who undertakes intercontinental travel to attend
a meeting.

The fees for non-executive Directors are reviewed from time to time and were
last adjusted from July 1, 2002 after approval at the 2002 Annual General
Meeting of an increase in the maximum sum available. There are no current
proposals to increase fees in 2003.

Performance graph

The following graph compares, on the basis required by the Directors
Remuneration Report Regulations 2002, the TSR of Shell Transport and that of
the companies comprising the FTSE 100 share index over the five-year period
from 1998 to 2002. The Board regards the FTSE 100 share index as an appropriate
broad market equity index for comparison as it is the leading market index in
Shell Transports home market.

Five-year historical TSR Performance

Growth in the value of a
hypothetical £100 holding over
five years FTSE 100 comparison
based on 30 Trading Day Average
values

(PERFORMANCE GRAPH)

S12   The
Shell Transport and Trading Company, Public Limited Company



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##### Table of Contents



Remuneration of the Directors

|                                              |  |      |           |      |  |      |           |   |  |  |           | 
|--------------------------------------------- |  | ---- | --------- | ---- |  | ---- | --------- | - |  |  | --------- | 
|Emoluments of Directors in office during 2002 |  | £   
|                                              |  |     
|                                              |  | 2002 |           | 2001 |  | 2000
|                                              |  |      |           |      |  |     
|Sir Philip Watts:                             |  |      |           |      |  |      |           |   |  |  |           | 
|Salaries and fees                             |  |      | 745,969   |      |  |      | 607,398   |   |  |  | 496,302   | 
|Car benefita                                  |  |      | 21,922    |      |  |      | 20,089    |   |  |  | 17,323    | 
|Other benefits                                |  |      |          |      |  |      |          |   |  |  |          | 
|Performance-related elementb                  |  |      | 874,000   | c    |  |      | 455,000   | c |  |  | 225,000   | 
|Deferred bonus plan adjustmentd               |  |      | 152,069   |      |  |      | 75,834    |   |  |  |          | 
|                                              |  |      |           |      |  |      |           |   |  |  |           | 
|                                              |  |      | 1,793,960 |      |  |      | 1,158,321 |   |  |  | 738,625   | 
|Realised share option gains                   |  |      | 8,238     |      |  |      | 508,167   |   |  |  | 134,400   | 
|                                              |  |      |           |      |  |      |           |   |  |  |           | 
|                                              |  |      | 1,802,198 |      |  |      | 1,666,488 |   |  |  | 873,025   | 
|                                              |  |      |           |      |  |      |           |   |  |  |           | 
|Paul Skinner:                                 |  |      |           |      |  |      |           |   |  |  |           | 
|Salaries and fees                             |  |      | 553,830   |      |  |      | 504,703   |   |  |  | 458,802   | 
|Car benefita                                  |  |      | 13,181    |      |  |      | 14,924    |   |  |  | 14,965    | 
|Other benefits                                |  |      |          |      |  |      |          |   |  |  | 655       | 
|Performance-related elementb                  |  |      | 632,500   |      |  |      | 338,000   | c |  |  | 213,750   | 
|Deferred bonus plan adjustmentd               |  |      | 4,756     |      |  |      | 56,334    |   |  |  |          | 
|                                              |  |      |           |      |  |      |           |   |  |  |           | 
|                                              |  |      | 1,204,267 |      |  |      | 913,961   |   |  |  | 688,172   | 
|Realised share option gains                   |  |      | 8,238     |      |  |      | 505,902   |   |  |  | 349,704   | 
|                                              |  |      |           |      |  |      |           |   |  |  |           | 
|                                              |  |      | 1,212,505 |      |  |      | 1,419,863 |   |  |  | 1,037,876 | 
|                                              |  |      |           |      |  |      |           |   |  |  |           | 
|Sir Mark Moody-Stuarte:                       |  |      |           |      |  |      |           |   |  |  |           | 
|Salaries and fees                             |  |      |          |      |  |      | 583,401   |   |  |  | 710,427   | 
|Directors fees                               |  |      | 39,375    |      |  |      |          |   |  |  |          | 
|Holding Company fees                          |  |      | 18,314    |      |  |      |          |   |  |  |          | 
|Performance-related elementb                  |  |      |          |      |  |      | 232,050   |   |  |  | 321,300   | 
|                                              |  |      |           |      |  |      |           |   |  |  |           | 
|                                              |  |      | 57,689    |      |  |      | 815,451   |   |  |  | 1,031,727 | 
|Realised share option gains                   |  |      |          |      |  |      | 639,360   |   |  |  | 892,440   | 
|                                              |  |      |           |      |  |      |           |   |  |  |           | 
|                                              |  |      | 57,689    |      |  |      | 1,454,811 |   |  |  | 1,924,167 | 
|                                              |  |      |           |      |  |      |           |   |  |  |           | 
|Teymour Alireza:Directors fees               |  |      | 45,375    |      |  |      | 28,750    |   |  |  | 28,750    | 
|                                              |  |      |           |      |  |      |           |   |  |  |           | 
|Sir Peter Burt:Directors fees                |  |      | 21,795    |      |  |      |          |   |  |  |          | 
|                                              |  |      |           |      |  |      |           |   |  |  |           | 
|Dr Eileen Buttle:Directors fees              |  |      | 39,375    |      |  |      | 31,875    |   |  |  | 30,625    | 
|                                              |  |      |           |      |  |      |           |   |  |  |           | 
|Luis Giusti:Directors fees                   |  |      | 45,375    |      |  |      | 26,875    |   |  |  | 7,500     | 
|                                              |  |      |           |      |  |      |           |   |  |  |           | 
|Nina Henderson:Directors fees                |  |      | 45,375    |      |  |      | 17,516    |   |  |  |          | 
|                                              |  |      |           |      |  |      |           |   |  |  |           | 
|Sir Peter Job:Directors fees                 |  |      | 39,375    |      |  |      | 11,042    |   |  |  |          | 
|                                              |  |      |           |      |  |      |           |   |  |  |           | 
|Sir John Kerr:Directors fees                 |  |      | 21,795    |      |  |      |          |   |  |  |          | 
|                                              |  |      |           |      |  |      |           |   |  |  |           | 
|Professor Robert ONeill:Directors fees      |  |      | 10,910    |      |  |      | 30,000    |   |  |  | 30,000    | 
|                                              |  |      |           |      |  |      |           |   |  |  |           | 
|Lord Oxburgh:Directors fees                  |  |      | 42,800    |      |  |      | 32,475    |   |  |  | 36,850    | 
|                                              |  |      |           |      |  |      |           |   |  |  |           | 
|Sir William Purves:Directors fees            |  |      | 11,612    |      |  |      | 34,333    |   |  |  | 34,333    | 
|                                              |  |      |           |      |  |      |           |   |  |  |           | 



---

|a |  | Car benefit is the Inland Revenue defined cash equivalent of the cost of company
provided vehicles.                                                                                                                                                                                                                                    
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|b |  | The performance-related element is included in the year to which it relates.                                                                                                                                                                                                                                                           
| 
|c |  | Of which one-third was deferred under the Deferred Bonus Plan.                                                                                                                                                                                                                                                                         
| 
|d |  | These amounts are the increases accruing during the year in respect of entitlements
under the Deferred Bonus Plan in respect of additional shares that will be granted
(provided the participant remains in Group employment for three years following
initial deferral or reaches normal retirement age within the three-year period).
| 
|e |  | Sir Mark Moody-Stuart retired as Chairman and Managing Director on June 30,
2001. His remuneration in 2001 included a full service bonus of £198,000.
A bonus under this arrangement is paid on retirement to all UK employees with
qualifying service.                                                                              

The Shell Transport and Trading Company, Public Limited Company   S13



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##### Table of Contents



Pensions

|                                                            |  |                      |        |              |  |  |        | 
|----------------------------------------------------------- |  | -------------------- | ------ | ------------ |  |  | ------ | 
|                                                            |  | Sir Philip Watts     |        | Paul Skinner
|                                                            |  |                      |        |             
|Accrued pension                                             |  | £ thousand per annum
|Pension accrued at 31.12.02                                 |  |                      | 479.69 |              |  |  | 404.86 | 
|Increase in accrued pension over year                       |  |                      | 83.92  |              |  |  | 66.16  | 
|Increase in accrued pension over year (excluding inflation) |  |                      | 72.30  |              |  |  | 56.20  | 

|                                                                       |  |            |          |  |  |  |          | 
|---------------------------------------------------------------------- |  | ---------- | -------- |  |  |  | -------- | 
|Transfer values of accrued benefits                                    |  | £ thousand
|                                                                       |  |           
|At 31.12.01                                                            |  |            | 6,411.60 |  |  |  | 5,410.40 | 
|At 31.12.02                                                            |  |            | 7,913.00 |  |  |  | 6,586.50 | 
|Increase over year less Directors contributions                       |  |            | 1,476.80 |  |  |  | 1,176.10 | 
|Increase over year (excluding inflation) less
Directors contributions |  |            | 1,167.60 |  |  |  | 914.20   | 

The transfer values have been calculated in accordance with Actuarial Guidance
Note GN11.

Share options

|                                           |   |          |         |          |  |             |          |          |  |             |         |             |  |  |      |  |  |  |          |  |  |  |          | 
|------------------------------------------ | - | -------- | ------- | -------- |  | ----------- | -------- | -------- |  | ----------- | ------- | ----------- |  |  | ---- |  |  |  | -------- |  |  |  | -------- | 
|Number of 25p Ordinary shares under option
|                                          
|                                           |   |          |         |          |  | Exercised   |          |          |  |             |         |             |  |  |      |  |  |  |          |  |  | 
|                                           |   |          |         |          |  | (cancelled/ |          |          |  |             |         |             |  |  |      |  |  |  |          |  |  | 
|                                           |   | Granted  |         | lapsed)  |  |             |          |          |  |             |         |             |  |  |      |  |  |  |          | 
|At                                         |   | during   |         | during   |  | At          |          | Exercise |  | Exercisable |         | Exercisable
|1.1.02                                     |   | the year |         | the year |  | 31.12.02    |          | price    |  | from date   |         | to date    
|                                           |   |          |         |          |  |             |          |          |  |             |         |            
|Sir Philip Watts                           |   |          |         |          |  |             |          |          |  |             |         |             |  |  |      |  |  |  |          | 
|272,000                                    |   |          |        |          |  |             | (272,000 | )        |  |             |        |             |  |  | 439p |  |  |  | 11.12.97 |  |  |  | 10.12.02 | 
|308,750                                    |   |          |        |          |  |             |         |          |  |             | 308,750 |             |  |  | 363p |  |  |  | 22.12.01 |  |  |  | 21.12.08 | 
|341,000                                    |   |          |        |          |  |             |         |          |  |             | 341,000 |             |  |  | 505p |  |  |  | 23.03.03 |  |  |  | 22.03.10 | 
|465,000                                    |   |          |        |          |  |             |         |          |  |             | 465,000 |             |  |  | 552p |  |  |  | 26.03.04 |  |  |  | 25.03.11 | 
|5,214                                      | a |          |        |          |  |             | 5,214b   |          |  |             |        |             |  |  | 330p |  |  |  | 01.02.02 |  |  |  | 31.07.02 | 
|                                          |   |          | 3,251   | a        |  |             |         |          |  |             | 3,251   |             |  |  | 509p |  |  |  | 01.02.07 |  |  |  | 31.07.07 | 
|                                          |   |          | 885,000 |          |  |             |         |          |  |             | 885,000 |             |  |  | 523p |  |  |  | 21.03.05 |  |  |  | 20.03.12 | 
|                                           |   |          |         |          |  |             |          |          |  |             |         |             |  |  |      |  |  |  |          |  |  |  |          | 
|Paul Skinner                               |   |          |         |          |  |             |          |          |  |             |         |             |  |  |      |  |  |  |          | 
|139,200                                    |   |          |        |          |  |             |         |          |  |             | 139,200 |             |  |  | 439p |  |  |  | 11.12.00 |  |  |  | 10.12.07 | 
|194,700                                    |   |          |        |          |  |             |         |          |  |             | 194,700 |             |  |  | 363p |  |  |  | 22.12.01 |  |  |  | 21.12.08 | 
|341,000                                    |   |          |        |          |  |             |         |          |  |             | 341,000 |             |  |  | 505p |  |  |  | 23.03.03 |  |  |  | 22.03.10 | 
|465,000                                    |   |          |        |          |  |             |         |          |  |             | 465,000 |             |  |  | 552p |  |  |  | 26.03.04 |  |  |  | 25.03.11 | 
|5,214a                                     |   |          |        |          |  |             | 5,214b   |          |  |             |        |             |  |  | 330p |  |  |  | 01.02.02 |  |  |  | 31.07.02 | 
|                                          |   |          | 3,251a  |          |  |             |         |          |  |             | 3,251   |             |  |  | 509p |  |  |  | 01.02.07 |  |  |  | 31.07.07 | 
|                                          |   |          | 660,000 |          |  |             |         |          |  |             | 660,000 |             |  |  | 523p |  |  |  | 21.03.05 |  |  |  | 20.03.12 | 
|                                           |   |          |         |          |  |             |          |          |  |             |         |             |  |  |      |  |  |  |          |  |  |  |          | 
|Sir Mark Moody-Stuart                      |   |          |         |          |  |             |          |          |  |             |         |             |  |  |      |  |  |  |          | 
|387,000                                    |   |          |        |          |  |             | (387,000 | )        |  |             |        |             |  |  | 439p |  |  |  | 11.12.97 |  |  |  | 10.12.02 | 
|440,800                                    |   |          |        |          |  |             |         |          |  |             | 440,800 |             |  |  | 363p |  |  |  | 22.12.01 |  |  |  | 30.06.06 | 
|487,000                                    |   |          |        |          |  |             |         |          |  |             | 487,000 |             |  |  | 505p |  |  |  | 23.03.03 |  |  |  | 30.06.06 | 
|                                           |   |          |         |          |  |             |          |          |  |             |         |             |  |  |      |  |  |  |          |  |  |  |          | 

|  |  | All the options listed above relate to Shell
Transport Ordinary shares. All options are
exercisable at market price (no discount) at
grant. The options with an expiry up to and
including 2002 were exercisable from grant
except for the Shell Sharesave Scheme (see
footnote a). The remaining options were granted for 10 years
and are not exercisable within three years
of grant; 50% of those options are subject to
a performance condition with the exception
of those granted prior to appointment as a
Director of the Company. Upon vesting in
2003, of the performance-related options
granted in 2000, 50% became unconditional.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|  |  | The price range of the Ordinary shares
during the year was 361p to 543p.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| 
|  |  | There were no other changes in the above
interests in options during the period from
December 31, 2002 to March 4, 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| 
|a |  | These options are held under the Shell Sharesave
Scheme of The Shell Petroleum Company Limited.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| 
|b |  | The only options exercised in 2002: the
market price at exercise was 488p.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

Signed on behalf of the BoardJyoti Munsiff,
Secretary
March 6, 2003

S14   The
Shell Transport and Trading Company, Public Limited Company



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Group Share Plans

Set out below is a summary of the principal employee share schemes operated by
Group companies*. The shares subject to the plans are existing issued shares of
Royal Dutch or Shell Transport and no dilution of shareholders equity is
involved. Shares to be delivered by a Group company under these plans are
generally bought in the market at the time the commitment thereto is being
made.

Group Stock Option Plans

Under these plans, eligible employees are granted options over shares of Royal
Dutch or Shell Transport. The price at which the shares can be bought (the
exercise price) will not be less than the fair market value of the shares at
the date the options were granted. This is calculated as the average of the
stock exchange opening and closing prices over the five business days ending on
the date of grant, except for the USA where the grant price is the average of
the stock exchange opening and closing prices on the date of grant.

Options are exercisable three years from grant. Options lapse ten years after
grant or, if earlier, on resignation from Group employment (subject to certain
exceptions). For Group Managing Directors and the most senior executives, a
proportion of the options granted is subject to performance conditions.

For Group Managing Directors and the most senior executives 100% of options
granted in 2003 and in subsequent years will be subject to performance
conditions.

Restricted Stock Plan

Grants are made under this plan on a highly selective basis for recruitment and
retention of senior staff. A maximum of 250,000 Royal Dutch shares (or
equivalent value in Shell Transport shares) can be granted under the plan in
any year. Shares are granted subject to a three-year restriction period. The
shares, together with additional shares equivalent to the value of the
dividends payable over the restriction period, are released to the individual
at the end of the three-year period, provided that the individual has remained
in employment. Group Managing Directors are not eligible to participate in the
Restricted Stock Plan.

Global Employee Share Purchase Plan

This broad-based plan enables employees to make contributions, which are
applied quarterly to purchase Royal Dutch or Shell Transport shares at current
market value. If the acquired shares are retained in the Plan until the end of
the twelve-month cycle the employee receives an additional 15% share match. In
the USA a variant of this plan is operated where contributions are applied to
buy Royal Dutch shares at the end of the twelve-month cycle. The purchase price
is the lower of the market price on the first or last trading day of the cycle
reduced by 15%. Group Managing Directors are not eligible to participate in the
Global Employee Share Purchase Plan.

Shell Sharesave Scheme

In lieu of the Global Employee Share Purchase Plan employees in the UK continue
to participate in the Shell Sharesave Scheme. Options are granted over shares
of Shell Transport at prices not less than market value on a date not more than
30 days before grant and are normally exercisable after a three-year or
five-year contractual savings period.

Shell All-employee Share Purchase Plan

Employees in the UK may now participate in the Shell All-employee Share
Purchase Plan which is designed to encourage employee participation in their
company. Employees invest amounts up to a maximum £125 per month in Shell
Transport shares at the current market value using funds deducted from their
monthly salary. The contributions are not liable to income tax, but to maintain
the tax benefit, the shares must be held in the Plan for a defined period
(normally five years).



---

|* |  | Details of the number of shares held by Group companies in connection
with the above plans are shown in Note 22 of the Group Financial Statements
on pages G25 to G27.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Shell Transport and Trading Company, Public Limited Company   S15



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S16   The ShellTransport and Trading Company, Public Limited Company



---



##### Table of Contents






Royal Dutch/Shell Group of Companies

Report of Independent Accountants

We have audited the Financial Statements appearing on pages G2 to G33 of the
Royal Dutch/Shell Group of Companies for the years 2002, 2001 and 2000. The
preparation of Financial Statements is the responsibility of management. Our
responsibility is to express an opinion on the Financial Statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing standards
in the Netherlands and the United States. Those
standards require that we plan and perform the audit to obtain reasonable assurance
about whether the Financial Statements are free of material misstatement.

An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the Financial Statements. An audit also
includes assessing the accounting principles used and significant estimates
made by management in the preparation of Financial Statements, as well as evaluating
the overall Financial Statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the Financial Statements referred to above present
fairly, in all material respects, the financial position of the Royal Dutch/Shell Group
of Companies at December 31, 2002 and 2001 and the results of its operations
and its cash flows for each of the three years in the period ended December 31,
2002 in accordance with generally accepted accounting principles in the
Netherlands and the United States

KPMG Accountants N.V.




KPMG Accountants N.V., The Hague


PricewaterhouseCoopers LLP




PricewaterhouseCoopers LLP, London


March 5, 2003

Royal Dutch/Shell Group of Companies   G1



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##### Table of Contents



Financial Statements

|                                                  |  |      |   |      |  |           |         |      |  |  |         |   |  |  |         |  
|------------------------------------------------- |  | ---- | - | ---- |  | --------- | ------- | ---- |  |  | ------- | - |  |  | ------- | -
|Statement of Income                               |  |      |   |      |  | $ million
|                                                  |  |      |   |      |  |          
|                                                  |  | Note |   | 2002 |  | 2001      |         | 2000
|                                                  |  |      |   |      |  |           |         |     
|Sales proceeds                                    |  |      |   |      |  |           | 235,598 |      |  |  | 177,281 |   |  |  | 191,511 |  
|Sales taxes, excise duties and similar levies     |  |      |   |      |  |           | 56,167  |      |  |  | 42,070  |   |  |  | 42,365  |  
|                                                  |  |      |   |      |  |           |         |      |  |  |         |   |  |  |         |  
|Net proceeds                                      |  |      |   |      |  |           | 179,431 |      |  |  | 135,211 |   |  |  | 149,146 |  
|Cost of sales                                     |  |      |   |      |  |           | 151,214 |      |  |  | 107,839 |   |  |  | 118,328 |  
|                                                  |  |      |   |      |  |           |         |      |  |  |         |   |  |  |         |  
|Gross profit                                      |  |      |   |      |  |           | 28,217  |      |  |  | 27,372  |   |  |  | 30,818  |  
|Selling and distribution expenses                 |  |      |   |      |  |           | 9,954   |      |  |  | 7,898   |   |  |  | 7,896   |  
|Administrative expenses                           |  |      |   |      |  |           | 1,601   |      |  |  | 1,244   |   |  |  | 1,137   |  
|Exploration                                       |  |      |   |      |  |           | 991     |      |  |  | 882     |   |  |  | 755     |  
|Research and development                          |  |      |   |      |  |           | 472     |      |  |  | 387     |   |  |  | 389     |  
|                                                  |  |      |   |      |  |           |         |      |  |  |         |   |  |  |         |  
|Operating profit of Group companies               |  |      |   |      |  |           | 15,199  |      |  |  | 16,961  |   |  |  | 20,641  |  
|Share of operating profit of associated companies |  |      | 6 |      |  |           | 2,624   |      |  |  | 3,041   |   |  |  | 3,859   |  
|                                                  |  |      |   |      |  |           |         |      |  |  |         |   |  |  |         |  
|Operating profit                                  |  |      |   |      |  |           | 17,823  |      |  |  | 20,002  |   |  |  | 24,500  |  
|Interest and other income                         |  |      | 7 |      |  |           | 758     |      |  |  | 1,059   |   |  |  | 974     |  
|Interest expense                                  |  |      | 8 |      |  |           | 1,364   |      |  |  | 1,133   |   |  |  | 1,324   |  
|Currency exchange gains/(losses)                  |  |      |   |      |  |           | (23     | )    |  |  | (30     | ) |  |  | (114    | )
|                                                  |  |      |   |      |  |           |         |      |  |  |         |   |  |  |         |  
|Income before taxation                            |  |      |   |      |  |           | 17,194  |      |  |  | 19,898  |   |  |  | 24,036  |  
|Taxation                                          |  |      | 9 |      |  |           | 7,617   |      |  |  | 8,694   |   |  |  | 11,273  |  
|                                                  |  |      |   |      |  |           |         |      |  |  |         |   |  |  |         |  
|Income after taxation                             |  |      |   |      |  |           | 9,577   |      |  |  | 11,204  |   |  |  | 12,763  |  
|Income applicable to minority interests           |  |      |   |      |  |           | 158     |      |  |  | 352     |   |  |  | 44      |  
|                                                  |  |      |   |      |  |           |         |      |  |  |         |   |  |  |         |  
|Net income                                        |  |      |   |      |  |           | 9,419   |      |  |  | 10,852  |   |  |  | 12,719  |  
|                                                  |  |      |   |      |  |           |         |      |  |  |         |   |  |  |         |  

|                                                                                     |  |      |    |      |  |           |        |      |  |  |        |   |  |  |        |  
|------------------------------------------------------------------------------------ |  | ---- | -- | ---- |  | --------- | ------ | ---- |  |  | ------ | - |  |  | ------ | -
|Statement of
Comprehensive Income and Parent Companies Interest in Group Net Assets |  |      |    |      |  | $ million
|                                                                                     |  |      |    |      |  |          
|                                                                                     |  | Note |    | 2002 |  | 2001      |        | 2000
|                                                                                     |  |      |    |      |  |           |        |     
|Net
income                                                                           |  |      | 3  |      |  |           | 9,419  |      |  |  | 10,852 |   |  |  | 12,719 |  
|Other
comprehensive income, net of tax:                                              |  |      | 5  |      |  |           |        |      |  |  |        |   |  |  |        |  
|currency
translation differences                                                     |  |      |    |      |  |           | 2,439  |      |  |  | (1,689 | ) |  |  | (2,717 | )
|unrealised gains/(losses) on securities                                              |  |      |    |      |  |           | 25     |      |  |  | (143   | ) |  |  | (238   | )
|unrealised gains/(losses) on cash flow hedges                                        |  |      |    |      |  |           | (225   | )    |  |  | (14    | ) |  |  |        |  
|minimum pension liability adjustments                                                |  |      |    |      |  |           | (1,475 | )    |  |  | (127   | ) |  |  | (70    | )
|                                                                                     |  |      |    |      |  |           |        |      |  |  |        |   |  |  |        |  
|Comprehensive
income                                                                 |  |      |    |      |  |           | 10,183 |      |  |  | 8,879  |   |  |  | 9,694  |  
|Net
distribution to Parent Companies                                                 |  |      | 3  |      |  |           | (5,435 | )    |  |  | (9,163 | ) |  |  | (8,579 | )
|Increase
in Parent Companies shares held, net of dividends received                 |  |      | 22 |      |  |           | (844   | )    |  |  | (642   | ) |  |  | (200   | )
|Parent
Companies interest in Group net assets at January 1                          |  |      |    |      |  |           | 56,160 |      |  |  | 57,086 |   |  |  | 56,171 |  
|                                                                                     |  |      |    |      |  |           |        |      |  |  |        |   |  |  |        |  
|Parent
Companies interest in Group net assets at December 31                        |  |      | 4  |      |  |           | 60,064 |      |  |  | 56,160 |   |  |  | 57,086 |  
|                                                                                     |  |      |    |      |  |           |        |      |  |  |        |   |  |  |        |  
|Applicable
to:                                                                       |  |      |    |      |  |           |        |      |  |  |        |   |  |  |        |  
|Royal
Dutch (60%)                                                                    |  |      |    |      |  |           | 36,038 |      |  |  | 33,696 |   |  |  | 34,252 |  
|Shell
Transport (40%)                                                                |  |      |    |      |  |           | 24,026 |      |  |  | 22,464 |   |  |  | 22,834 |  
|                                                                                     |  |      |    |      |  |           |        |      |  |  |        |   |  |  |        |  
|                                                                                     |  |      |    |      |  |           | 60,064 |      |  |  | 56,160 |   |  |  | 57,086 |  
|                                                                                     |  |      |    |      |  |           |        |      |  |  |        |   |  |  |        |  

G2   Royal Dutch/Shell Group of Companies



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##### Table of Contents



|                                                           |                                          |                      |    |      |    |      |         |        |        |        |        |        |        | 
|---------------------------------------------------------- | ---------------------------------------- | -------------------- | -- | ---- | -- | ---- | ------- | ------ | ------ | ------ | ------ | ------ | ------ | 
|Statement of Assets and Liabilities                        |                                          | $ million           
|                                                           |                                          |                     
|                                                           |                                          |                      |    |      |    |      |         | Dec 31 |        | Dec 31
|                                                           |                                          |                      |    | Note |    | 2002 |         | 2001  
|                                                           |                                          |                      |    |      |    |      |         |       
|Fixed assets                                               |                                          |                      |    |      |    |      |         |        |        |        |        |       
|                                                           | Tangible assets                          |                      |    | 10   |    |      |         | 79,390 |        |        |        | 51,370 |       
|                                                           | Intangible assets                        |                      |    | 10   |    |      |         | 4,696  |        |        |        | 939    |       
|                                                           | Investments                              |                      |    |      |    |      |         |        |        |        |        |        |       
|                                                           |                                          | associated companies |    |      | 6  |      |         |        | 17,621 |        |        |        | 18,018 | 
|                                                           |                                          | securities           |    |      | 14 |      |         |        | 1,719  |        |        |        | 1,914  | 
|                                                           |                                          | other                |    |      |    |      |         |        | 1,420  |        |        |        | 1,108  | 
|                                                           |                                          |                      |    |      |    |      |         |        |        |        |        |        |       
|Total fixed assets                                         |                                          |                      |    |      |    |      | 104,846 |        |        |        | 73,349 |       
|                                                           |                                          |                      |    |      |    |      |         |        |        |        |        |        |       
|Other long-term assets                                     |                                          |                      | 11 |      |    |      | 7,299   |        |        |        | 7,716  |       
|                                                           |                                          |                      |    |      |    |      |         |        |        |        |        |        |       
|Current assets                                             |                                          |                      |    |      |    |      |         |        |        |        |        |       
|                                                           | Inventories                              |                      |    | 12   |    |      |         | 10,298 |        |        |        | 6,341  |       
|                                                           | Accounts receivable                      |                      |    | 13   |    |      |         | 28,687 |        |        |        | 17,467 |       
|                                                           | Short-term securities                    |                      |    | 14   |    |      |         | 5      |        |        |        |       |       
|                                                           | Cash and cash equivalents                |                      |    | 14   |    |      |         | 1,556  |        |        |        | 6,670  |       
|                                                           |                                          |                      |    |      |    |      |         |        |        |        |        |        |       
|Total current assets                                       |                                          |                      |    |      |    |      | 40,546  |        |        |        | 30,478 |       
|                                                           |                                          |                      |    |      |    |      |         |        |        |        |        |        |       
|Current liabilities:amounts due within one year            |                                          |                      |    |      |    |      |         |        |        |        |        |       
|                                                           | Short-term debt                          |                      |    | 15   |    |      |         | 12,874 |        |        |        | 3,988  |       
|                                                           | Accounts payable and accrued liabilities |                      |    | 17   |    |      |         | 32,078 |        |        |        | 18,884 |       
|                                                           | Taxes payable                            |                      |    | 9    |    |      |         | 5,010  |        |        |        | 4,494  |       
|                                                           | Dividends payable to Parent Companies    |                      |    |      |    |      |         | 5,153  |        |        |        | 6,101  |       
|                                                           |                                          |                      |    |      |    |      |         |        |        |        |        |        |       
|Total current liabilities                                  |                                          |                      |    |      |    |      | 55,115  |        |        |        | 33,467 |       
|                                                           |                                          |                      |    |      |    |      |         |        |        |        |        |        |       
|Net current assets/(liabilities)                           |                                          |                      |    |      |    |      | (14,569 | )      |        |        | (2,989 | )     
|                                                           |                                          |                      |    |      |    |      |         |        |        |        |        |        |       
|Total assets less current liabilities                      |                                          |                      |    |      |    |      | 97,576  |        |        |        | 78,076 |       
|                                                           |                                          |                      |    |      |    |      |         |        |        |        |        |        |       
|Long-term liabilities:amounts due after more than one year |                                          |                      |    |      |    |      |         |        |        |        |        |       
|                                                           | Long-term debt                           |                      |    | 15   |    |      |         | 6,817  |        |        |        | 1,832  |       
|                                                           | Other                                    |                      |    | 18   |    |      |         | 6,118  |        |        |        | 4,515  |       
|                                                           |                                          |                      |    |      |    |      |         |        |        |        |        |        |       
|                                                           |                                          |                      |    |      |    |      | 12,935  |        |        |        | 6,347  |       
|                                                           |                                          |                      |    |      |    |      |         |        |        |        |        |        |       
|Provisions                                                 |                                          |                      |    |      |    |      |         |        |        |        |        |       
|                                                           | Deferred taxation                        |                      |    | 9    |    |      |         | 12,471 |        |        |        | 7,146  |       
|                                                           | Pensions and similar obligations         |                      |    | 20   |    |      |         | 5,016  |        |        |        | 2,331  |       
|                                                           | Decommissioning and restoration costs    |                      |    | 23   |    |      |         | 3,528  |        |        |        | 2,615  |       
|                                                           |                                          |                      |    |      |    |      |         |        |        |        |        |        |       
|                                                           |                                          |                      |    |      |    |      | 21,015  |        |        |        | 12,092 |       
|                                                           |                                          |                      |    |      |    |      |         |        |        |        |        |        |       
|Group net assets before minority interests                 |                                          |                      |    |      |    |      | 63,626  |        |        |        | 59,637 |       
|Minority interests                                         |                                          |                      |    |      |    |      | 3,562   |        |        |        | 3,477  |       
|                                                           |                                          |                      |    |      |    |      |         |        |        |        |        |        |       
|Net assets                                                 |                                          |                      |    |      |    |      | 60,064  |        |        |        | 56,160 |       
|                                                           |                                          |                      |    |      |    |      |         |        |        |        |        |        |       

Royal Dutch/Shell Group of Companies   G3



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##### Table of Contents



|                                                                       |                                                                                                                            |                                                             |                                          |    |      |           |         |         |        |        |         |        |        |        |        |        |        |         |  
|---------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------- | ---------------------------------------- | -- | ---- | --------- | ------- | ------- | ------ | ------ | ------- | ------ | ------ | ------ | ------ | ------ | ------ | ------- | -
|Statement of Cash Flows (see Note 19)                                  |                                                                                                                            |                                                             |                                          |    |      | $ million
|                                                                       |                                                                                                                            |                                                             |                                          |    |      |          
|                                                                       |                                                                                                                            |                                                             |                                          |    | Note |           | 2002    |         | 2001   |        | 2000   
|                                                                       |                                                                                                                            |                                                             |                                          |    |      |           |         |         |        |        |        
|Cash flow provided by operating activities                             |                                                                                                                            |                                                             |                                          |    |      |           |         |         |        |        |         |        |        |        |        |       
|                                                                       | Net income                                                                                                                 |                                                             |                                          |    |      |           |         | 9,419   |        |        |         | 10,852 |        |        |        | 12,719 |       
|                                                                       | Adjustments to reconcile net income to cash flow provided by operating activities
Depreciation, depletion and amortisation |                                                             |                                          | 10 |      |           |         | 8,454   |        |        |         | 6,117  |        |        |        | 7,885  |       
|                                                                       |                                                                                                                            | Profit on sale of assets                                    |                                          |    |      |           |         |         | (367   | )      |         |        | (133   | )      |        |        | (1,026 | )      
|                                                                       |                                                                                                                            | Movements in:                                               |                                          |    |      |           |         |         |        |        |         |        |        |        |        |        |        |        
|                                                                       |                                                                                                                            |                                                             | inventories                              |    |      |           |         |         |        | (1,461 | )       |        |        | 1,067  |        |        |        | (1,268  | )
|                                                                       |                                                                                                                            |                                                             | accounts receivable                      |    |      |           |         |         |        | (5,761 | )       |        |        | 8,519  |        |        |        | (10,007 | )
|                                                                       |                                                                                                                            |                                                             | accounts payable and accrued liabilities |    |      |           |         |         |        | 6,885  |         |        |        | (7,787 | )      |        |        | 9,741   |  
|                                                                       |                                                                                                                            |                                                             | taxes payable                            |    |      |           |         |         |        | (710   | )       |        |        | (1,443 | )      |        |        | 967     |  
|                                                                       |                                                                                                                            |                                                             | short-term securities                    |    |      |           |         |         |        |       |         |        |        |       |        |        |        | (2      | )
|                                                                       |                                                                                                                            | Associated companies: dividends more/(less) than net income |                                          |    | 6    |           |         |         | 313    |        |         |        | 265    |        |        |        | (132   | )      
|                                                                       |                                                                                                                            | Deferred taxation and other provisions                      |                                          |    |      |           |         |         | 273    |        |         |        | 129    |        |        |        | 491    |        
|                                                                       |                                                                                                                            | Long-term liabilities and other                             |                                          |    |      |           |         |         | (838   | )      |         |        | (1,005 | )      |        |        | (1,053 | )      
|                                                                       |                                                                                                                            | Income applicable to minority interests                     |                                          |    |      |           |         |         | 158    |        |         |        | 352    |        |        |        | 44     |        
|                                                                       |                                                                                                                            |                                                             |                                          |    |      |           |         |         |        |        |         |        |        |        |        |        |       
|Cash flow provided by operating activities                             |                                                                                                                            |                                                             |                                          |    |      |           | 16,365  |         |        |        | 16,933  |        |        |        | 18,359 |       
|                                                                       |                                                                                                                            |                                                             |                                          |    |      |           |         |         |        |        |         |        |        |        |        |        |       
|Cash flow used in investing activities                                 |                                                                                                                            |                                                             |                                          |    |      |           |         |         |        |        |         |        |        |        |        |       
|                                                                       | Capital expenditure (including capitalised leases)                                                                         |                                                             |                                          | 10 |      |           |         | (12,184 | )      |        |         | (9,626 | )      |        |        | (6,209 | )     
|                                                                       | Acquisitions (Enterprise Oil, Pennzoil-Quaker State and additional shares in Equilon)                                      |                                                             |                                          |    |      |           |         |         |        |        |         | 19     |        |        |        | (8,925 | )     
|                                                                       | Proceeds from sale of assets                                                                                               |                                                             |                                          |    |      |           |         | 1,099   |        |        |         | 1,265  |        |        |        | 3,852  |       
|                                                                       | New investments in associated companies                                                                                    |                                                             |                                          | 6  |      |           |         | (1,289  | )      |        |         | (1,074 | )      |        |        | (1,161 | )     
|                                                                       | Disposals of investments in associated companies                                                                           |                                                             |                                          |    |      |           |         | 501     |        |        |         | 507    |        |        |        | 2,283  |       
|                                                                       | Movement in other investments                                                                                              |                                                             |                                          |    |      |           |         | 83      |        |        |         | (180   | )      |        |        | (336   | )     
|                                                                       |                                                                                                                            |                                                             |                                          |    |      |           |         |         |        |        |         |        |        |        |        |        |       
|Cash flow used in investing activities                                 |                                                                                                                            |                                                             |                                          |    |      |           | (20,715 | )       |        |        | (9,108  | )      |        |        | (1,571 | )     
|                                                                       |                                                                                                                            |                                                             |                                          |    |      |           |         |         |        |        |         |        |        |        |        |        |       
|Cash flow used in financing activities                                 |                                                                                                                            |                                                             |                                          |    |      |           |         |         |        |        |         |        |        |        |        |       
|                                                                       | Long-term debt (including short-term part)
new borrowings                                                                  |                                                             |                                          |    |      |           |         | 5,267   |        |        |         | 180    |        |        |        | 945    |       
|                                                                       |                                                                                                                            | repayments                                                  |                                          |    |      |           |         |         | (5,610 | )      |         |        | (1,115 | )      |        |        | (1,276 | )      
|                                                                       |                                                                                                                            |                                                             |                                          |    |      |           |         |         |        |        |         |        |        |        |        |        |       
|                                                                       |                                                                                                                            |                                                             |                                          |    |      |           | (343    | )       |        |        | (935    | )      |        |        | (331   | )     
|                                                                       | Net increase/(decrease) in short-term debt                                                                                 |                                                             |                                          |    |      |           |         | 7,058   |        |        |         | (794   | )      |        |        | (3,271 | )     
|                                                                       | Change in minority interests                                                                                               |                                                             |                                          |    |      |           |         | 421     |        |        |         | (206   | )      |        |        | (22    | )     
|                                                                       | Dividends paid to:                                                                                                         |                                                             |                                          |    |      |           |         |         |        |        |         |        |        |        |        |        |       
|                                                                       |                                                                                                                            | Parent Companies                                            |                                          |    |      |           |         |         | (6,961 | )      |         |        | (9,406 | )      |        |        | (5,239 | )      
|                                                                       |                                                                                                                            | minority interests                                          |                                          |    |      |           |         |         | (228   | )      |         |        | (221   | )      |        |        | (262   | )      
|                                                                       |                                                                                                                            |                                                             |                                          |    |      |           |         |         |        |        |         |        |        |        |        |        |       
|Cash flow used in financing activities                                 |                                                                                                                            |                                                             |                                          |    |      |           | (53     | )       |        |        | (11,562 | )      |        |        | (9,125 | )     
|                                                                       |                                                                                                                            |                                                             |                                          |    |      |           |         |         |        |        |         |        |        |        |        |        |       
|Parent Companies shares: net sales/(purchases) and dividends received |                                                                                                                            |                                                             |                                          |    |      |           | (864    | )       |        |        | (773    | )      |        |        | (200   | )     
|Currency translation differences relating to cash and cash equivalents |                                                                                                                            |                                                             |                                          |    |      |           | 153     |         |        |        | (251    | )      |        |        | (75    | )     
|                                                                       |                                                                                                                            |                                                             |                                          |    |      |           |         |         |        |        |         |        |        |        |        |        |       
|Increase/(decrease) in cash and cash equivalents                       |                                                                                                                            |                                                             |                                          |    |      |           | (5,114  | )       |        |        | (4,761  | )      |        |        | 7,388  |       
|                                                                       |                                                                                                                            |                                                             |                                          |    |      |           |         |         |        |        |         |        |        |        |        |        |       
|Cash and cash equivalents at January 1                                 |                                                                                                                            |                                                             |                                          |    |      |           | 6,670   |         |        |        | 11,431  |        |        |        | 4,043  |       
|                                                                       |                                                                                                                            |                                                             |                                          |    |      |           |         |         |        |        |         |        |        |        |        |        |       
|Cash and cash equivalents at December 31                               |                                                                                                                            |                                                             |                                          |    |      |           | 1,556   |         |        |        | 6,670   |        |        |        | 11,431 |       
|                                                                       |                                                                                                                            |                                                             |                                          |    |      |           |         |         |        |        |         |        |        |        |        |        |       

G4   Royal Dutch/Shell Group of Companies



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##### Table of Contents



Notes to the Financial Statements

1 The Royal Dutch/Shell Group of
Companies

The Parent Companies, Royal Dutch Petroleum Company (Royal Dutch) and The
Shell Transport and Trading Company, p.l.c. (Shell Transport) are holding
companies which together own, directly or indirectly, investments in numerous
companies known collectively as the Royal Dutch/Shell Group. Group companies
are engaged in all principal aspects of the oil and natural gas business
throughout the world. They also have substantial chemical interests. These
activities are conducted in more than 145 countries and territories and are
subject to changing economic, regulatory and political conditions.

Arrangements between Royal Dutch and Shell Transport provide, inter alia, that
notwithstanding variations in shareholdings, Royal Dutch and Shell Transport
shall share in the aggregate net assets and in the aggregate dividends and
interest received from Group companies in the proportion of 60:40. It is
further arranged that the burden of all taxes in the nature of or corresponding
to an income tax leviable in respect of such dividends and interest shall fall
in the same proportion.

The 60:40 arrangements referred to above have been supplemented by further
arrangements, beginning with Group dividends payable to the Parent Companies in
respect of 1977, whereby each Parent Company is to bring into account towards
its share in the 60:40 division of dividends from Group companies tax credits
and other tax benefits which are related to the liability to tax of a Group
company and which arise to the Parent Company or which would arise to the
holders of its ordinary shares if there were to be an immediate full onward
distribution to them of Group dividends (for which purpose all shareholders are
assumed to be individuals resident and subject to tax in the country of
residence of the Parent Company in question).

2 Accounting policies

Nature of the Financial Statements

The accounts of the Parent Companies are not included in the Financial
Statements, the objective of which is to demonstrate the financial position,
results of operations and cash flows of a group of undertakings in which each
Parent Company has an interest in common whilst maintaining its separate
identity. The Financial Statements reflect an aggregation in US dollars of the
accounts of companies in which Royal Dutch and Shell Transport together, either
directly or indirectly, have control either through a majority of the voting
rights or the right to exercise a controlling influence. Investments in
companies over which Group companies have significant influence but not control
are classified as associated companies and are accounted for on the equity
basis. Certain joint ventures are taken up in the Financial Statements in
proportion to the relevant Group interest.

The Financial Statements have been prepared under the historical cost
convention. They have been prepared in all material respects in accordance with
generally accepted accounting principles in the Netherlands and the United
States.

The preparation of Financial Statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the Financial Statements and notes thereto.
Actual results could differ from those estimates.

Currency translation

Assets and liabilities of non-dollar Group companies are translated to dollars
at year-end rates of exchange, whilst their statements of income and cash flows
are translated at quarterly average rates. Translation differences arising on
aggregation are taken directly to a currency translation differences account,
which forms part of Parent Companies interest in Group net assets. Upon
disinvestment or liquidation of a non-dollar Group company, cumulative currency
translation differences related to that company are taken to income.

The dollar equivalents of exchange gains and losses arising as a result of
foreign currency transactions (including those in respect of inter-company
balances unless related to transactions of a long-term investment nature) are
included in Group net income.

Acquisitions

Acquisitions are accounted for using the purchase method. Assets acquired and
liabilities assumed are recognised at their fair value at the date of
acquisition; the amount of the purchase consideration above this value is
reflected as goodwill.

Royal Dutch/Shell Group of Companies   G5



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Securities

Securities of a trading nature are carried at fair value with unrealised
holding gains and losses being included in net income. Securities intended to
be held to maturity are carried at cost, unless permanently impaired in which
case they are carried at fair value. All other securities are classified as
available for sale and are carried at fair value, with unrealised holding gains
and losses being taken directly to Parent Companies interest in Group net
assets. Upon sale or maturity, the net gains and losses are included in net
income.

Short-term securities with a maturity from acquisition of three months or less
and that are readily convertible into known amounts of cash are classified as
cash equivalents. Securities forming part of a portfolio which is required to
be held long-term are classified under fixed assets  investments.

Parent Companies shares held by Group companies are not included in the
Groups net assets but reflected as a deduction from Parent Companies interest
in Group net assets.

Cash flows resulting from movements in securities of a trading nature are
reported under cash flow provided by operating activities while cash flows
resulting from movements in other securities are reported under cash flow used
in investing activities.

Derivative instruments

US accounting standard, FAS 133, as amended, which requires all derivative
financial instruments (derivatives), with certain exceptions, to be recorded
in the Statement of Assets and Liabilities (as assets or liabilities in respect
of risk management activities) at their fair value, has been adopted from the
beginning of 2001. Adoption of the standard did not have a significant effect
on the Groups Financial Statements and the transition adjustment as at January
1, 2001 was negligible.

Group companies use derivatives in the management of interest rate risk,
foreign currency risk and commodity price risk. The carrying amount of all
derivatives, other than those meeting the normal purchases and sales exception,
is measured using market prices. Those derivatives qualifying and designated as
hedges are either: (1) a hedge of the fair value of a recognised asset or
liability or of an unrecognised firm commitment (fair value hedge), or (2) a
hedge of the variability of cash flows to be received or paid related to a
recognised asset or liability or a forecasted transaction (cash flow hedge),
or (3) a hedge of the foreign currency exposure (foreign currency hedge) of a
recognised asset or liability or of an unrecognised firm commitment (fair value
hedge) or of the variability of foreign currency cash flows associated with a
forecasted transaction, a recognised asset or liability or an unrecognised firm
commitment (cash flow hedge).

The effective portion of a change in the carrying amount of a cash flow hedge
is recorded in other comprehensive income, until income reflects the
variability of underlying cash flows; any ineffective portion is taken to
income. A change in the carrying amount of a fair value hedge is taken to
income, together with the consequential adjustment to the carrying amount of
the hedged item. A change in the carrying amount of a foreign currency hedge is
recorded on the basis of whether the hedge is a fair value hedge or a cash flow
hedge. A change in the carrying amount of other derivatives is taken to income.

Group companies formally document all relationships between hedging instruments
and hedged items, as well as risk management objectives and strategies for
undertaking various hedge transactions. The effectiveness of a hedge is also
continually assessed. When effectiveness ceases, hedge accounting is
discontinued.

Inventories

Inventories are stated at cost to the Group or net realisable value, whichever
is lower. Such cost is determined for the most part by the first-in first-out
method (FIFO), but the cost of certain North American inventories is determined
on the basis of the last-in first-out method (LIFO). Cost comprises direct
purchase costs, cost of production, transportation and manufacturing expenses
and taxes.

Exploration costs

Group companies follow the successful efforts method of accounting for oil and
gas exploration costs. Exploration costs are charged to income when incurred,
with the exception that exploratory drilling costs are initially included in
tangible fixed assets pending determination of commercial reserves. The
determination of commercial reserves occurs within one year unless such
reserves are in an area requiring major capital expenditure before production
could begin. Should the efforts be determined unsuccessful, they are then
charged to income.

G6   Royal Dutch/Shell Group of Companies



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##### Table of Contents



Interest capitalisation

Interest is capitalised, as an increase in tangible fixed assets, on
significant capital projects during construction. Interest is also capitalised,
as an increase in investments in associated companies, on funds invested by
Group companies which are used by associated companies for significant capital
projects during construction.

Depreciation, depletion and amortisation

Tangible fixed assets related to production activities are depreciated on a
unit-of-production basis over the proved developed reserves of the field
concerned, except in the case of assets whose useful life is shorter than the
lifetime of the field, in which case the straight-line method is applied.
Rights and concessions are depleted on the unit-of-production basis over the
total proved reserves of the relevant area. Unproved properties are amortised
as required by particular circumstances. Other tangible fixed assets are
generally depreciated on a straight-line basis over their estimated useful
lives (five to twenty years). New US accounting standard FAS 142 requires that
goodwill, and other intangible fixed assets with an indefinite life, are no
longer amortised but instead tested for impairment annually. This standard was
effective for the Group from the beginning of 2002 and adoption did not have a
significant effect on the Groups Financial Statements. Other intangible fixed
assets continue to be amortised on a straight-line basis over their estimated
useful lives (with a maximum of forty years).

The carrying amounts of fixed assets are reviewed for possible impairment
whenever events or changes in circumstances indicate. For this purpose, assets
are grouped based on separately identifiable and largely independent cash
flows. Where impairment is indicated, the carrying amounts of assets are
written down to fair value, usually determined as the amount of estimated
discounted future cash flows. Assets held for sale are written down to the
amount of estimated net realisable value.

In the evaluation for impairment of oil and gas properties, future cash flows
are estimated using risk assessments on field and reservoir performance and
include outlooks on proved and unproved reserves, which are then discounted or
risk-weighted utilising the results from projections of geological, production,
recovery and economic factors.

Environmental expenditures

Liabilities for environmental remediation resulting from past operations or
events are recognised in the period in which an obligation to a third party
arises and the amount can be reasonably estimated. Measurement of liabilities
is based on current legal requirements and existing technology. Recognition of
any joint and several liability is based upon Group companies best estimate of
their final pro-rata share of the liability. Liabilities are determined
independently of expected insurance recoveries. Recoveries are recognised and
reported as separate events and brought into account when reasonably certain of
realisation. The carrying amount of liabilities is regularly reviewed and
adjusted for new facts or changes in law or technology.

Decommissioning and restoration costs

Estimated decommissioning and restoration costs are based on current
requirements, technology and price levels. In respect of oil and gas production
activities, the estimated cost is provided over the life of the proved
developed reserves on a unit-of-production basis. The recorded liabilities are
reflected as a provision in the Statement of Assets and Liabilities. For other
activities, the estimated cost is provided over the remaining life of a
facility on a straight-line basis once an obligation crystallises and the
amount can be reasonably estimated. Changes in estimates of costs are accrued
on a prospective basis.

Deferred taxation

Deferred taxation is provided using the comprehensive liability method of
accounting for income taxes based on provisions of enacted laws. Recognition is
given to deferred tax assets and liabilities for the expected future tax
consequences of events that have been recognised in the Financial Statements or
in the tax returns. In estimating these tax consequences, consideration is
given to expected future events. The measurement of deferred tax assets is
reduced, if necessary, by a valuation allowance representing the amount of any
tax benefits for which there is uncertainty of realisation.

Employee retirement plans

Retirement plans to which employees contribute and many non-contributory plans
are generally funded by payments to independent trusts. Where, due to local
conditions, a plan is not funded, a provision which is not less than the
present value of accumulated pension benefits, based on present salary levels,
is included in the Financial Statements. Valuations of both funded and unfunded
plans are carried out by independent actuaries.

Royal Dutch/Shell Group of Companies   G7



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Pension cost primarily represents the increase in actuarial present value of
the obligation for pension benefits based on employee service during the year
and the interest on this obligation in respect of employee service in previous
years, net of the expected return on plan assets.

Postretirement benefits other than pensions

Some Group companies provide certain postretirement health care and life
insurance benefits to retirees, the entitlement to which is usually based on
the employee remaining in service up to retirement age and the completion of a
minimum service period. The expected costs of these benefits are accrued over
the periods employees render service to the Group. These plans are not funded.
A provision is included in the Financial Statements which is sufficient to
cover the present value of the accumulated postretirement benefit obligation
based on current assumptions. Valuations of these obligations are carried out
by independent actuaries.

Stock-based compensation plans

Group companies account for stock-based compensation plans in accordance with
the intrinsic value method. This method requires no recognition of compensation
expense for plans where the exercise price is not at a discount to the market
value at the date of the grant, and the number of options is fixed on the date
of grant. However, recognition of compensation expense is required for variable
award (performance-related) plans over the vesting periods of such plans, based
on the then current market values of the underlying stock.

Sales proceeds

Sales proceeds are determined by reference to the sales price of goods
delivered and services rendered during the period. Sales between Group
companies are based on prices generally equivalent to commercially available
prices.

Administrative expenses

Administrative expenses are those which do not relate directly to the
activities of a single business segment and include expenses incurred in the
management and co-ordination of multi-segment enterprises.

Research and development

Research and development expenditure is charged to income as incurred, with the
exception of that on buildings and major items of equipment which have
alternative use.

Reclassifications

Certain prior-year amounts have been reclassified to conform with current-year
presentation.

G8   Royal Dutch/Shell Group of Companies



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##### Table of Contents



3 Division of Group net income between the Parent Companies

The division of Group net income, in accordance with Note 1, is as follows:

|                                          |  |           |       |             |  |                 |       |  |  |  |       | 
|----------------------------------------- |  | --------- | ----- | ----------- |  | --------------- | ----- |  |  |  | ----- | 
|2002                                      |  | $ million
|                                          |  |          
|                                          |  | Total     |       | Royal Dutch |  | Shell Transport
|                                          |  |           |       | (60%)       |  | (40%)          
|                                          |  |           |       |             |  |                 |       | 
|Group net income                          |  |           | 9,419 |             |  |                 | 5,651 |  |  |  | 3,768 | 
|lessnet distributions to Parent Companies |  |           | 5,435 |             |  |                 | 3,261 |  |  |  | 2,174 | 
|                                          |  |           |       |             |  |                 |       |  |  |  |       | 
|Undistributed net income                  |  |           | 3,984 |             |  |                 | 2,390 |  |  |  | 1,594 | 
|                                          |  |           |       |             |  |                 |       |  |  |  |       | 

|                                          |  |           |        |             |  |                 |       |  |  |  |       | 
|----------------------------------------- |  | --------- | ------ | ----------- |  | --------------- | ----- |  |  |  | ----- | 
|2001                                      |  | $ million
|                                          |  |          
|                                          |  | Total     |        | Royal Dutch |  | Shell Transport
|                                          |  |           |        | (60%)       |  | (40%)          
|                                          |  |           |        |             |  |                 |       | 
|Group net income                          |  |           | 10,852 |             |  |                 | 6,511 |  |  |  | 4,341 | 
|lessnet distributions to Parent Companies |  |           | 9,163  |             |  |                 | 5,498 |  |  |  | 3,665 | 
|                                          |  |           |        |             |  |                 |       |  |  |  |       | 
|Undistributed net income                  |  |           | 1,689  |             |  |                 | 1,013 |  |  |  | 676   | 
|                                          |  |           |        |             |  |                 |       |  |  |  |       | 

|                                          |  |           |        |             |  |                 |       |  |  |  |       | 
|----------------------------------------- |  | --------- | ------ | ----------- |  | --------------- | ----- |  |  |  | ----- | 
|2000                                      |  | $ million
|                                          |  |          
|                                          |  | Total     |        | Royal Dutch |  | Shell Transport
|                                          |  |           |        | (60%)       |  | (40%)          
|                                          |  |           |        |             |  |                 |       | 
|Group net income                          |  |           | 12,719 |             |  |                 | 7,631 |  |  |  | 5,088 | 
|lessnet distributions to Parent Companies |  |           | 8,579  |             |  |                 | 5,147 |  |  |  | 3,432 | 
|                                          |  |           |        |             |  |                 |       |  |  |  |       | 
|Undistributed net income                  |  |           | 4,140  |             |  |                 | 2,484 |  |  |  | 1,656 | 
|                                          |  |           |        |             |  |                 |       |  |  |  |       | 

4 Parent Companies interest in Group net assets

|                                                                   |                  |  |           |      |      |  |        |     |   |  |        |     | 
|------------------------------------------------------------------ | ---------------- |  | --------- | ---- | ---- |  | ------ | --- | - |  | ------ | --- | 
|                                                                   |                  |  | $ million
|                                                                   |                  |  |          
|                                                                   |                  |  | 2002      |      | 2001 |  | 2000  
|                                                                   |                  |  |           |      |      |  |       
|Invested by Parent Companies                                       |                  |  | 741       |      |      |  | 741    |     |   |  | 741    |    
|Retained earnings of Group companies                               |                  |  | 68,045    |      |      |  | 64,061 |     |   |  | 62,372 |    
|Parent Companies shares held,
net of dividends received (Note 22) |                  |  | (2,797    | )    |      |  | (1,953 | )   |   |  | (1,311 | )  
|Cumulative currency translation differences                        |                  |  | (3,897    | )    |      |  | (6,336 | )   |   |  | (4,647 | )  
|Unrealised gains/(losses) on:                                      |                  |  |           |      |      |  |        |     |   |  |        |    
|                                                                   | securities       |  |           | 11   |      |  |        | (14 | ) |  |        | 129 | 
|                                                                   | cash flow hedges |  |           | (239 | )    |  |        | (14 | ) |  |        |     | 
|Minimum pension liability adjustments                              |                  |  | (1,800    | )    |      |  | (325   | )   |   |  | (198   | )  
|                                                                   |                  |  |           |      |      |  |        |     |   |  |        |    
|Balance at December 31                                             |                  |  | 60,064    |      |      |  | 56,160 |     |   |  | 57,086 |    
|                                                                   |                  |  |           |      |      |  |        |     |   |  |        |    

Earnings retained by the subsidiary and associated companies of the Group
Holding Companies (namely Shell Petroleum N.V. and The Shell Petroleum Company
Limited) and Shell Petroleum Inc. amounted to $17,850 million at December 31,
2002 (2001: $21,625 million; 2000: $22,615 million). Provision has not been
made for taxes on possible future distribution of these undistributed earnings
as these earnings have been, or will be, substantially reinvested by the
companies concerned. It is not, therefore, meaningful to provide for these
taxes nor is it practicable to estimate their full amount or the withholding
tax element.

Royal Dutch/Shell Group of Companies   G9



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5 Other comprehensive income

|                                                                       |  |                     |        |     |  |           |     |   |  |  |        |  
|---------------------------------------------------------------------- |  | ------------------- | ------ | --- |  | --------- | --- | - |  |  | ------ | -
|2002                                                                   |  | $ million          
|                                                                       |  |                    
|                                                                       |  | Net credit/(charge)
|                                                                       |  |                    
|                                                                       |  | Pre-tax             |        | Tax |  | After tax
|                                                                       |  |                     |        |     |  |          
|Currency translation differences                                       |  |                     | 2,474  |     |  |           | 3   |   |  |  | 2,477  |  
|Reclassifications                                                      |  |                     | (38    | )   |  |           |    |   |  |  | (38    | )
|                                                                       |  |                     |        |     |  |           |     |   |  |  |        |  
|Currency translation differences
net of reclassifications              |  |                     | 2,436  |     |  |           | 3   |   |  |  | 2,439  |  
|                                                                       |  |                     |        |     |  |           |     |   |  |  |        |  
|Unrealised gains/(losses) on securities                                |  |                     | 26     |     |  |           | 10  |   |  |  | 36     |  
|Reclassifications                                                      |  |                     | (12    | )   |  |           | 1   |   |  |  | (11    | )
|                                                                       |  |                     |        |     |  |           |     |   |  |  |        |  
|Unrealised gains/(losses) on securities
net of reclassifications       |  |                     | 14     |     |  |           | 11  |   |  |  | 25     |  
|                                                                       |  |                     |        |     |  |           |     |   |  |  |        |  
|Unrealised gains/(losses) on cash flow hedges                          |  |                     | (209   | )   |  |           | (7  | ) |  |  | (216   | )
|Reclassifications                                                      |  |                     | (9     | )   |  |           |    |   |  |  | (9     | )
|                                                                       |  |                     |        |     |  |           |     |   |  |  |        |  
|Unrealised gains/(losses) on cash flow hedges
net of reclassifications |  |                     | (218   | )   |  |           | (7  | ) |  |  | (225   | )
|                                                                       |  |                     |        |     |  |           |     |   |  |  |        |  
|Minimum pension liability adjustments                                  |  |                     | (2,446 | )   |  |           | 971 |   |  |  | (1,475 | )
|                                                                       |  |                     |        |     |  |           |     |   |  |  |        |  
|Other comprehensive income                                             |  |                     | (214   | )   |  |           | 978 |   |  |  | 764    |  
|                                                                       |  |                     |        |     |  |           |     |   |  |  |        |  

|                                                                       |  |                     |        |     |  |           |     |   |  |  |        |  
|---------------------------------------------------------------------- |  | ------------------- | ------ | --- |  | --------- | --- | - |  |  | ------ | -
|2001                                                                   |  | $ million          
|                                                                       |  |                    
|                                                                       |  | Net credit/(charge)
|                                                                       |  |                    
|                                                                       |  | Pre-tax             |        | Tax |  | After tax
|                                                                       |  |                     |        |     |  |          
|Currency translation differences                                       |  |                     | (1,540 | )   |  |           | (22 | ) |  |  | (1,562 | )
|Reclassifications                                                      |  |                     | (127   | )   |  |           |    |   |  |  | (127   | )
|                                                                       |  |                     |        |     |  |           |     |   |  |  |        |  
|Currency translation differences
net of reclassifications              |  |                     | (1,667 | )   |  |           | (22 | ) |  |  | (1,689 | )
|                                                                       |  |                     |        |     |  |           |     |   |  |  |        |  
|Unrealised gains/(losses) on securities                                |  |                     | (114   | )   |  |           | (9  | ) |  |  | (123   | )
|Reclassifications                                                      |  |                     | (32    | )   |  |           | 12  |   |  |  | (20    | )
|                                                                       |  |                     |        |     |  |           |     |   |  |  |        |  
|Unrealised gains/(losses) on securities
net of reclassifications       |  |                     | (146   | )   |  |           | 3   |   |  |  | (143   | )
|                                                                       |  |                     |        |     |  |           |     |   |  |  |        |  
|Unrealised gains/(losses) on cash flow hedges                          |  |                     | (1     | )   |  |           | (13 | ) |  |  | (14    | )
|Reclassifications                                                      |  |                     |       |     |  |           |    |   |  |  |       |  
|                                                                       |  |                     |        |     |  |           |     |   |  |  |        |  
|Unrealised gains/(losses) on cash flow hedges
net of reclassifications |  |                     | (1     | )   |  |           | (13 | ) |  |  | (14    | )
|                                                                       |  |                     |        |     |  |           |     |   |  |  |        |  
|Minimum pension liability adjustments                                  |  |                     | (209   | )   |  |           | 82  |   |  |  | (127   | )
|                                                                       |  |                     |        |     |  |           |     |   |  |  |        |  
|Other comprehensive income                                             |  |                     | (2,023 | )   |  |           | 50  |   |  |  | (1,973 | )
|                                                                       |  |                     |        |     |  |           |     |   |  |  |        |  

|                                                                 |  |                     |        |     |  |           |     |   |  |  |        |  
|---------------------------------------------------------------- |  | ------------------- | ------ | --- |  | --------- | --- | - |  |  | ------ | -
|2000                                                             |  | $ million          
|                                                                 |  |                    
|                                                                 |  | Net credit/(charge)
|                                                                 |  |                    
|                                                                 |  | Pre-tax             |        | Tax |  | After tax
|                                                                 |  |                     |        |     |  |          
|Currency translation differences                                 |  |                     | (2,677 | )   |  |           | (51 | ) |  |  | (2,728 | )
|Reclassifications                                                |  |                     | 11     |     |  |           |    |   |  |  | 11     |  
|                                                                 |  |                     |        |     |  |           |     |   |  |  |        |  
|Currency translation differences
net of reclassifications        |  |                     | (2,666 | )   |  |           | (51 | ) |  |  | (2,717 | )
|                                                                 |  |                     |        |     |  |           |     |   |  |  |        |  
|Unrealised gains/(losses) on securities                          |  |                     | (205   | )   |  |           | 8   |   |  |  | (197   | )
|Reclassifications                                                |  |                     | (50    | )   |  |           | 9   |   |  |  | (41    | )
|                                                                 |  |                     |        |     |  |           |     |   |  |  |        |  
|Unrealised gains/(losses) on securities
net of reclassifications |  |                     | (255   | )   |  |           | 17  |   |  |  | (238   | )
|                                                                 |  |                     |        |     |  |           |     |   |  |  |        |  
|Minimum pension liability adjustments                            |  |                     | (115   | )   |  |           | 45  |   |  |  | (70    | )
|                                                                 |  |                     |        |     |  |           |     |   |  |  |        |  
|Other comprehensive income                                       |  |                     | (3,036 | )   |  |           | 11  |   |  |  | (3,025 | )
|                                                                 |  |                     |        |     |  |           |     |   |  |  |        |  

G10   Royal Dutch/Shell Group of Companies



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##### Table of Contents



6 Associated companies

(a)  Income

Associated companies engage in similar businesses to Group companies and play
an important part in the overall operating activities of the Group.
Consequently, the Group share of operating profits arising from associated
companies is seen as a contribution to the total Group operating profit and is
shown as such in the Statement of Income. The Group share of interest income,
interest expense, currency exchange gains/losses and taxation of associated
companies has been included within those items in the Statement of Income.

A summarised Statement of Income with respect to the Group share of net income
from associated companies, together with a segment analysis, is set out below:

|                                 |  |           |        |      |  |      |        |   |  |  |        | 
|-------------------------------- |  | --------- | ------ | ---- |  | ---- | ------ | - |  |  | ------ | 
|                                 |  | $ million
|                                 |  |          
|                                 |  | 2002      |        | 2001 |  | 2000
|                                 |  |           |        |      |  |     
|Net proceeds                     |  |           | 33,522 |      |  |      | 55,767 |   |  |  | 60,896 | 
|Cost of sales                    |  |           | 26,936 |      |  |      | 47,143 |   |  |  | 51,692 | 
|                                 |  |           |        |      |  |      |        |   |  |  |        | 
|Gross profit                     |  |           | 6,586  |      |  |      | 8,624  |   |  |  | 9,204  | 
|Other operating expenses         |  |           | 3,962  |      |  |      | 5,583  |   |  |  | 5,345  | 
|                                 |  |           |        |      |  |      |        |   |  |  |        | 
|Operating profit                 |  |           | 2,624  |      |  |      | 3,041  |   |  |  | 3,859  | 
|Interest and other income        |  |           | 102    |      |  |      | 98     |   |  |  | 111    | 
|Interest expense                 |  |           | 451    |      |  |      | 503    |   |  |  | 498    | 
|Currency exchange gains/(losses) |  |           | (15    | )    |  |      | (20    | ) |  |  | 7      | 
|                                 |  |           |        |      |  |      |        |   |  |  |        | 
|Income before taxation           |  |           | 2,260  |      |  |      | 2,616  |   |  |  | 3,479  | 
|Taxation                         |  |           | 1,002  |      |  |      | 1,081  |   |  |  | 1,515  | 
|                                 |  |           |        |      |  |      |        |   |  |  |        | 
|Net income                       |  |           | 1,258  |      |  |      | 1,535  |   |  |  | 1,964  | 
|                                 |  |           |        |      |  |      |        |   |  |  |        | 

|                           |  |           |       |      |  |      |       |   |  |  |       |  
|-------------------------- |  | --------- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|Income by segment          |  | $ million
|                           |  |          
|                           |  | 2002      |       | 2001 |  | 2000
|                           |  |           |       |      |  |     
|Exploration and Production |  |           | 543   |      |  |      | 745   |   |  |  | 990   |  
|Gas & Power                |  |           | 589   |      |  |      | 746   |   |  |  | 505   |  
|Oil Products               |  |           | 250   |      |  |      | 456   |   |  |  | 650   |  
|Chemicals                  |  |           | 153   |      |  |      | (26   | ) |  |  | 174   |  
|Corporate and Other        |  |           | (277  | )    |  |      | (386  | ) |  |  | (355  | )
|                           |  |           |       |      |  |      |       |   |  |  |       |  
|                           |  |           | 1,258 |      |  |      | 1,535 |   |  |  | 1,964 |  
|                           |  |           |       |      |  |      |       |   |  |  |       |  

(b) Investments

|                                                                        |  |           |        |       |  |       |       |       |  |      |        |      |  |  |        |  
|----------------------------------------------------------------------- |  | --------- | ------ | ----- |  | ----- | ----- | ----- |  | ---- | ------ | ---- |  |  | ------ | -
|                                                                        |  | $ million
|                                                                        |  |          
|                                                                        |  |           |        |       |  |       |       |       |  | 2002 |        | 2001
|                                                                        |  |           |        |       |  |       |       |       |  |      |        |     
|                                                                        |  | Shares    |        | Loans |  | Total |       | Total
|                                                                        |  |           |        |       |  |       |       |      
|At January 1                                                            |  |           | 15,721 |       |  |       | 2,297 |       |  |      | 18,018 |      |  |  | 18,648 |  
|New investments                                                         |  |           | 684    |       |  |       | 605   |       |  |      | 1,289  |      |  |  | 1,074  |  
|Net asset transfers to/(from)
associates, disposals and
other movements |  |           | (1,842 | )     |  |       | (382  | )     |  |      | (2,224 | )    |  |  | (1,031 | )
|Net income                                                              |  |           | 1,258  |       |  |       |      |       |  |      | 1,258  |      |  |  | 1,535  |  
|Dividends                                                               |  |           | (1,571 | )     |  |       |      |       |  |      | (1,571 | )    |  |  | (1,800 | )
|Currency translation differences                                        |  |           | 743    |       |  |       | 108   |       |  |      | 851    |      |  |  | (408   | )
|                                                                        |  |           |        |       |  |       |       |       |  |      |        |      |  |  |        |  
|At December 31                                                          |  |           | 14,993 |       |  |       | 2,628 |       |  |      | 17,621 |      |  |  | 18,018 |  
|                                                                        |  |           |        |       |  |       |       |       |  |      |        |      |  |  |        |  

In 2002, the net asset transfers to/from associates, disposals and other
movements mainly comprise the effects of the reclassification of Equilon from
an associate to a Group company consequent on the acquisition of the
outstanding 44% interest. The amount in 2001 mainly relates to the effects of
the reclassification of Sakhalin Energy from an associate to a Group company
and repayments of loans.

Net income for 2002 includes $150 million write-down in the carrying amount of
InterGen (Gas & Power).

Royal Dutch/Shell Group of Companies   G11



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A summarised Statement of Assets and Liabilities with respect to the Group
share of investments in associated companies is set out below:

|                      |  |           |        |      |  |  |        | 
|--------------------- |  | --------- | ------ | ---- |  |  | ------ | 
|                      |  | $ million
|                      |  |          
|                      |  | 2002      |        | 2001
|                      |  |           |        |     
|Fixed assets          |  |           | 27,611 |      |  |  | 26,171 | 
|Current assets        |  |           | 6,704  |      |  |  | 7,529  | 
|                      |  |           |        |      |  |  |        | 
|Total assets          |  |           | 34,315 |      |  |  | 33,700 | 
|Current liabilities   |  |           | 7,107  |      |  |  | 8,588  | 
|Long-term liabilities |  |           | 9,587  |      |  |  | 7,094  | 
|                      |  |           |        |      |  |  |        | 
|Net assets            |  |           | 17,621 |      |  |  | 18,018 | 
|                      |  |           |        |      |  |  |        | 

An analysis by segment is shown in Note 24.

The Groups major investments in associated companies at December 31, 2002
comprised:

|                           |  |                |  |                
|-------------------------- |  | -------------- |  | ---------------
|                           |  |                |  | Country of     
|Segment Name               |  | Group interest |  | incorporation  
|                           |  |                |  |                
|Exploration and Production |  |                |  |                
|Aera                       |  | 52%            |  | USA            
|Brunei Shell               |  | 50%            |  | Brunei         
|Woodside                   |  | 34%            |  | Australia      
|Gas & Power                |  |                |  |                
|InterGen                   |  | 68%            |  | The Netherlands
|Nigeria LNG                |  | 26%            |  | Nigeria        
|Oil Products               |  |                |  |                
|Motiva                     |  | 50%            |  | USA            
|Showa Shell                |  | 50%            |  | Japan          
|Chemicals                  |  |                |  |                
|Basell                     |  | 50%            |  | The Netherlands
|Saudi Petrochemical        |  | 50%            |  | Saudi Arabia   

(c) Transactions between Group companies and associated companies

Transactions between Group and associated companies mainly comprise sales and
purchases of goods and services in the ordinary course of business and in total
amounted to:

|                                  |  |           |        |      |  |      |        |  |  |  |        | 
|--------------------------------- |  | --------- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                                  |  | $ million
|                                  |  |          
|                                  |  | 2002      |        | 2001 |  | 2000
|                                  |  |           |        |      |  |     
|Charges to associated companies   |  |           | 10,573 |      |  |      | 13,415 |  |  |  | 15,590 | 
|Charges from associated companies |  |           | 5,623  |      |  |      | 5,053  |  |  |  | 5,792  | 
|                                  |  |           |        |      |  |      |        |  |  |  |        | 

Balances outstanding at December 31, 2002 and 2001 in respect of the above
transactions are shown in Notes 13 and 17.

G12   Royal Dutch/Shell Group of Companies



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##### Table of Contents



7 Interest and other income

|                     |                 |  |           |     |      |  |       |     |  |  |     |     | 
|-------------------- | --------------- |  | --------- | --- | ---- |  | ----- | --- |  |  | --- | --- | 
|                     |                 |  | $ million
|                     |                 |  |          
|                     |                 |  | 2002      |     | 2001 |  | 2000 
|                     |                 |  |           |     |      |  |      
|Group companies      |                 |  |           |     |      |  |       |     |  |  |     |    
|                     | Interest income |  |           | 491 |      |  |       | 784 |  |  |     | 627 | 
|                     | Other income    |  |           | 165 |      |  |       | 177 |  |  |     | 236 | 
|                     |                 |  |           |     |      |  |       |     |  |  |     |     | 
|                     |                 |  | 656       |     |      |  | 961   |     |  |  | 863 |    
|Associated companies |                 |  | 102       |     |      |  | 98    |     |  |  | 111 |    
|                     |                 |  |           |     |      |  |       |     |  |  |     |     | 
|                     |                 |  | 758       |     |      |  | 1,059 |     |  |  | 974 |    
|                     |                 |  |           |     |      |  |       |     |  |  |     |     | 

8 Interest expense

|                     |                          |  |           |     |      |  |       |     |  |  |       |     | 
|-------------------- | ------------------------ |  | --------- | --- | ---- |  | ----- | --- |  |  | ----- | --- | 
|                     |                          |  | $ million
|                     |                          |  |          
|                     |                          |  | 2002      |     | 2001 |  | 2000 
|                     |                          |  |           |     |      |  |      
|Group companies      |                          |  |           |     |      |  |       |     |  |  |       |    
|                     | Interest incurred        |  |           | 956 |      |  |       | 662 |  |  |       | 877 | 
|                     | lessinterest capitalised |  |           | 43  |      |  |       | 32  |  |  |       | 51  | 
|                     |                          |  |           |     |      |  |       |     |  |  |       |     | 
|                     |                          |  | 913       |     |      |  | 630   |     |  |  | 826   |    
|Associated companies |                          |  | 451       |     |      |  | 503   |     |  |  | 498   |    
|                     |                          |  |           |     |      |  |       |     |  |  |       |     | 
|                     |                          |  | 1,364     |     |      |  | 1,133 |     |  |  | 1,324 |    
|                     |                          |  |           |     |      |  |       |     |  |  |       |     | 

9 Taxation

(a)  Taxation charge for the year

|                                   |                              |  |           |      |      |  |       |      |   |  |        |     | 
|---------------------------------- | ---------------------------- |  | --------- | ---- | ---- |  | ----- | ---- | - |  | ------ | --- | 
|                                   |                              |  | $ million
|                                   |                              |  |          
|                                   |                              |  | 2002      |      | 2001 |  | 2000 
|                                   |                              |  |           |      |      |  |      
|Group companies
Current tax charge |                              |  | 6,752     |      |      |  | 7,722 |      |   |  | 9,251  |    
|                                   | Deferred tax charge/(credit) |  |           | (137 | )    |  |       | (109 | ) |  |        | 507 | 
|                                   |                              |  |           |      |      |  |       |      |   |  |        |    
|                                   |                              |  | 6,615     |      |      |  | 7,613 |      |   |  | 9,758  |    
|Associated companies               |                              |  | 1,002     |      |      |  | 1,081 |      |   |  | 1,515  |    
|                                   |                              |  |           |      |      |  |       |      |   |  |        |    
|                                   |                              |  | 7,617     |      |      |  | 8,694 |      |   |  | 11,273 |    
|                                   |                              |  |           |      |      |  |       |      |   |  |        |    

Reconciliations of the expected tax charge of Group companies to the actual tax
charge are as follows:

|                                       |  |           |       |      |  |      |       |   |  |  |       |  
|-------------------------------------- |  | --------- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|                                       |  | $ million
|                                       |  |          
|                                       |  | 2002      |       | 2001 |  | 2000
|                                       |  |           |       |      |  |     
|Expected tax charge at statutory rates |  |           | 6,467 |      |  |      | 7,734 |   |  |  | 9,763 |  
|Adjustments of valuation allowance     |  |           | (30   | )    |  |      | (70   | ) |  |  | (261  | )
|Adjustments in respect of prior years  |  |           | (251  | )    |  |      | (258  | ) |  |  | (89   | )
|Other items                            |  |           | 429   |      |  |      | 207   |   |  |  | 345   |  
|                                       |  |           |       |      |  |      |       |   |  |  |       |  
|Taxation charge of Group companies     |  |           | 6,615 |      |  |      | 7,613 |   |  |  | 9,758 |  
|                                       |  |           |       |      |  |      |       |   |  |  |       |  

The taxation charge of Group companies includes not only income taxes of
general application but also income taxes at special rates levied on income
from exploration and production activities and various additional income and
other taxes to which these activities are subject.

Royal Dutch/Shell Group of Companies   G13



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(b) Taxes payable

|                                                                   |  |           |       |      |  |  |       | 
|------------------------------------------------------------------ |  | --------- | ----- | ---- |  |  | ----- | 
|                                                                   |  | $ million
|                                                                   |  |          
|                                                                   |  | 2002      |       | 2001
|                                                                   |  |           |       |     
|Taxes on activities of Group companies                             |  |           | 2,013 |      |  |  | 2,220 | 
|Sales taxes, excise duties and similar
levies and social law taxes |  |           | 2,997 |      |  |  | 2,274 | 
|                                                                   |  |           |       |      |  |  |       | 
|                                                                   |  |           | 5,010 |      |  |  | 4,494 | 
|                                                                   |  |           |       |      |  |  |       | 

(c) Provision for deferred taxation

The provision for deferred taxation comprises the following tax effects of
temporary differences:

|                                     |                                       |  |           |        |      |  |        |        |  
|------------------------------------ | ------------------------------------- |  | --------- | ------ | ---- |  | ------ | ------ | -
|                                     |                                       |  | $ million
|                                     |                                       |  |          
|                                     |                                       |  | 2002      |        | 2001
|                                     |                                       |  |           |        |     
|Tangible and intangible fixed assets |                                       |  | 16,612    |        |      |  | 9,080  |       
|Other items                          |                                       |  | 3,504     |        |      |  | 3,169  |       
|                                     |                                       |  |           |        |      |  |        |       
|Total deferred tax liabilities       |                                       |  | 20,116    |        |      |  | 12,249 |       
|                                     |                                       |  |           |        |      |  |        |       
|Tax losses carried forward           |                                       |  | (2,171    | )      |      |  | (1,642 | )     
|Provisions                           |                                       |  |           |        |      |  |        |       
|                                     | Pensions and similar obligations      |  |           | (1,293 | )    |  |        | (671   | )
|                                     | Decommissioning and restoration costs |  |           | (1,700 | )    |  |        | (1,162 | )
|                                     | Environmental and other provisions    |  |           | (445   | )    |  |        | (322   | )
|Other items                          |                                       |  | (4,510    | )      |      |  | (2,936 | )     
|                                     |                                       |  |           |        |      |  |        |       
|Total deferred tax assets            |                                       |  | (10,119   | )      |      |  | (6,733 | )     
|Asset valuation allowance            |                                       |  | 2,474     |        |      |  | 1,630  |       
|                                     |                                       |  |           |        |      |  |        |       
|Net deferred tax assets              |                                       |  | (7,645    | )      |      |  | (5,103 | )     
|                                     |                                       |  |           |        |      |  |        |       
|Net deferred tax liability           |                                       |  | 12,471    |        |      |  | 7,146  |       
|                                     |                                       |  |           |        |      |  |        |       

The increase in temporary differences for tangible and intangible fixed assets
includes the deferred tax assumed on acquisition of Enterprise Oil (see Note
19).

The Group has tax losses carried forward amounting to $6,687 million at
December 31, 2002. Of these, $5,108 million can be carried forward
indefinitely. The remaining $1,579 million expires in the following years:

|          |  |           |     | 
|--------- |  | --------- | --- | 
|          |  | $ million
|          |  |          
|2003      |  |           | 97  | 
|2004      |  |           | 160 | 
|2005      |  |           | 342 | 
|2006      |  |           | 142 | 
|20072011 |  |           | 65  | 
|20122017 |  |           | 773 | 
|          |  |           |     | 

G14   Royal Dutch/Shell Group of Companies



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##### Table of Contents



10 Tangible and intangible fixed assets

|                                                                                                                             |      |  |           |        |            |  |        |     |       |  |         |   |       |  |         |        | 
|---------------------------------------------------------------------------------------------------------------------------- | ---- |  | --------- | ------ | ---------- |  | ------ | --- | ----- |  | ------- | - | ----- |  | ------- | ------ | 
|                                                                                                                             |      |  | $ million
|                                                                                                                             |      |  |          
|                                                                                                                             |      |  |           |        |            |  |        |     |       |  | 2002    |   | 2001 
|                                                                                                                             |      |  |           |        |            |  |        |     |       |  | Total   |   | Total
|                                                                                                                             |      |  | Tangible  |        | Intangible |  | Group  |     | Group
|                                                                                                                             |      |  |           |        |            |  |        |     |      
|Cost                                                                                                                         |      |  |           |        |            |  |        |     |       |  |         |   |       |  |         |       
|At January 1                                                                                                                 |      |  | 117,769   |        |            |  | 2,414  |     |       |  | 120,183 |   |       |  | 114,093 |       
|Capital expenditure                                                                                                          |      |  | 11,837    |        |            |  | 347    |     |       |  | 12,184  |   |       |  | 9,626   |       
|Assets assumed on acquisitions
(Enterprise Oil, Pennzoil-Quaker
State and DEA and additional
shares in Equilon), see Note 19 |      |  | 20,178    |        |            |  | 3,107  |     |       |  | 23,285  |   |       |  |         |       
|Sales, retirements
and other movements                                                                                       |      |  | (1,735    | )      |            |  | 440    |     |       |  | (1,295  | ) |       |  | (592    | )     
|Currency translation differences                                                                                             |      |  | 9,770     |        |            |  | 150    |     |       |  | 9,920   |   |       |  | (2,944  | )     
|                                                                                                                             |      |  |           |        |            |  |        |     |       |  |         |   |       |  |         |       
|At December 31                                                                                                               |      |  | 157,819   |        |            |  | 6,458  |     |       |  | 164,277 |   |       |  | 120,183 |       
|                                                                                                                             |      |  |           |        |            |  |        |     |       |  |         |   |       |  |         |       
|Depreciation                                                                                                                 |      |  |           |        |            |  |        |     |       |  |         |   |       |  |         |       
|At January 1                                                                                                                 |      |  | 66,399    |        |            |  | 1,475  |     |       |  | 67,874  |   |       |  | 65,774  |       
|Depreciation, depletion and
amortisation charge                                                                              |      |  | 8,249     |        |            |  | 205    |     |       |  | 8,454   |   |       |  | 6,117   |       
|Sales, retirements and
other movements                                                                                       |      |  | (1,539    | )      |            |  | 15     |     |       |  | (1,524  | ) |       |  | (2,295  | )     
|Currency translation differences                                                                                             |      |  | 5,320     |        |            |  | 67     |     |       |  | 5,387   |   |       |  | (1,722  | )     
|                                                                                                                             |      |  |           |        |            |  |        |     |       |  |         |   |       |  |         |       
|At December 31                                                                                                               |      |  | 78,429    |        |            |  | 1,762  |     |       |  | 80,191  |   |       |  | 67,874  |       
|                                                                                                                             |      |  |           |        |            |  |        |     |       |  |         |   |       |  |         |       
|Net 2002                                                                                                                     |      |  | 79,390    |        |            |  | 4,696a |     |       |  | 84,086  |   |       |  |         |       
|                                                                                                                             |      |  |           |        |            |  |        |     |       |  |         |   |       |  |         |       
|                                                                                                                             | 2001 |  |           | 51,370 |            |  |        | 939 | a     |  |         |   |       |  |         | 52,309 | 
|                                                                                                                             |      |  |           |        |            |  |        |     |       |  |         |   |       |  |         |       



---

| |  | a Includes goodwill of $2.3 billion at December
31, 2002 (2001: $0.4 billion) of which $1.8
billion resulted from the Oil Products
acquisitions.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------

Capital expenditure, together with acquisitions and new investments in
associated companies, and the depreciation, depletion and amortisation charge
are shown in Note 24, classified, consistent with oil and gas industry
practice, according to operating activities. Such a classification, rather than
one according to type of asset, is given in order to permit a better comparison
with other companies having similar activities.

The net balances at December 31 include:

|                                                                  |                                                                                    |  |           |       |      |  |       |       | 
|----------------------------------------------------------------- | ---------------------------------------------------------------------------------- |  | --------- | ----- | ---- |  | ----- | ----- | 
|                                                                  |                                                                                    |  | $ million
|                                                                  |                                                                                    |  |          
|                                                                  |                                                                                    |  | 2002      |       | 2001
|                                                                  |                                                                                    |  |           |       |     
|Capitalised costs in respect of assets not yet used
in operations |                                                                                    |  |           |       |      |  |       |      
|                                                                  | Unproved properties                                                                |  |           | 4,239 |      |  |       | 2,319 | 
|                                                                  | Proved properties under development and
other assets in the course of construction |  |           | 7,421 |      |  |       | 6,066 | 
|                                                                  |                                                                                    |  |           |       |      |  |       |       | 
|                                                                  |                                                                                    |  | 11,660    |       |      |  | 8,385 |      
|                                                                  |                                                                                    |  |           |       |      |  |       |       | 

Depreciation, depletion and amortisation charges for the year in the table
above are included within the following expense headings in the Statement of
Income:

|                                  |  |           |       |      |  |      |       |  |  |  |       | 
|--------------------------------- |  | --------- | ----- | ---- |  | ---- | ----- |  |  |  | ----- | 
|                                  |  | $ million
|                                  |  |          
|                                  |  | 2002      |       | 2001 |  | 2000
|                                  |  |           |       |      |  |     
|Cost of sales                     |  |           | 7,184 |      |  |      | 4,987 |  |  |  | 6,689 | 
|Selling and distribution expenses |  |           | 1,095 |      |  |      | 1,007 |  |  |  | 1,087 | 
|Administrative expenses           |  |           | 62    |      |  |      | 53    |  |  |  | 57    | 
|Exploration                       |  |           | 80    |      |  |      | 42    |  |  |  | 10    | 
|Research and development          |  |           | 33    |      |  |      | 28    |  |  |  | 42    | 
|                                  |  |           |       |      |  |      |       |  |  |  |       | 
|                                  |  |           | 8,454 |      |  |      | 6,117 |  |  |  | 7,885 | 
|                                  |  |           |       |      |  |      |       |  |  |  |       | 

Royal Dutch/Shell Group of Companies   G15



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##### Table of Contents



Depreciation, depletion and amortisation charges for 2002 include $191 million
(2001: $88 million; 2000: $1,345 million) relating to the impairment of
tangible fixed assets, and $6 million (2001: nil; 2000: $440 million) relating
to the impairment of intangible fixed assets. Such charges are recorded within
cost of sales. The application of accounting principles generally accepted in
the Netherlands would require amortisation of goodwill. If this accounting
treatment were to be applied, the Groups net income in 2002 would be reduced
by $120 million. The impairment charges relate to assets held for use (2002:
$105 million; 2001: nil; 2000: $1,433 million) and to assets held for sale
(2002: $92 million; 2001: $88 million; 2000: $352 million). For 2000 the
impairments mainly related to Oil Products resulting from a downward revision
in the long-term expectation for certain refinery margins, and to Gas & Power
resulting from restructuring of the business in the USA.

Intangible fixed assets include $1.1 billion in respect of Pennzoil and Quaker
State trademarks acquired. These are being amortised over an estimated useful
life of forty years. Continued brand maintenance in addition to the established
long-term leadership of these brands in automotive lubricants and vehicle care
markets support this estimate.

Net fixed assets at December 31, 2002 include assets held for sale totalling
$0.2 billion (2001: $0.8 billion), consisting primarily of assets in Chemicals
and Other industry segments. It is expected that the sales of these assets will
occur in 2003. Operating losses included in the Statement of Income relating to
these assets totalled $37 million in 2002 (2001: $49 million; 2000: $33
million).

11 Other long-term assets

Reflecting their non-current nature, deferred charges and prepayments due after
one year and other non-current assets are presented separately as Other
long-term assets. At December 31, 2002 these include $6,732 million (2001:
$6,487 million) of deferred charges and prepayments (including amounts in
respect of risk management activities), of which $4,506 million (2001: $4,714
million) relates to prepaid pension costs.

12 Inventories

|                                 |  |           |        |      |  |  |       | 
|-------------------------------- |  | --------- | ------ | ---- |  |  | ----- | 
|                                 |  | $ million
|                                 |  |          
|                                 |  | 2002      |        | 2001
|                                 |  |           |        |     
|Inventories of oil and chemicals |  |           | 9,383  |      |  |  | 5,704 | 
|Inventories of materials         |  |           | 915    |      |  |  | 637   | 
|                                 |  |           |        |      |  |  |       | 
|                                 |  |           | 10,298 |      |  |  | 6,341 | 
|                                 |  |           |        |      |  |  |       | 

Of the total inventories, $1,529 million at December 31, 2002 (2001: $730
million) wholly in North America are valued by the LIFO method. The excess of
FIFO cost over the carrying amount of such LIFO inventories was $955 million
(2001: $193 million). The movement in 2002 is partly attributable to
acquisitions during the year.

13 Accounts receivable

|                                     |  |           |        |      |  |  |        | 
|------------------------------------ |  | --------- | ------ | ---- |  |  | ------ | 
|                                     |  | $ million
|                                     |  |          
|                                     |  | 2002      |        | 2001
|                                     |  |           |        |     
|Trade receivables                    |  |           | 15,475 |      |  |  | 9,824  | 
|Amounts owed by associated companies |  |           | 4,834  |      |  |  | 1,875  | 
|Other receivables                    |  |           | 3,453  |      |  |  | 2,692  | 
|Deferred charges and prepayments     |  |           | 4,925  |      |  |  | 3,076  | 
|                                     |  |           |        |      |  |  |        | 
|                                     |  |           | 28,687 |      |  |  | 17,467 | 
|                                     |  |           |        |      |  |  |        | 

Provisions for doubtful items deducted from accounts receivable amounted to
$415 million at December 31, 2002 (2001: $312 million). Deferred charges and
prepayments include amounts in respect of risk management activities.

G16   Royal Dutch/Shell Group of Companies



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14 Investments  securities and short-term securities

(a)  Investments  securities

Investments  securities mainly comprises a portfolio of equity and debt
securities required to be held long-term by the Group insurance companies as
security for their insurance activities. These securities are classified as
available for sale. Of these, $689 million at December 31, 2002 (2001: $590
million) are debt securities. The maturities of $362 million of these are
between two and five years, and those of $312 million exceed five years.

(b)  Short-term securities (including those classified as cash equivalents)

The total carrying amount of short-term securities, including those classified
as cash equivalents, is $49 million at December 31, 2002 (2001: $2,233
million). Of these, none is of a trading nature (2001: $2,177 million). The
remainder are debt securities which are classified as available for sale.

Short-term securities at December 31, 2002 amounting to $4 million (2001: $189
million) are listed on recognised stock exchanges.

15 Debt

(a) Short-term debt

|                                                                                                  |  |           |        |      |  |  |       | 
|------------------------------------------------------------------------------------------------- |  | --------- | ------ | ---- |  |  | ----- | 
|                                                                                                  |  | $ million
|                                                                                                  |  |          
|                                                                                                  |  | 2002      |        | 2001
|                                                                                                  |  |           |        |     
|Debentures and other loans                                                                        |  |           | 9,963  |      |  |  | 1,636 | 
|Amounts due to banks and other credit institutions
(including long-term debt due within one year) |  |           | 2,846  |      |  |  | 2,344 | 
|                                                                                                  |  |           |        |      |  |  |       | 
|                                                                                                  |  |           | 12,809 |      |  |  | 3,980 | 
|Capitalised lease obligations                                                                     |  |           | 65     |      |  |  | 8     | 
|                                                                                                  |  |           |        |      |  |  |       | 
|Short-term debt                                                                                   |  |           | 12,874 |      |  |  | 3,988 | 
|lesslong-term debt due within one year                                                            |  |           | 2,253  |      |  |  | 1,682 | 
|                                                                                                  |  |           |        |      |  |  |       | 
|Short-term debt excluding
long-term debt due within one year                                      |  |           | 10,621 |      |  |  | 2,306 | 
|                                                                                                  |  |           |        |      |  |  |       | 

In 2001, $1.3 billion of non-recourse debt owed by a company (Group interest
64%) was reclassified as short-term debt when a debt covenant (the interest
cover ratio) was breached. This covenant breach is continuing and the company
has defaulted on $115 million of scheduled principal payments in 2002.

The following relates only to short-term debt excluding long-term debt due
within one year:

|                                                     |                                   |  |           |   |      |  |       |    |  
|---------------------------------------------------- | --------------------------------- |  | --------- | - | ---- |  | ----- | -- | -
|                                                     |                                   |  | $ million
|                                                     |                                   |  |          
|                                                     |                                   |  | 2002      |   | 2001
|Maximum amount outstanding
at the end of any quarter |                                   |  | 13,098    |   |      |  | 2,306 |   
|Average amount outstanding                           |                                   |  | 8,153     |   |      |  | 1,859 |   
|Amounts due to banks and other credit institutions   |                                   |  | 2,378     |   |      |  | 2,039 |   
|Unused lines of short-term credit                    |                                   |  | 3,625     |   |      |  | 3,679 |   
|Approximate average interest rate on:                |                                   |  |           |   |      |  |       |   
|                                                     | average amount outstanding        |  |           | 3 | %    |  |       | 11 | %
|                                                     | amount outstanding at December 31 |  |           | 3 | %    |  |       | 9  | %
|                                                     |                                   |  |           |   |      |  |       |   

The amount outstanding at December 31, 2002 includes $6,908 million of fixed
rate and $1,364 million of variable rate dollar debt at an average interest
rate of 2% and 3% respectively.

Royal Dutch/Shell Group of Companies   G17



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##### Table of Contents



(b) Long-term debt

|                                                            |  |           |       |      |  |  |       | 
|----------------------------------------------------------- |  | --------- | ----- | ---- |  |  | ----- | 
|                                                            |  | $ million
|                                                            |  |          
|                                                            |  | 2002      |       | 2001
|                                                            |  |           |       |     
|Debentures and other loans                                  |  |           | 5,523 |      |  |  | 937   | 
|Amounts due to banks and other credit institutions          |  |           | 794   |      |  |  | 667   | 
|                                                            |  |           |       |      |  |  |       | 
|                                                            |  |           | 6,317 |      |  |  | 1,604 | 
|Capitalised lease obligations                               |  |           | 500   |      |  |  | 228   | 
|                                                            |  |           |       |      |  |  |       | 
|Long-term debt                                              |  |           | 6,817 |      |  |  | 1,832 | 
|addlong-term debt due within one year                       |  |           | 2,253 |      |  |  | 1,682 | 
|                                                            |  |           |       |      |  |  |       | 
|Long-term debt including
long-term debt due within one year |  |           | 9,070 |      |  |  | 3,514 | 
|                                                            |  |           |       |      |  |  |       | 

The following relates to long-term debt including the short-term part but
excluding capitalised lease obligations.

Long-term debt denominated in dollars amounted to $5,165 million at December
31, 2002 (2001: $2,904 million). The majority of the amount at December 31,
2002 is fixed rate debt with an average interest rate of 4%; non-dollar
denominated debt comprised mainly fixed rate debt at an average interest rate
of 4%. The approximate weighted average interest rate in 2002 was 2% for dollar
debt and 3% for total debt.

The aggregate maturities of long-term debts are:

|               |  |           |       | 
|-------------- |  | --------- | ----- | 
|               |  | $ million
|               |  |          
|2003           |  |           | 2,188 | 
|2004           |  |           | 1,190 | 
|2005           |  |           | 926   | 
|2006           |  |           | 1,268 | 
|2007           |  |           | 2,153 | 
|2008 and after |  |           | 780   | 
|               |  |           |       | 

During 2002, the Medium Term Note and Commercial Paper Facilities have been
increased to a total level of $26.0 billion. As at December 31, 2002, debt
outstanding under central borrowing programmes, which includes these
facilities, totalled $13.9 billion with the remaining indebtedness raised by
Group companies with no recourse beyond the immediate borrower and/or the local
assets.

In accordance with the risk management policy, Group companies have entered
into interest rate swap agreements against most of the fixed rate debt. The use
of interest rate swaps is further discussed in Note 28 on page G33.

An asset-backed commercial paper programme has been in place since 2001. As at
December 31, 2002, $1.0 billion (2001: $0.9 billion) of commercial paper was
outstanding, secured mainly on Group originated assets. Neither the originated
assets nor the commercial paper obligation are included in the Groups
Statement of Assets and Liabilities.

G18   Royal Dutch/Shell Group of Companies



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16 Commitments

(a)  Leasing arrangements

The future minimum lease payments under operating leases and capital leases,
and the present value of net minimum capital lease payments at December 31,
2002 are as follows:

|                                                    |  |           |       |         |  |  |     | 
|--------------------------------------------------- |  | --------- | ----- | ------- |  |  | --- | 
|                                                    |  | $ million
|                                                    |  |          
|                                                    |  | Operating |       | Capital
|                                                    |  | leases    |       | leases 
|                                                    |  |           |       |        
|2003                                                |  |           | 1,906 |         |  |  | 91  | 
|2004                                                |  |           | 1,192 |         |  |  | 52  | 
|2005                                                |  |           | 806   |         |  |  | 51  | 
|2006                                                |  |           | 647   |         |  |  | 49  | 
|2007                                                |  |           | 512   |         |  |  | 56  | 
|2008 and after                                      |  |           | 3,553 |         |  |  | 495 | 
|                                                    |  |           |       |         |  |  |     | 
|Total minimum payments                              |  |           | 8,616 |         |  |  | 794 | 
|                                                    |  |           |       |         |  |  |     | 
|lessexecutory costs and interest                    |  |           |       |         |  |  | 229 | 
|                                                    |  |           |       |         |  |  |     | 
|Present value of net minimum capital lease payments |  |           |       |         |  |  | 565 | 
|                                                    |  |           |       |         |  |  |     | 

The figures above for operating lease payments represent minimum commitments
existing at December 31, 2002 and are not a forecast of future total rental
expense.

Total rental expense for all operating leases was as follows:

|                   |  |           |       |      |  |      |       |   |  |  |       |  
|------------------ |  | --------- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|                   |  | $ million
|                   |  |          
|                   |  | 2002      |       | 2001 |  | 2000
|                   |  |           |       |      |  |     
|Minimum rentals    |  |           | 1,557 |      |  |      | 1,377 |   |  |  | 1,197 |  
|Contingent rentals |  |           | 104   |      |  |      | 105   |   |  |  | 121   |  
|Sub-lease rentals  |  |           | (300  | )    |  |      | (174  | ) |  |  | (107  | )
|                   |  |           |       |      |  |      |       |   |  |  |       |  
|                   |  |           | 1,361 |      |  |      | 1,308 |   |  |  | 1,211 |  
|                   |  |           |       |      |  |      |       |   |  |  |       |  

(b)  Long-term purchase obligations

Group companies have unconditional long-term purchase obligations associated
with financing arrangements. The aggregate amount of payments required under
such obligations at December 31, 2002 is as follows:

|               |  |           |       | 
|-------------- |  | --------- | ----- | 
|               |  | $ million
|               |  |          
|2003           |  |           | 681   | 
|2004           |  |           | 590   | 
|2005           |  |           | 500   | 
|2006           |  |           | 479   | 
|2007           |  |           | 471   | 
|2008 and after |  |           | 6,417 | 
|               |  |           |       | 
|               |  |           | 9,138 | 
|               |  |           |       | 

The agreements under which these unconditional purchase obligations arise
relate mainly to the purchase of chemicals feedstock, utilities and to the use
of pipelines.

Payments under these agreements, which include additional sums depending upon
actual quantities of supplies, amounted to $441 million in 2002 (2001: $432
million).

Royal Dutch/Shell Group of Companies   G19



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##### Table of Contents



(c)  Long-term power capacity obligations

Group companies have obligations under certain power generation contracts
(tolling agreements) at December 31, 2002 amounting
to $6.9 billion (2001: $7.4 billion), of which $0.7 billion (2001: $0.7 billion) is conditional upon the
exercise of a renewal option by the owner of one of the plants. ($2.2 billion
of the amount at December 31, 2001 was conditional upon the ability of power
plant owners to secure financing.) The timing of the payments under such
obligations at December 31, 2002 is as follows:

|               |  |           |       | 
|-------------- |  | --------- | ----- | 
|               |  | $ million
|               |  |          
|2003           |  |           | 169   | 
|2004           |  |           | 308   | 
|2005           |  |           | 338   | 
|2006           |  |           | 330   | 
|2007           |  |           | 333   | 
|2008 and after |  |           | 5,392 | 
|               |  |           |       | 
|               |  |           | 6,870 | 
|               |  |           |       | 

The fair value of tolling agreements at December 31, 2002 and December 31,
2001, which are included in assets and liabilities in respect of risk
management activities (see Notes 13 and 17), and the resultant effect on net
income for 2002, 2001 and 2000, was not significant. Recognition in the
Financial Statements at fair value is in accordance with generally accepted
accounting principles in the US (US GAAP).

The application of accounting principles generally accepted in the Netherlands
would require certain tolling agreements to be treated as capital leases. If
this accounting treatment were to be applied, additional tangible fixed assets
and related long-term liabilities of approximately $3.3 billion at December 31,
2002 (2001: $2.2 billion) would be reflected in the Statement of Assets and
Liabilities and the resultant effect on the Groups net income for 2002, 2001
and 2000 would not have been significant. With respect to the conditional
amounts referred to above, up to an additional $0.3 billion (2001: $1.5
billion) would be included on satisfaction of such conditions.

There have been recent developments in US GAAP of relevance to the accounting
for tolling agreements, the direction of which is aligning US and Netherlands
GAAP. These developments include the applicability of fair value accounting
treatment and FIN 46 Consolidation of Variable Interest Entities where the
impact is being assessed. It is reasonably possible that the majority of the
tolling entities will be considered as variable interest entities of which a
Group company is the primary beneficiary; such entities would be required to be
consolidated no later than the third quarter, 2003. Group accounting policy in
2003 for these agreements is likely to be affected by these developments.

17 Accounts payable and accrued liabilities

|                                    |  |           |        |      |  |  |        | 
|----------------------------------- |  | --------- | ------ | ---- |  |  | ------ | 
|                                    |  | $ million
|                                    |  |          
|                                    |  | 2002      |        | 2001
|                                    |  |           |        |     
|Trade payables                      |  |           | 13,049 |      |  |  | 8,476  | 
|Amounts due to associated companies |  |           | 2,075  |      |  |  | 1,070  | 
|Pensions and similar obligations    |  |           | 250    |      |  |  | 193    | 
|Other payables                      |  |           | 10,588 |      |  |  | 4,677  | 
|Accruals and deferred income        |  |           | 6,116  |      |  |  | 4,468  | 
|                                    |  |           |        |      |  |  |        | 
|                                    |  |           | 32,078 |      |  |  | 18,884 | 
|                                    |  |           |        |      |  |  |        | 

Other payables include amounts in respect of risk management activities and, at
December 31, 2002, $1.3 billion for the acquisition of DEA, payable in July
2003.

18 Long-term liabilities  Other

This includes amounts in respect of risk management activities, advance
payments under long-term supply contracts, deposits, liabilities under staff
benefit programmes, deferred income and
environmental liabilities. The amount includes $926 million at December 31,
2002 (2001: $754 million) which does not fall due until more than five years
after the respective balance sheet dates.

G20   Royal Dutch/Shell Group of Companies



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##### Table of Contents



19 Statement of Cash Flows

This statement reflects the cash flows arising from the activities of Group
companies as measured in their own currencies, translated to dollars at
quarterly average rates of exchange.

Accordingly, the cash flows recorded in the Statement of Cash Flows exclude
both the currency translation differences which arise as a result of
translating the assets and liabilities of non-dollar Group companies to dollars
at year-end rates of exchange (except for those arising on cash and cash
equivalents) and non-cash investing and financing activities. These currency
translation differences and non-cash investing and financing activities must
therefore be added to the cash flow movements at average rates in order to
arrive at the movements derived from the Statement of Assets and Liabilities.

|                                                                                                                  |  |              |        |              |  |           |        |             |  |              |        |   |  |           |         |  
|----------------------------------------------------------------------------------------------------------------- |  | ------------ | ------ | ------------ |  | --------- | ------ | ----------- |  | ------------ | ------ | - |  | --------- | ------- | -
|2002                                                                                                              |  | $ million   
|                                                                                                                  |  |             
|                                                                                                                  |  |              |        |              |  |           |        |             |  |              |        |   |  | Movements
|                                                                                                                  |  | Movements    |        | Movements    |  |           |        |             |  | derived from
|                                                                                                                  |  | from         |        | arising from |  |           |        |             |  | Statement of
|                                                                                                                  |  | Statement of |        | currency     |  | Non-cash  |        | Assets and 
|                                                                                                                  |  | Cash Flows   |        | translation  |  | movements |        | Liabilities
|                                                                                                                  |  |              |        |              |  |           |        |            
|Tangible and intangible
fixed assets                                                                              |  |              | 12,193 |              |  |           | 4,533  |             |  |              | 15,051 |   |  |           | 31,777  |  
|Investments  associates                                                                                          |  |              | 460    |              |  |           | 851    |             |  |              | (1,708 | ) |  |           | (397    | )
|Other long-term assets                                                                                            |  |              | 773    |              |  |           | 547    |             |  |              | (1,737 | ) |  |           | (417    | )
|Inventories                                                                                                       |  |              | 1,461  |              |  |           | 704    |             |  |              | 1,792  |   |  |           | 3,957   |  
|Accounts receivable                                                                                               |  |              | 5,761  |              |  |           | 1,551  |             |  |              | 3,908  |   |  |           | 11,220  |  
|Cash and cash equivalents                                                                                         |  |              | (5,267 | )            |  |           | 153    |             |  |              |       |   |  |           | (5,114  | )
|Short-term debt                                                                                                   |  |              | (7,058 | )            |  |           | (855   | )           |  |              | (402   | ) |  |           | (8,315  | )
|Short-term part of long-term debt                                                                                 |  |              | (554   | )            |  |           | (17    | )           |  |              |       |   |  |           | (571    | )
|Accounts payable and
accrued liabilities                                                                          |  |              | (6,885 | )            |  |           | (2,369 | )           |  |              | (3,940 | ) |  |           | (13,194 | )
|Taxes payable                                                                                                     |  |              | 710    |              |  |           | (728   | )           |  |              | (498   | ) |  |           | (516    | )
|Long-term debt                                                                                                    |  |              | 688    |              |  |           | (502   | )           |  |              | (5,171 | ) |  |           | (4,985  | )
|Other long-term liabilities                                                                                       |  |              | (236   | )            |  |           | (346   | )           |  |              | (1,021 | ) |  |           | (1,603  | )
|Deferred taxation                                                                                                 |  |              | 161    |              |  |           | (1,214 | )           |  |              | (4,272 | ) |  |           | (5,325  | )
|Other provisions                                                                                                  |  |              | (434   | )            |  |           | (619   | )           |  |              | (2,545 | ) |  |           | (3,598  | )
|Other items                                                                                                       |  |              | (179   | )            |  |           | (347   | )           |  |              | 563    |   |  |           | 37      |  
|Net distributions to Parent
Companies                                                                             |  |              | 1,526  |              |  |           | (578   | )           |  |              |       |   |  |           | 948     |  
|Adjustment for Parent Companies
shares and Other comprehensive
income excluding currency
translation differences |  |              | 864    |              |  |           | 1,675  |             |  |              | (20    | ) |  |           |         |  
|                                                                                                                  |  |              |        |              |  |           |        |             |  |              |        |   |  |           |         |  
|                                                                                                                  |  |              | 3,984  |              |  |           | 2,439  |             |  |              |       |   |  |           | 3,904   |  
|                                                                                                                  |  |              |        |              |  |           |        |             |  |              |        |   |  |           |         |  

Income taxes paid by Group companies totalled $6.7 billion in 2002 (2001: $9.3
billion; 2000: $8.8 billion). Interest paid by Group companies was $1.0 billion
in 2002 (2001: $0.7 billion; 2000: $0.9 billion).

The main non-cash movements reflect the following fair values of assets
acquired and liabilities assumed resulting from: in Exploration and Production,
the acquisition of Enterprise Oil (second quarter); and, in Oil Products, of
Pennzoil-Quaker State (fourth quarter) and DEA (first quarter) and from the
reclassification of Equilon from an associate to a Group company due to the
acquisition of the outstanding shares (first quarter):

|                                           |  |                 |        |          |  |       |        |  |  |  |        | 
|------------------------------------------ |  | --------------- | ------ | -------- |  | ----- | ------ |  |  |  | ------ | 
|                                           |  | $ million      
|                                           |  |                
|                                           |  | Exploration and |        | Oil      |  |       |        | 
|                                           |  | Production      |        | Products |  | Total
|                                           |  |                 |        |          |  |      
|Tangible and intangible fixed assets       |  |                 | 11,286 |          |  |       | 11,999 |  |  |  | 23,285 | 
|Other assets                               |  |                 | 736    |          |  |       | 5,772  |  |  |  | 6,508  | 
|                                           |  |                 |        |          |  |       |        |  |  |  |        | 
|Total assets acquired                      |  |                 | 12,022 |          |  |       | 17,771 |  |  |  | 29,793 | 
|                                           |  |                 |        |          |  |       |        |  |  |  |        | 
|Current liabilities (excluding debt)       |  |                 | 252    |          |  |       | 3,609  |  |  |  | 3,861  | 
|Debt                                       |  |                 | 2,359  |          |  |       | 3,608  |  |  |  | 5,967  | 
|Deferred taxation                          |  |                 | 3,771  |          |  |       | 638    |  |  |  | 4,409  | 
|Other long-term liabilities and provisions |  |                 | 346    |          |  |       | 2,220  |  |  |  | 2,566  | 
|                                           |  |                 |        |          |  |       |        |  |  |  |        | 
|Total liabilities assumed                  |  |                 | 6,728  |          |  |       | 10,075 |  |  |  | 16,803 | 
|                                           |  |                 |        |          |  |       |        |  |  |  |        | 
|Less: Investment in associate reclassified |  |                 |       |          |  |       | 2,730  |  |  |  | 2,730  | 
|                                           |  |                 |        |          |  |       |        |  |  |  |        | 
|Purchase
considerationa                    |  |                 | 5,294  |          |  |       | 4,966  |  |  |  | 10,260 | 
|                                           |  |                 |        |          |  |       |        |  |  |  |        | 



---

| |  | a Includes $1.3 billion relating to DEA, payable in July 2003.
| |  | --------------------------------------------------------------

Royal Dutch/Shell Group of Companies   G21



---



##### Table of Contents



20 Employee retirement plans and other postretirement benefits

Retirement plans are provided for permanent employees of all major Group
companies. The nature of such plans varies according to the legal and fiscal
requirements and economic conditions of the country in which the employees are
engaged. Generally, the plans provide defined benefits based on employees
years of service and average final remuneration.

Some Group companies have established unfunded defined benefit plans to provide
certain postretirement health care and life insurance benefits to their
retirees, the entitlement to which is usually based on the employee remaining
in service up to retirement age and the completion of a minimum service period.

Plan assets principally comprise marketable securities and property holdings.

|                                                                                                           |  |                  |        |                |  |      |        |      |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  
|---------------------------------------------------------------------------------------------------------- |  | ---------------- | ------ | -------------- |  | ---- | ------ | ---- |  | --- | ------ | ----- |  | ----- | ---- | --- |  | ----- | ------ | ----- |  |  | ---- | - |  |  | ---- | - |  |  | ------ | -
|                                                                                                           |  | $ million       
|                                                                                                           |  |                 
|                                                                                                           |  | Pension benefits |        | Other benefits
|                                                                                                           |  |                  |        |               
|                                                                                                           |  | 2002             |        | 2001           |  | 2002 |        | 2001
|                                                                                                           |  |                  |        |                |  |      |        |     
|                                                                                                           |  |                  |        |                |  |      |        |      |  | USA |        | Other |  | Total |      | USA |  | Other |        | Total
|                                                                                                           |  |                  |        |                |  |      |        |      |  |     |        |       |  |       |      |     |  |       |        |      
|Change in benefit obligation                                                                               |  |                  |        |                |  |      |        |      |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  
|Obligations for benefits based on
employee service to date at January 1                                    |  |                  | 32,239 |                |  |      | 31,420 |      |  |     | 906    |       |  |       | 344  |     |  |       | 1,250  |       |  |  | 838  |   |  |  | 262  |   |  |  | 1,100  |  
|Increase in present value of the obligation for benefits
based on employee service during the year         |  |                  | 899    |                |  |      | 681    |      |  |     | 32     |       |  |       | 7    |     |  |       | 39     |       |  |  | 10   |   |  |  | 3    |   |  |  | 13     |  
|Interest on the obligation for benefits in respect
of employee service in previous years                   |  |                  | 2,001  |                |  |      | 1,784  |      |  |     | 111    |       |  |       | 21   |     |  |       | 132    |       |  |  | 61   |   |  |  | 15   |   |  |  | 76     |  
|Benefit payments made                                                                                      |  |                  | (1,780 | )              |  |      | (1,559 | )    |  |     | (72    | )     |  |       | (21  | )   |  |       | (93    | )     |  |  | (52  | ) |  |  | (18  | ) |  |  | (70    | )
|Currency translation effects                                                                               |  |                  | 3,938  |                |  |      | (1,071 | )    |  |     |       |       |  |       | 45   |     |  |       | 45     |       |  |  |     |   |  |  | (14  | ) |  |  | (14    | )
|Other
componentsa                                                                                          |  |                  | 1,812  |                |  |      | 984    |      |  |     | 1,091  |       |  |       | (19  | )   |  |       | 1,072  |       |  |  | 49   |   |  |  | 96   |   |  |  | 145    |  
|                                                                                                           |  |                  |        |                |  |      |        |      |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  
|Obligations for benefits based on
employee service to date at December 31b                                 |  |                  | 39,109 |                |  |      | 32,239 |      |  |     | 2,068  |       |  |       | 377  |     |  |       | 2,445  |       |  |  | 906  |   |  |  | 344  |   |  |  | 1,250  |  
|                                                                                                           |  |                  |        |                |  |      |        |      |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  
|Change in plan assets                                                                                      |  |                  |        |                |  |      |        |      |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  
|Plan assets held in trust at fair value at January 1                                                       |  |                  | 36,420 |                |  |      | 42,333 |      |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  
|Actual return on plan assets                                                                               |  |                  | (5,943 | )              |  |      | (3,420 | )    |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  
|Employer contributions                                                                                     |  |                  | 227    |                |  |      | 173    |      |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  
|Plan participants contributions                                                                           |  |                  | 17     |                |  |      | 11     |      |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  
|Benefit payments made                                                                                      |  |                  | (1,780 | )              |  |      | (1,559 | )    |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  
|Currency translation effects                                                                               |  |                  | 3,709  |                |  |      | (1,407 | )    |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  
|Other
componentsa                                                                                          |  |                  | 385    |                |  |      | 289    |      |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  
|                                                                                                           |  |                  |        |                |  |      |        |      |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  
|Plan
assets held in trust at fair value at December 31b                                                    |  |                  | 33,035 |                |  |      | 36,420 |      |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  
|                                                                                                           |  |                  |        |                |  |      |        |      |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  
|Plan assets in excess of/(less than) the present value
of obligations for benefits at December 31          |  |                  | (6,074 | )              |  |      | 4,181  |      |  |     | (2,068 | )     |  |       | (377 | )   |  |       | (2,445 | )     |  |  | (906 | ) |  |  | (344 | ) |  |  | (1,250 | )
|Unrecognised net (gains)/losses remaining from the
adoption of current method of determining pension costs |  |                  | 9      |                |  |      | (62    | )    |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  
|Unrecognised net (gains)/losses since adoption                                                             |  |                  | 9,125  |                |  |      | (1,334 | )    |  |     | 692    |       |  |       | 93   |     |  |       | 785    |       |  |  | 61   |   |  |  | 105  |   |  |  | 166    |  
|Unrecognised prior service cost/(credit)                                                                   |  |                  | 1,254  |                |  |      | 1,016  |      |  |     | (26    | )     |  |       |     |     |  |       | (26    | )     |  |  | (4   | ) |  |  | (1   | ) |  |  | (5     | )
|                                                                                                           |  |                  |        |                |  |      |        |      |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  
|Net amount recognised                                                                                      |  |                  | 4,314  |                |  |      | 3,801  |      |  |     | (1,402 | )     |  |       | (284 | )   |  |       | (1,686 | )     |  |  | (849 | ) |  |  | (240 | ) |  |  | (1,089 | )
|                                                                                                           |  |                  |        |                |  |      |        |      |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  
|Amounts recognised in the
Statement of Assets and Liabilities:                                             |  |                  |        |                |  |      |        |      |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  
|Intangible assets                                                                                          |  |                  | 420    |                |  |      |       |      |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  
|Prepaid benefit costs                                                                                      |  |                  | 4,506  |                |  |      | 4,714  |      |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  
|Accrued benefit liabilities                                                                                |  |                  | (3,580 | )              |  |      | (1,435 | )    |  |     | (1,402 | )     |  |       | (284 | )   |  |       | (1,686 | )     |  |  | (849 | ) |  |  | (240 | ) |  |  | (1,089 | )
|Amount recognised in Parent Companies
Interest in Group Net Assets:                                       |  |                  |        |                |  |      |        |      |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  
|Accumulated other comprehensive income                                                                     |  |                  | 2,968  |                |  |      | 522    |      |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  
|                                                                                                           |  |                  |        |                |  |      |        |      |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  
|Net amount recognised                                                                                      |  |                  | 4,314  |                |  |      | 3,801  |      |  |     | (1,402 | )     |  |       | (284 | )   |  |       | (1,686 | )     |  |  | (849 | ) |  |  | (240 | ) |  |  | (1,089 | )
|                                                                                                           |  |                  |        |                |  |      |        |      |  |     |        |       |  |       |      |     |  |       |        |       |  |  |      |   |  |  |      |   |  |  |        |  



---

|a |  | Other components comprise mainly the effect of acquisitions and changes in
actuarial assumptions.                                                                                                                                                                                                                                                                                       
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|b |  | For employee retirement plans with benefit obligation
in excess of plan assets, the respective amounts at December 31, 2002 were
benefit obligations of $26,343 million (2001: $2,590 million) and plan assets
of $21,072 million (2001: $1,698 million). The obligation for pension benefits
at December 31, 2002 in respect of unfunded plans was $1,302 million (2001:
$621 million).

G22   Royal Dutch/Shell Group of Companies



---



##### Table of Contents



20 Employee retirement plans and other postretirement benefits continued

Benefit costs for the year comprise:

|                                       |  |                  |        |                |  |      |        |      |  |      |        |      |  |     |     |       |  |       |    |     |  |       |     |       |  |     |    |       |  |       |    |  |  |  |    |  |  |  |    |   |  |  |    |  |  |  |    |  
|-------------------------------------- |  | ---------------- | ------ | -------------- |  | ---- | ------ | ---- |  | ---- | ------ | ---- |  | --- | --- | ----- |  | ----- | -- | --- |  | ----- | --- | ----- |  | --- | -- | ----- |  | ----- | -- |  |  |  | -- |  |  |  | -- | - |  |  | -- |  |  |  | -- | -
|                                       |  | $ million       
|                                       |  |                 
|                                       |  | Pension benefits |        | Other benefits
|                                       |  |                  |        |               
|                                       |  | 2002             |        | 2001           |  | 2000 |        | 2002 |  | 2001 |        | 2000
|                                       |  |                  |        |                |  |      |        |      |  |      |        |     
|                                       |  |                  |        |                |  |      |        |      |  |      |        |      |  | USA |     | Other |  | Total |    | USA |  | Other |     | Total |  | USA |    | Other |  | Total
|                                       |  |                  |        |                |  |      |        |      |  |      |        |      |  |     |     |       |  |       |    |     |  |       |     |       |  |     |    |       |  |      
|Service cost                           |  |                  | 899    |                |  |      | 681    |      |  |      | 681    |      |  |     | 32  |       |  |       | 7  |     |  |       | 39  |       |  |     | 10 |       |  |       | 3  |  |  |  | 13 |  |  |  | 10 |   |  |  | 4  |  |  |  | 14 |  
|Interest cost                          |  |                  | 2,001  |                |  |      | 1,784  |      |  |      | 1,700  |      |  |     | 111 |       |  |       | 21 |     |  |       | 132 |       |  |     | 61 |       |  |       | 15 |  |  |  | 76 |  |  |  | 61 |   |  |  | 16 |  |  |  | 77 |  
|Expected return
on plan assets         |  |                  | (3,339 | )              |  |      | (3,005 | )    |  |      | (2,839 | )    |  |     |     |       |  |       |    |     |  |       |     |       |  |     |    |       |  |       |    |  |  |  |    |  |  |  |    |   |  |  |    |  |  |  |    |  
|Other components                       |  |                  | (100   | )              |  |      | (216   | )    |  |      | (284   | )    |  |     | 76  |       |  |       | 7  |     |  |       | 83  |       |  |     | (2 | )     |  |       | 2  |  |  |  |   |  |  |  | (3 | ) |  |  | 2  |  |  |  | (1 | )
|                                       |  |                  |        |                |  |      |        |      |  |      |        |      |  |     |     |       |  |       |    |     |  |       |     |       |  |     |    |       |  |       |    |  |  |  |    |  |  |  |    |   |  |  |    |  |  |  |    |  
|Cost of defined
benefit plans          |  |                  | (539   | )              |  |      | (756   | )    |  |      | (742   | )    |  |     | 219 |       |  |       | 35 |     |  |       | 254 |       |  |     | 69 |       |  |       | 20 |  |  |  | 89 |  |  |  | 68 |   |  |  | 22 |  |  |  | 90 |  
|Payments to defined
contribution plans |  |                  | 84     |                |  |      | 87     |      |  |      | 75     |      |  |     |     |       |  |       |    |     |  |       |     |       |  |     |    |       |  |       |    |  |  |  |    |  |  |  |    |   |  |  |    |  |  |  |    |  
|                                       |  |                  |        |                |  |      |        |      |  |      |        |      |  |     |     |       |  |       |    |     |  |       |     |       |  |     |    |       |  |       |    |  |  |  |    |  |  |  |    |   |  |  |    |  |  |  |    |  
|                                       |  |                  | (455   | )              |  |      | (669   | )    |  |      | (667   | )    |  |     | 219 |       |  |       | 35 |     |  |       | 254 |       |  |     | 69 |       |  |       | 20 |  |  |  | 89 |  |  |  | 68 |   |  |  | 22 |  |  |  | 90 |  
|                                       |  |                  |        |                |  |      |        |      |  |      |        |      |  |     |     |       |  |       |    |     |  |       |     |       |  |     |    |       |  |       |    |  |  |  |    |  |  |  |    |   |  |  |    |  |  |  |    |  

Discount rates, projected rates of remuneration growth and expected rates of
return on plan assets vary for the different plans as they are determined in
the light of local conditions. The weighted averages applicable for the
principal plans in the Group are:

|                                                         |  |                  |                |      |  |      |     |      |  |     |      |       |  |     |      |       |  |  |      |   |  |  |      |  
|-------------------------------------------------------- |  | ---------------- | -------------- | ---- |  | ---- | --- | ---- |  | --- | ---- | ----- |  | --- | ---- | ----- |  |  | ---- | - |  |  | ---- | -
|                                                         |  | Pension benefits | Other benefits
|                                                         |  |                  |               
|                                                         |  | 2002             |                | 2001 |  | 2002 |     | 2001
|                                                         |  |                  |                |      |  |      |     |     
|                                                         |  |                  |                |      |  |      |     |      |  | USA |      | Other |  | USA |      | Other
|                                                         |  |                  |                |      |  |      |     |      |  |     |      |       |  |     |      |      
|Discount rate                                            |  |                  | 5.9            | %    |  |      | 6.0 | %    |  |     | 6.5  | %     |  |     | 5.6  | %     |  |  | 7.0  | % |  |  | 6.0  | %
|Projected rate of remuneration growth                    |  |                  | 4.0            | %    |  |      | 4.0 | %    |  |     |      |       |  |     |      |       |  |  |      |   |  |  |      |  
|Expected rate of return on plan assets                   |  |                  | 8.0            | %    |  |      | 7.8 | %    |  |     |      |       |  |     |      |       |  |  |      |   |  |  |      |  
|Health care cost trend rate in year after reporting year |  |                  |                |      |  |      |     |      |  |     | 7.8  | %     |  |     | 4.6  | %     |  |  | 6.5  | % |  |  | 4.7  | %
|Ultimate health care cost trend rate                     |  |                  |                |      |  |      |     |      |  |     | 5.0  | %     |  |     | 2.9  | %     |  |  | 5.0  | % |  |  | 2.9  | %
|Year ultimate health care cost trend rate is applicable  |  |                  |                |      |  |      |     |      |  |     | 2010 |       |  |     | 2004 |       |  |  | 2005 |   |  |  | 2003 |  
|                                                         |  |                  |                |      |  |      |     |      |  |     |      |       |  |     |      |       |  |  |      |   |  |  |      |  

The effect of a one percentage point increase/(decrease) in the annual rate of
increase in the assumed health care cost trend rates would be to
increase/(decrease) annual postretirement benefit cost by approximately $27
million/($24 million) and the accumulated postretirement benefit obligation by
approximately $341 million/($287 million).

Royal Dutch/Shell Group of Companies   G23



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##### Table of Contents



21 Employee emoluments and numbers

(a)  Emoluments

|                                           |  |           |       |      |  |      |       |   |  |  |       |  
|------------------------------------------ |  | --------- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|                                           |  | $ million
|                                           |  |          
|                                           |  | 2002      |       | 2001 |  | 2000
|                                           |  |           |       |      |  |     
|Remuneration                               |  |           | 6,096 |      |  |      | 4,651 |   |  |  | 4,560 |  
|Social law taxes                           |  |           | 518   |      |  |      | 395   |   |  |  | 390   |  
|Pensions and similar obligations (Note 20) |  |           | (201  | )    |  |      | (580  | ) |  |  | (577  | )
|                                           |  |           |       |      |  |      |       |   |  |  |       |  
|                                           |  |           | 6,413 |      |  |      | 4,466 |   |  |  | 4,373 |  
|                                           |  |           |       |      |  |      |       |   |  |  |       |  

(b) Average numbers

|                           |  |           |     |      |  |      |    |  |  |  |    | 
|-------------------------- |  | --------- | --- | ---- |  | ---- | -- |  |  |  | -- | 
|                           |  | thousands
|                           |  |          
|                           |  | 2002      |     | 2001 |  | 2000
|                           |  |           |     |      |  |     
|Exploration and Production |  |           | 17  |      |  |      | 14 |  |  |  | 13 | 
|Gas & Power                |  |           | 2   |      |  |      | 2  |  |  |  | 2  | 
|Oil Products               |  |           | 75  |      |  |      | 58 |  |  |  | 58 | 
|Chemicals                  |  |           | 9   |      |  |      | 9  |  |  |  | 14 | 
|Corporate and Other        |  |           | 8   |      |  |      | 7  |  |  |  | 8  | 
|                           |  |           |     |      |  |      |    |  |  |  |    | 
|                           |  |           | 111 |      |  |      | 90 |  |  |  | 95 | 
|                           |  |           |     |      |  |      |    |  |  |  |    | 

(c) Year-end numbers

|                           |  |           |     |      |  |      |    |  |  |  |    | 
|-------------------------- |  | --------- | --- | ---- |  | ---- | -- |  |  |  | -- | 
|                           |  | thousands
|                           |  |          
|                           |  | 2002      |     | 2001 |  | 2000
|                           |  |           |     |      |  |     
|Exploration and Production |  |           | 17  |      |  |      | 15 |  |  |  | 13 | 
|Gas & Power                |  |           | 2   |      |  |      | 2  |  |  |  | 2  | 
|Oil Products               |  |           | 80  |      |  |      | 58 |  |  |  | 58 | 
|Chemicals                  |  |           | 9   |      |  |      | 9  |  |  |  | 10 | 
|Corporate and Other        |  |           | 8   |      |  |      | 7  |  |  |  | 7  | 
|                           |  |           |     |      |  |      |    |  |  |  |    | 
|                           |  |           | 116 |      |  |      | 91 |  |  |  | 90 | 
|                           |  |           |     |      |  |      |    |  |  |  |    | 

In addition to remuneration above, there were charges for redundancy of $215
million in 2002 (2001: $110 million; 2000: $120 million).

The liabilities for redundancies at December 31, 2002 totalled $395 million
(2001: $222 million; 2000: $300 million), including $98 million remaining from
liabilities assumed on acquisitions in 2002.

G24   Royal Dutch/Shell Group of Companies



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##### Table of Contents



22 Stock-based compensation plans and Parent Companies shares held by Group companies

Stock-based compensation plans

Certain Group companies have in place various stock-based plans for senior
staff and other employees of those and other Group companies. Details of the
principal plans are given below.

The Group Stock Option Plans offer eligible employees options over Royal Dutch
ordinary shares (Royal Dutch shares) or Shell Transport Ordinary shares (Shell
Transport shares) at a price not less than the fair market value of the shares
at the date the options were granted. The options are mainly exercisable three
years from grant. The options lapse ten years after grant or, if earlier, on
resignation from Group employment (subject to certain exceptions). For Group
Managing Directors and the most senior executives, a proportion of the options
granted is subject to performance conditions primarily based on Total
Shareholder Return.

Under the Restricted Stock Plan, grants are made on a highly selective basis to
senior staff. A maximum of 250,000 Royal Dutch shares (or equivalent value in
Shell Transport shares) can be granted under the plan in any year. Shares are
granted subject to a three-year restriction period and the number of shares
awarded is based on the share price at the start of the restricted period. The
shares, together with additional shares equivalent to the value of the
dividends payable over the restriction period, are released to the individual
at the end of the three-year period.

The following table shows for 2001 and 2002, in respect of option plans, the
number of shares under option at the beginning of the year, the number of
options granted, exercised and expired during the year and the number of shares
under option at the end of the year, together with their weighted average
exercise price translated at the respective year-end exchange rates:

|                                  |  |                    |        |                        |  |                             |       |       |  |             |         |          |  |  |      |  |  |          |       |   |  |  |       | 
|--------------------------------- |  | ------------------ | ------ | ---------------------- |  | --------------------------- | ----- | ----- |  | ----------- | ------- | -------- |  |  | ---- |  |  | -------- | ----- | - |  |  | ----- | 
|                                  |  | Royal Dutch shares |        | Shell Transport shares |  | Shell Canada common sharesa
|                                  |  |                    |        |                        |  |                            
|                                  |  |                    |        |                        |  | Weighted                    |       |       |  |             |         | Weighted |  |  |      |  |  | Weighted
|                                  |  |                    |        |                        |  | average                     |       |       |  |             |         | average  |  |  |      |  |  | average 
|                                  |  |                    |        |                        |  | exercise                    |       |       |  |             |         | exercise |  |  |      |  |  | exercise
|                                  |  | Number             |        | price                  |  | Number                      |       | price |  | Number      |         | price   
|                                  |  | (thousands)        |        | ($)                    |  | (thousands)                 |       | ($)   |  | (thousands) |         | ($)     
|                                  |  |                    |        |                        |  |                             |       |       |  |             |         |         
|Under option at 1 January, 2001   |  |                    | 10,214 |                        |  |                             | 47.86 |       |  |             | 41,937  |          |  |  | 6.34 |  |  |          | 2,560 |   |  |  | 15.81 | 
|Granted                           |  |                    | 11,302 |                        |  |                             | 59.24 |       |  |             | 30,601  |          |  |  | 8.33 |  |  |          | 1,311 |   |  |  | 22.95 | 
|Exercised                         |  |                    | (886   | )                      |  |                             | 34.23 |       |  |             | (6,882  | )        |  |  | 5.21 |  |  |          | (240  | ) |  |  | 13.59 | 
|Expired                           |  |                    | (229   | )                      |  |                             | 41.65 |       |  |             | (644    | )        |  |  | 5.97 |  |  |          | (15   | ) |  |  | 20.13 | 
|                                  |  |                    |        |                        |  |                             |       |       |  |             |         |          |  |  |      |  |  |          |       |   |  |  |       | 
|Under option at December 31, 2001 |  |                    | 20,401 |                        |  |                             | 54.10 |       |  |             | 65,012  |          |  |  | 7.30 |  |  |          | 3,616 |   |  |  | 17.89 | 
|                                  |  |                    |        |                        |  |                             |       |       |  |             |         |          |  |  |      |  |  |          |       |   |  |  |       | 
|Granted                           |  |                    | 13,792 |                        |  |                             | 59.71 |       |  |             | 39,210  |          |  |  | 8.45 |  |  |          | 1,567 |   |  |  | 28.36 | 
|Exercised                         |  |                    | (180   | )                      |  |                             | 47.12 |       |  |             | (796    | )        |  |  | 6.21 |  |  |          | (394  | ) |  |  | 14.45 | 
|Expired                           |  |                    | (632   | )                      |  |                             | 54.50 |       |  |             | (1,979  | )        |  |  | 7.53 |  |  |          | (12   | ) |  |  | 25.21 | 
|                                  |  |                    |        |                        |  |                             |       |       |  |             |         |          |  |  |      |  |  |          |       |   |  |  |       | 
|Under option at December 31, 2002 |  |                    | 33,381 |                        |  |                             | 59.86 |       |  |             | 101,447 |          |  |  | 8.26 |  |  |          | 4,777 |   |  |  | 21.71 | 
|                                  |  |                    |        |                        |  |                             |       |       |  |             |         |          |  |  |      |  |  |          |       |   |  |  |       | 



---

|a |  | Unissued.
|- |  | ---------

The following tables provide further information about the options outstanding
at December 31, 2002:

|                         |  |                     |        |                     |  |             |     |             |  |       |       |  |  |          |       |  |  |  |       | 
|------------------------ |  | ------------------- | ------ | ------------------- |  | ----------- | --- | ----------- |  | ----- | ----- |  |  | -------- | ----- |  |  |  | ----- | 
|                         |  | Royal Dutch shares 
|                         |  |                    
|                         |  | Options outstanding |        | Options exercisable
|                         |  |                     |        |                    
|                         |  |                     |        |                     |  | Weighted    |     |             |  |       |       |  |  |          |       |  |  | 
|                         |  |                     |        |                     |  | average     |     | Weighted    |  |       |       |  |  | Weighted
|                         |  |                     |        |                     |  | remaining   |     | average     |  |       |       |  |  | average 
|                         |  |                     |        |                     |  | contractual |     | exercise    |  |       |       |  |  | exercise
|                         |  | Number              |        | life                |  | price       |     | Number      |  | price
|Range of exercise prices |  | (thousands)         |        | (years)             |  | ($)         |     | (thousands) |  | ($)  
|                         |  |                     |        |                     |  |             |     |             |  |      
|$40 to $45               |  |                     | 2,062  |                     |  |             | 5.3 |             |  |       | 42.98 |  |  |          | 1,873 |  |  |  | 43.07 | 
|$45 to $50               |  |                     | 11     |                     |  |             | 8.8 |             |  |       | 47.98 |  |  |          | 4     |  |  |  | 47.98 | 
|$50 to $55               |  |                     | 10,231 |                     |  |             | 7.9 |             |  |       | 53.46 |  |  |          | 2,784 |  |  |  | 51.75 | 
|$55 to $60               |  |                     | 814    |                     |  |             | 7.7 |             |  |       | 56.92 |  |  |          | 425   |  |  |  | 56.44 | 
|$60 to $65               |  |                     | 14,263 |                     |  |             | 8.5 |             |  |       | 62.74 |  |  |          | 1,195 |  |  |  | 60.77 | 
|$65 to $70               |  |                     | 2,637  |                     |  |             | 7.8 |             |  |       | 65.51 |  |  |          |      |  |  |  |      | 
|$70 to $75               |  |                     | 3,363  |                     |  |             | 8.3 |             |  |       | 73.79 |  |  |          |      |  |  |  |      | 
|                         |  |                     |        |                     |  |             |     |             |  |       |       |  |  |          |       |  |  |  |       | 
|$40 to $75               |  |                     | 33,381 |                     |  |             | 8.0 |             |  |       | 59.86 |  |  |          | 6,281 |  |  |  | 51.19 | 
|                         |  |                     |        |                     |  |             |     |             |  |       |       |  |  |          |       |  |  |  |       | 

Royal Dutch/Shell Group of Companies   G25



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##### Table of Contents



22 Stock-based compensation plans and Parent Companies shares held by Group
companiescontinued

|                         |  |                        |         |         |  |             |     |             |  |       |      |  |  |          |        |  |  |  |      | 
|------------------------ |  | ---------------------- | ------- | ------- |  | ----------- | --- | ----------- |  | ----- | ---- |  |  | -------- | ------ |  |  |  | ---- | 
|                         |  | Shell Transport shares
|                         |  |                       
|                         |  |                        |         |         |  | Weighted    |     |             |  |       |      |  |  |          |        |  |  | 
|                         |  |                        |         |         |  | average     |     | Weighted    |  |       |      |  |  | Weighted
|                         |  |                        |         |         |  | remaining   |     | average     |  |       |      |  |  | average 
|                         |  |                        |         |         |  | contractual |     | exercise    |  |       |      |  |  | exercise
|                         |  | Number                 |         | life    |  | price       |     | Number      |  | price
|Range of exercise prices |  | (thousands)            |         | (years) |  | ($)         |     | (thousands) |  | ($)  
|                         |  |                        |         |         |  |             |     |             |  |      
|$5 to $6                 |  |                        | 11,511  |         |  |             | 4.9 |             |  |       | 5.84 |  |  |          | 11,511 |  |  |  | 5.84 | 
|$6 to $7                 |  |                        | 512     |         |  |             | 9.8 |             |  |       | 6.47 |  |  |          |       |  |  |  |     | 
|$7 to $8                 |  |                        | 7,384   |         |  |             | 3.9 |             |  |       | 7.06 |  |  |          | 7,384  |  |  |  | 7.06 | 
|$8 to $9                 |  |                        | 69,252  |         |  |             | 8.3 |             |  |       | 8.51 |  |  |          |       |  |  |  |     | 
|$9 to $10                |  |                        | 12,788  |         |  |             | 5.9 |             |  |       | 9.84 |  |  |          |       |  |  |  |     | 
|                         |  |                        |         |         |  |             |     |             |  |       |      |  |  |          |        |  |  |  |      | 
|$5 to $10                |  |                        | 101,447 |         |  |             | 7.3 |             |  |       | 8.26 |  |  |          | 18,895 |  |  |  | 6.32 | 
|                         |  |                        |         |         |  |             |     |             |  |       |      |  |  |          |        |  |  |  |      | 

In the UK, The Shell Petroleum Company Limited and Shell Petroleum N.V. each
operate a savings-related stock option scheme, under which options are granted
over shares of Shell Transport at prices not less than the market value on a
date not more than 30 days before the date of the grant of option and are
normally exercisable after completion of a three-year or five-year contractual
savings period. The following table shows for 2001 and 2002, in respect of
these plans, the number of Shell Transport shares under option at the beginning
of the year, the number of options granted, exercised and expired during the
year and the number of shares under option at the end of the year:

|                            |  |           |        |      |  |  |        |  
|--------------------------- |  | --------- | ------ | ---- |  |  | ------ | -
|                            |  | thousands
|                            |  |          
|                            |  | 2002      |        | 2001
|                            |  |           |        |     
|Under option at 1 January   |  |           | 17,549 |      |  |  | 19,538 |  
|Granted                     |  |           | 6,898  |      |  |  | 4,291  |  
|Exercised                   |  |           | (4,911 | )    |  |  | (4,818 | )
|Expired                     |  |           | (856   | )    |  |  | (1,462 | )
|                            |  |           |        |      |  |  |        |  
|Under option at December 31 |  |           | 18,680 |      |  |  | 17,549 |  
|                            |  |           |        |      |  |  |        |  

In 2001, the Global Employee Share Purchase Plan was implemented giving
eligible employees the opportunity to buy Royal Dutch or Shell Transport
shares, with 15% added after a specified holding period. At December 31, 2002,
3,310 (2001: 25,990) Royal Dutch shares and 14,578 (2001: 77,627) Shell
Transport shares were held by Group companies in connection with the Global
Employee Share Purchase Plan.

Effects on Group net income and Earnings per share under the fair value method

A comparison of the Groups net income and Earnings per share for both Royal
Dutch and Shell Transport as reported under the intrinsic value method and on a
pro forma basis calculated as if the fair value of options and share purchase
rights granted would have been considered as compensation expense is as
follows:

|                                                     |  |             |       |           |  |             |       |           |  |             |        |           |  |  |        |  |  |  |        |  |  |  |        | 
|---------------------------------------------------- |  | ----------- | ----- | --------- |  | ----------- | ----- | --------- |  | ----------- | ------ | --------- |  |  | ------ |  |  |  | ------ |  |  |  | ------ | 
|                                                     |  | 2002        |       | 2001      |  | 2000       
|                                                     |  |             |       |           |  |            
|                                                     |  | As reported |       | Pro forma |  | As reported |       | Pro forma |  | As reported |        | Pro forma
|                                                     |  |             |       |           |  |             |       |           |  |             |        |          
|Group net income ($ million)                         |  |             | 9,419 |           |  |             | 9,216 |           |  |             | 10,852 |           |  |  | 10,742 |  |  |  | 12,719 |  |  |  | 12,688 | 
|Earnings per share attributable to Royal Dutch ($)   |  |             | 2.70  |           |  |             | 2.64  |           |  |             | 3.07   |           |  |  | 3.04   |  |  |  | 3.56   |  |  |  | 3.55   | 
|Earnings per ADR attributable to Shell Transport ($) |  |             | 2.33  |           |  |             | 2.28  |           |  |             | 2.65   |           |  |  | 2.62   |  |  |  | 3.07   |  |  |  | 3.06   | 
|                                                     |  |             |       |           |  |             |       |           |  |             |        |           |  |  |        |  |  |  |        |  |  |  |        | 

The fair value of the Groups 2002 option grants was estimated using a
Black-Scholes option pricing model and the following assumptions for US dollar,
euro and sterling denominated options respectively: risk-free interest rates of
4.6, 4.9 and 5.3 percent; dividend yield of 2.8, 2.7 and 2.8 percent;
volatility of 31.2, 30.1 and 32.6 percent and expected lives of five years.

G26   Royal Dutch/Shell Group of Companies



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##### Table of Contents



22 Stock-based compensation plans and Parent Companies shares held by Group
companiescontinued

Parent Companies shares held by Group companies

Group companies purchase shares of the Parent Companies in the open market with
the purpose of hedging their future obligations arising from the stock options
granted to their employees and employees of other Group companies. The number
of shares held by Group companies at December 31 in connection with stock
option plans were as follows:

|                       |  |      |             |      |  |  |            | 
|---------------------- |  | ---- | ----------- | ---- |  |  | ---------- | 
|                       |  | 2002 |             | 2001
|                       |  |      |             |     
|Royal Dutch shares     |  |      | 29,892,326  |      |  |  | 17,428,720 | 
|Shell Transport shares |  |      | 111,121,746 |      |  |  | 80,448,200 | 
|                       |  |      |             |      |  |  |            | 

In connection with other incentive compensation plans linked to the
appreciation in value of Royal Dutch and of Shell Transport shares, 9,185,957
Royal Dutch shares and 385,800 Shell Transport shares were held by Group
companies at December 31, 2002 and 2001. In addition, 33,600 shares of Royal
Dutch were held by Group companies at December 31, 2002 and 2001.

The carrying amount of these and all Parent Company shares held in connection
with the stock-based compensation plans at December 31, 2002 is $2,797 million
(2001: $1,953 million).

23 Decommissioning and restoration costs

For the purposes of calculating provisions for decommissioning and restoration
costs, estimated total ultimate liabilities of $5.2 billion at December 31, 2002
(2001: $4.3 billion) were used. Such estimates are subject to various
regulatory and technological developments.

New US accounting standard FAS 143 (Asset Retirement Obligations) requires that
an entity shall recognise the discounted ultimate liability for an asset
retirement obligation in the period in which it is incurred together with an
offsetting asset. This standard will be effective for the Group from 2003 and
the expected amount of the transition adjustment after tax is a credit to
income of approximately $0.3 billion.

24 Information by geographical area and by industry segment

(a)  Geographical area

|                         |  |           |         |        |  |          |         |        |  |          |         |        |  |  |        |  |  |  |         |  |  |  |        | 
|------------------------ |  | --------- | ------- | ------ |  | -------- | ------- | ------ |  | -------- | ------- | ------ |  |  | ------ |  |  |  | ------- |  |  |  | ------ | 
|                         |  | $ million
|                         |  |          
|                         |  | 2002      |         | 2001   |  |          |         |        |  | 2000    
|                         |  |           |         |        |  |          |         |        |  |         
|                         |  | Net       |         | Fixed  |  | Net      |         | Fixed  |  | Net      |         | Fixed 
|                         |  | proceeds  |         | assets |  | proceeds |         | assets |  | proceeds |         | assets
|                         |  |           |         |        |  |          |         |        |  |          |         |       
|Europe                   |  |           | 65,137  |        |  |          | 36,770  |        |  |          | 62,259  |        |  |  | 19,286 |  |  |  | 68,060  |  |  |  | 22,102 | 
|Other Eastern Hemisphere |  |           | 33,322  |        |  |          | 28,957  |        |  |          | 31,866  |        |  |  | 26,513 |  |  |  | 34,144  |  |  |  | 22,767 | 
|USA                      |  |           | 62,632  |        |  |          | 27,082  |        |  |          | 21,095  |        |  |  | 17,651 |  |  |  | 26,089  |  |  |  | 15,884 | 
|Other Western Hemisphere |  |           | 18,340  |        |  |          | 12,037  |        |  |          | 19,991  |        |  |  | 9,899  |  |  |  | 20,853  |  |  |  | 8,977  | 
|                         |  |           |         |        |  |          |         |        |  |          |         |        |  |  |        |  |  |  |         |  |  |  |        | 
|Total Group              |  |           | 179,431 |        |  |          | 104,846 |        |  |          | 135,211 |        |  |  | 73,349 |  |  |  | 149,146 |  |  |  | 69,730 | 
|                         |  |           |         |        |  |          |         |        |  |          |         |        |  |  |        |  |  |  |         |  |  |  |        | 

Royal Dutch/Shell Group of Companies   G27



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##### Table of Contents



24 Information by geographical area and by industry segmentcontinued

(b)  Industry segment

|                                                                              |                                     |           |         |         |            |  |             |        |          |  |           |        |           |  |           |        |   |  |        |        |   |  |        |     |  
|----------------------------------------------------------------------------- | ----------------------------------- | --------- | ------- | ------- | ---------- |  | ----------- | ------ | -------- |  | --------- | ------ | --------- |  | --------- | ------ | - |  | ------ | ------ | - |  | ------ | --- | -
|2002                                                                          |                                     | $ million
|                                                                              |                                     |          
|                                                                              |                                     |           |         |         |            |  | Exploration |        |          |  |           |        |           |  |           |        |   |  |        |        |   |  |       
|                                                                              |                                     |           | Total   |         | and        |  | Gas &       |        | Oil      |  |           |        |           |  | Corporate
|                                                                              |                                     |           | Group   |         | Production |  | Power       |        | Products |  | Chemicals |        | and Other
|                                                                              |                                     |           |         |         |            |  |             |        |          |  |           |        |          
|Sales                                                                         |                                     |           |         |         |            |  |             |        |          |  |           |        |           |  |           |        |   |  |        |        |   |  |        |    
|third parties                                                                 |                                     |           | 179,431 |         |            |  | 12,017      |        |          |  | 16,992    |        |           |  | 135,544   |        |   |  | 14,125 |        |   |  | 753    |    
|inter-segment                                                                 |                                     |           |         |         |            |  | 14,319      |        |          |  | 620       |        |           |  | 3,080     |        |   |  | 1,082  |        |   |  | 17     |    
|                                                                              |                                     |           |         |         |            |  |             |        |          |  |           |        |           |  |           |        |   |  |        |        |   |  |        |    
|Net proceeds                                                                  |                                     |           |         |         |            |  | 26,336      |        |          |  | 17,612    |        |           |  | 138,624   |        |   |  | 15,207 |        |   |  | 770    |    
|                                                                              |                                     |           |         |         |            |  |             |        |          |  |           |        |           |  |           |        |   |  |        |        |   |  |        |    
|Operating profit/(loss)
Group companies                                       |                                     |           | 15,199  |         |            |  | 12,527      |        |          |  | 107       |        |           |  | 2,688     |        |   |  | 321    |        |   |  | (444   | )  
|                                                                              | Group share of associated companies |           |         | 2,624   |            |  |             | 1,322  |          |  |           | 751    |           |  |           | 358    |   |  |        | 213    |   |  |        | (20 | )
|                                                                              |                                     |           |         |         |            |  |             |        |          |  |           |        |           |  |           |        |   |  |        |        |   |  |        |    
|                                                                              |                                     |           | 17,823  |         |            |  | 13,849      |        |          |  | 858       |        |           |  | 3,046     |        |   |  | 534    |        |   |  | (464   | )  
|Interest and other income                                                     |                                     |           | 758     |         |            |  | 98          |        |          |  | 118       |        |           |  | 14        |        |   |  | 3      |        |   |  | 525    |    
|Interest expense                                                              |                                     |           | 1,364   |         |            |  |             |        |          |  |           |        |           |  |           |        |   |  |        |        |   |  | 1,364  |    
|Currency exchange gains/(losses)                                              |                                     |           | (23     | )       |            |  | (26         | )      |          |  | 6         |        |           |  | (64       | )      |   |  | (16    | )      |   |  | 77     |    
|Taxation                                                                      |                                     |           | 7,617   |         |            |  | 6,924       |        |          |  | 208       |        |           |  | 818       |        |   |  | 32     |        |   |  | (365   | )  
|Income applicable to minority interests                                       |                                     |           | 158     |         |            |  |             |        |          |  |           |        |           |  |           |        |   |  |        |        |   |  |        |    
|                                                                              |                                     |           |         |         |            |  |             |        |          |  |           |        |           |  |           |        |   |  |        |        |   |  |        |    
|Net income                                                                    |                                     |           | 9,419   |         |            |  | 6,997       |        |          |  | 774       |        |           |  | 2,178     |        |   |  | 489    |        |   |  | (861   | )  
|                                                                              |                                     |           |         |         |            |  |             |        |          |  |           |        |           |  |           |        |   |  |        |        |   |  |        |    
|Total assets at December 31                                                   |                                     |           | 152,691 |         |            |  | 57,914      |        |          |  | 16,057    |        |           |  | 59,389    |        |   |  | 13,966 |        |   |  | 5,365  |    
|Investments in associated companies at December 31                            |                                     |           | 17,621  |         |            |  | 3,594       |        |          |  | 4,679     |        |           |  | 5,017     |        |   |  | 4,154  |        |   |  | 177    |    
|Capital expenditure, acquisitions and new investments in associated companies |                                     |           | 23,733  |         |            |  | 13,237      |        |          |  | 952       |        |           |  | 7,968     |        |   |  | 998    |        |   |  | 578    |    
|Depreciation, depletion and amortisation charge                               |                                     |           | 8,454   |         |            |  | 5,406       |        |          |  | 128       |        |           |  | 2,406     |        |   |  | 401    |        |   |  | 113    |    
|                                                                              | of which: Impairment                |           |         | 197     |            |  |             | 33     |          |  |           | 5      |           |  |           | 110    |   |  |        | 29     |   |  |        | 20  |  
|                                                                              |                                     |           |         |         |            |  |             |        |          |  |           |        |           |  |           |        |   |  |        |        |   |  |        |    
|                                                                             
|                                                                             
|2001                                                                          |                                     | $ million
|                                                                              |                                     |          
|                                                                              |                                     |           |         |         |            |  | Exploration |        |          |  |           |        |           |  |           |        |   |  |        |        |   |  |       
|                                                                              |                                     |           | Total   |         | and        |  | Gas &       |        | Oil      |  |           |        |           |  | Corporate
|                                                                              |                                     |           | Group   |         | Production |  | Power       |        | Products |  | Chemicals |        | and Other
|                                                                              |                                     |           |         |         |            |  |             |        |          |  |           |        |          
|Sales                                                                         |                                     |           |         |         |            |  |             |        |          |  |           |        |           |  |           |        |   |  |        |        |   |  |        |    
|                                                                              | third parties                       |           |         | 135,211 |            |  |             | 12,137 |          |  |           | 15,721 |           |  |           | 93,517 |   |  |        | 13,260 |   |  |        | 576 |  
|                                                                              | inter-segment                       |           |         |         |            |  |             | 13,951 |          |  |           | 705    |           |  |           | 2,108  |   |  |        | 990    |   |  |        | 2   |  
|                                                                              |                                     |           |         |         |            |  |             |        |          |  |           |        |           |  |           |        |   |  |        |        |   |  |        |     |  
|Net proceeds                                                                  |                                     |           |         |         |            |  | 26,088      |        |          |  | 16,426    |        |           |  | 95,625    |        |   |  | 14,250 |        |   |  | 578    |    
|                                                                              |                                     |           |         |         |            |  |             |        |          |  |           |        |           |  |           |        |   |  |        |        |   |  |        |     |  
|Operating profit/(loss)
Group companies                                       |                                     |           | 16,961  |         |            |  | 14,256      |        |          |  | 538       |        |           |  | 2,631     |        |   |  | 124    |        |   |  | (588   | )  
|                                                                              | Group share of associated companies |           |         | 3,041   |            |  |             | 1,532  |          |  |           | 941    |           |  |           | 654    |   |  |        | (27    | ) |  |        | (59 | )
|                                                                              |                                     |           |         |         |            |  |             |        |          |  |           |        |           |  |           |        |   |  |        |        |   |  |        |     |  
|                                                                              |                                     |           | 20,002  |         |            |  | 15,788      |        |          |  | 1,479     |        |           |  | 3,285     |        |   |  | 97     |        |   |  | (647   | )  
|Interest and other income                                                     |                                     |           | 1,059   |         |            |  | 52          |        |          |  | 128       |        |           |  | (12       | )      |   |  | 2      |        |   |  | 889    |    
|Interest expense                                                              |                                     |           | 1,133   |         |            |  |             |        |          |  |           |        |           |  |           |        |   |  |        |        |   |  | 1,133  |    
|Currency exchange gains/(losses)                                              |                                     |           | (30     | )       |            |  | (4          | )      |          |  | 4         |        |           |  | (50       | )      |   |  | (6     | )      |   |  | 26     |    
|Taxation                                                                      |                                     |           | 8,694   |         |            |  | 7,813       |        |          |  | 385       |        |           |  | 891       |        |   |  | (137   | )      |   |  | (258   | )  
|Income applicable to minority interests                                       |                                     |           | 352     |         |            |  |             |        |          |  |           |        |           |  |           |        |   |  |        |        |   |  |        |    
|                                                                              |                                     |           |         |         |            |  |             |        |          |  |           |        |           |  |           |        |   |  |        |        |   |  |        |     |  
|Net income                                                                    |                                     |           | 10,852  |         |            |  | 8,023       |        |          |  | 1,226     |        |           |  | 2,332     |        |   |  | 230    |        |   |  | (607   | )  
|                                                                              |                                     |           |         |         |            |  |             |        |          |  |           |        |           |  |           |        |   |  |        |        |   |  |        |     |  
|Total assets at December 31                                                   |                                     |           | 111,543 |         |            |  | 39,918      |        |          |  | 11,815    |        |           |  | 37,545    |        |   |  | 12,056 |        |   |  | 10,209 |    
|Investments in associated companies at December 31                            |                                     |           | 18,018  |         |            |  | 3,462       |        |          |  | 4,614     |        |           |  | 6,072     |        |   |  | 3,739  |        |   |  | 131    |    
|Capital expenditure and new investments in associated companies               |                                     |           | 10,700  |         |            |  | 7,164       |        |          |  | 908       |        |           |  | 1,527     |        |   |  | 760    |        |   |  | 341    |    
|Depreciation, depletion and amortisation charge                               |                                     |           | 6,117   |         |            |  | 3,834       |        |          |  | 106       |        |           |  | 1,617     |        |   |  | 404    |        |   |  | 156    |    
|                                                                              | of which: Impairment                |           |         | 88      |            |  |             | 8      |          |  |           | (8     | )         |  |           | (4     | ) |  |        | 40     |   |  |        | 52  |  
|                                                                              |                                     |           |         |         |            |  |             |        |          |  |           |        |           |  |           |        |   |  |        |        |   |  |        |     |  

G28   Royal Dutch/Shell Group of Companies



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##### Table of Contents



|                                                                |                                     |           |         |         |            |  |             |        |          |  |           |        |           |  |           |         |  |  |        |        |  |  |        |      |  
|--------------------------------------------------------------- | ----------------------------------- | --------- | ------- | ------- | ---------- |  | ----------- | ------ | -------- |  | --------- | ------ | --------- |  | --------- | ------- |  |  | ------ | ------ |  |  | ------ | ---- | -
|2000                                                            |                                     | $ million
|                                                                |                                     |          
|                                                                |                                     |           |         |         |            |  | Exploration |        |          |  |           |        |           |  |           |         |  |  |        |        |  |  |       
|                                                                |                                     |           | Total   |         | and        |  | Gas &       |        | Oil      |  |           |        |           |  | Corporate
|                                                                |                                     |           | Group   |         | Production |  | Power       |        | Products |  | Chemicals |        | and Other
|                                                                |                                     |           |         |         |            |  |             |        |          |  |           |        |          
|Sales                                                           |                                     |           |         |         |            |  |             |        |          |  |           |        |           |  |           |         |  |  |        |        |  |  |        |     
|                                                                | third parties                       |           |         | 149,146 |            |  |             | 13,468 |          |  |           | 15,991 |           |  |           | 104,002 |  |  |        | 15,205 |  |  |        | 480  |  
|                                                                | inter-segment                       |           |         |         |            |  |             | 14,326 |          |  |           | 496    |           |  |           | 2,280   |  |  |        | 1,102  |  |  |        |     |  
|                                                                |                                     |           |         |         |            |  |             |        |          |  |           |        |           |  |           |         |  |  |        |        |  |  |        |      |  
|Net proceeds                                                    |                                     |           |         |         |            |  | 27,794      |        |          |  | 16,487    |        |           |  | 106,282   |         |  |  | 16,307 |        |  |  | 480    |     
|                                                                |                                     |           |         |         |            |  |             |        |          |  |           |        |           |  |           |         |  |  |        |        |  |  |        |      |  
|Operating profit/(loss)                                         |                                     |           |         |         |            |  |             |        |          |  |           |        |           |  |           |         |  |  |        |        |  |  |        |     
|                                                                | Group companies                     |           |         | 20,641  |            |  |             | 17,681 |          |  |           | (360   | )         |  |           | 2,789   |  |  |        | 876    |  |  |        | (345 | )
|                                                                | Group share of associated companies |           |         | 3,859   |            |  |             | 2,007  |          |  |           | 646    |           |  |           | 990     |  |  |        | 240    |  |  |        | (24  | )
|                                                                |                                     |           | 24,500  |         |            |  | 19,688      |        |          |  | 286       |        |           |  | 3,779     |         |  |  | 1,116  |        |  |  | (369   | )   
|Interest and other income                                       |                                     |           | 974     |         |            |  | 15          |        |          |  | 83        |        |           |  | 92        |         |  |  | 6      |        |  |  | 778    |     
|Interest expense                                                |                                     |           | 1,324   |         |            |  |             |        |          |  |           |        |           |  |           |         |  |  |        |        |  |  | 1,324  |     
|Currency exchange gains/(losses)                                |                                     |           | (114    | )       |            |  | 8           |        |          |  | 6         |        |           |  | (35       | )       |  |  | 9      |        |  |  | (102   | )   
|Taxation                                                        |                                     |           | 11,273  |         |            |  | 9,652       |        |          |  | 263       |        |           |  | 1,399     |         |  |  | 139    |        |  |  | (180   | )   
|Income applicable to minority interests                         |                                     |           | 44      |         |            |  |             |        |          |  |           |        |           |  |           |         |  |  |        |        |  |  |        |     
|                                                                |                                     |           |         |         |            |  |             |        |          |  |           |        |           |  |           |         |  |  |        |        |  |  |        |      |  
|Net income                                                      |                                     |           | 12,719  |         |            |  | 10,059      |        |          |  | 112       |        |           |  | 2,437     |         |  |  | 992    |        |  |  | (837   | )   
|                                                                |                                     |           |         |         |            |  |             |        |          |  |           |        |           |  |           |         |  |  |        |        |  |  |        |      |  
|Total assets at December 31                                     |                                     |           | 122,498 |         |            |  | 36,155      |        |          |  | 17,767    |        |           |  | 41,860    |         |  |  | 12,989 |        |  |  | 13,727 |     
|Investments in associated companies at December 31              |                                     |           | 18,648  |         |            |  | 4,225       |        |          |  | 3,929     |        |           |  | 6,527     |         |  |  | 3,899  |        |  |  | 68     |     
|Capital expenditure and new investments in associated companies |                                     |           | 7,370   |         |            |  | 3,994       |        |          |  | 769       |        |           |  | 1,456     |         |  |  | 977    |        |  |  | 174    |     
|Depreciation, depletion and amortisation charge                 |                                     |           | 7,885   |         |            |  | 3,569       |        |          |  | 841       |        |           |  | 2,590     |         |  |  | 724    |        |  |  | 161    |     
|                                                                | of which: Impairment                |           |         | 1,785   |            |  |             | 105    |          |  |           | 697    |           |  |           | 824     |  |  |        | 104    |  |  |        | 55   |  
|                                                                |                                     |           |         |         |            |  |             |        |          |  |           |        |           |  |           |         |  |  |        |        |  |  |        |      |  

Royal Dutch/Shell Group of Companies   G29



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##### Table of Contents



25 Oil and gas exploration and production activities

(a)  Capitalised costs

The aggregate amount of tangible and intangible fixed assets of Group companies
relating to oil and gas exploration and production activities and the aggregate
amount of the related depreciation, depletion and amortisation at December 31
are shown in the table below:

|                                 |  |           |        |      |  |      |        |  |  |  |        | 
|-------------------------------- |  | --------- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                                 |  | $ million
|                                 |  |          
|                                 |  | 2002      |        | 2001 |  | 2000
|                                 |  |           |        |      |  |     
|Cost                             |  |           |        |      |  |      |        |  |  |  |        | 
|Proved properties                |  |           | 85,057 |      |  |      | 63,185 |  |  |  | 57,136 | 
|Unproved properties              |  |           | 4,564  |      |  |      | 2,531  |  |  |  | 2,308  | 
|Support equipment and facilities |  |           | 4,031  |      |  |      | 3,082  |  |  |  | 1,586  | 
|                                 |  |           |        |      |  |      |        |  |  |  |        | 
|                                 |  |           | 93,652 |      |  |      | 68,798 |  |  |  | 61,030 | 
|                                 |  |           |        |      |  |      |        |  |  |  |        | 
|Depreciation                     |  |           |        |      |  |      |        |  |  |  |        | 
|Proved properties                |  |           | 44,452 |      |  |      | 37,246 |  |  |  | 34,672 | 
|Unproved properties              |  |           | 325    |      |  |      | 212    |  |  |  | 141    | 
|Support equipment and facilities |  |           | 1,592  |      |  |      | 1,145  |  |  |  | 1,033  | 
|                                 |  |           |        |      |  |      |        |  |  |  |        | 
|                                 |  |           | 46,369 |      |  |      | 38,603 |  |  |  | 35,846 | 
|                                 |  |           |        |      |  |      |        |  |  |  |        | 
|Net capitalised costs            |  |           | 47,283 |      |  |      | 30,195 |  |  |  | 25,184 | 
|                                 |  |           |        |      |  |      |        |  |  |  |        | 

The Group share of associated companies net
capitalised costswas $3,221 million
at December 31, 2002 (2001: $2,966 million;
2000: $3,831 million).

(b)  Costs incurred

Costs incurred by Group companies during the year in oil and gas property
acquisition, exploration and development activities, whether capitalised or
charged to income currently, are shown in the table below. Development costs
exclude costs of acquiring support equipment and facilities, but include
depreciation thereon.

|                                 |          |           |                    |       |                    |  |       |    |       |  |       |     |  |  |       |     |  |  |       |       | 
|-------------------------------- | -------- | --------- | ------------------ | ----- | ------------------ |  | ----- | -- | ----- |  | ----- | --- |  |  | ----- | --- |  |  | ----- | ----- | 
|2002                             |          | $ million
|                                 |          |          
|                                 |          |           | Eastern Hemisphere |       | Western Hemisphere |  | Total
|                                 |          |           |                    |       |                    |  |      
|                                 |          |           | Europe             |       | Other              |  | USA   |    | Other |  |       |     | 
|Acquisition of properties
Proved |          |           | 4,119              |       |                    |  | 106   |    |       |  | 565   |     |  |  | 801   |     |  |  | 5,591 |      
|                                 | Unproved |           |                    | 1,350 |                    |  |       | 56 |       |  |       | 368 |  |  |       | 412 |  |  |       | 2,186 | 
|Exploration                      |          |           | 191                |       |                    |  | 468   |    |       |  | 328   |     |  |  | 182   |     |  |  | 1,169 |      
|Development                      |          |           | 1,876              |       |                    |  | 2,310 |    |       |  | 1,520 |     |  |  | 1,349 |     |  |  | 7,055 |      
|                                 |          |           |                    |       |                    |  |       |    |       |  |       |     |  |  |       |     |  |  |       |      

|                          |          |           |                    |    |                    |  |       |       |       |  |       |     |  |  |       |     |   |  |       |       | 
|------------------------- | -------- | --------- | ------------------ | -- | ------------------ |  | ----- | ----- | ----- |  | ----- | --- |  |  | ----- | --- | - |  | ----- | ----- | 
|2001                      |          | $ million
|                          |          |          
|                          |          |           | Eastern Hemisphere |    | Western Hemisphere |  | Total
|                          |          |           |                    |    |                    |  |      
|                          |          |           | Europe             |    | Other              |  | USA   |       | Other |  |       |     | 
|Acquisition of properties |          |           |                    |    |                    |  |       |       |       |  |       |     |  |  |       |     |   |  |       |      
|                          | Proved   |           |                    | 5  |                    |  |       | 1,069 |       |  |       | 290 |  |  |       | 9   |   |  |       | 1,373 | 
|                          | Unproved |           |                    | 23 |                    |  |       | 70    |       |  |       | 157 |  |  |       | (19 | ) |  |       | 231   | 
|Exploration               |          |           | 114                |    |                    |  | 581   |       |       |  | 303   |     |  |  | 203   |     |   |  | 1,201 |      
|Development               |          |           | 1,047              |    |                    |  | 1,535 |       |       |  | 1,214 |     |  |  | 1,077 |     |   |  | 4,873 |      
|                          |          |           |                    |    |                    |  |       |       |       |  |       |     |  |  |       |     |   |  |       |       | 

|                                 |          |           |                    |   |                    |  |       |     |       |  |     |    |  |  |     |    |  |  |       |     | 
|-------------------------------- | -------- | --------- | ------------------ | - | ------------------ |  | ----- | --- | ----- |  | --- | -- |  |  | --- | -- |  |  | ----- | --- | 
|2000                             |          | $ million
|                                 |          |          
|                                 |          |           | Eastern Hemisphere |   | Western Hemisphere |  | Total
|                                 |          |           |                    |   |                    |  |      
|                                 |          |           | Europe             |   | Other              |  | USA   |     | Other |  |     |    | 
|                                 |          |           |                    |   |                    |  |       |     |       |  |     |    | 
|Acquisition of properties
Proved |          |           | 1                  |   |                    |  |      |     |       |  | 69  |    |  |  |    |    |  |  | 70    |    
|                                 | Unproved |           |                    | 4 |                    |  |       | 118 |       |  |     | 34 |  |  |     | 57 |  |  |       | 213 | 
|Exploration                      |          |           | 79                 |   |                    |  | 421   |     |       |  | 305 |    |  |  | 115 |    |  |  | 920   |    
|Development                      |          |           | 912                |   |                    |  | 1,063 |     |       |  | 809 |    |  |  | 575 |    |  |  | 3,359 |    
|                                 |          |           |                    |   |                    |  |       |     |       |  |     |    |  |  |     |    |  |  |       |    

The Group share of associated companies
costs incurredwas $551 million in 2002
(2001: $415 million; 2000: $227 million).

G30   Royal Dutch/Shell Group of Companies



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##### Table of Contents



(c) Earnings

Earnings of Group companies from exploration and production activities are
given in the table below. Certain purchases of traded product are netted into
sales.

|                                         |               |           |                    |       |                    |  |       |       |       |  |       |       |  |  |       |     |  |  |        |        | 
|---------------------------------------- | ------------- | --------- | ------------------ | ----- | ------------------ |  | ----- | ----- | ----- |  | ----- | ----- |  |  | ----- | --- |  |  | ------ | ------ | 
|2002                                     |               | $ million
|                                         |               |          
|                                         |               |           | Eastern Hemisphere |       | Western Hemisphere |  | Total
|                                         |               |           |                    |       |                    |  |      
|                                         |               |           | Europe             |       | Other              |  | USA   |       | Other |  |       |       | 
|                                         |               |           |                    |       |                    |  |       |       |       |  |       |       | 
|Sales                                    |               |           |                    |       |                    |  |       |       |       |  |       |       |  |  |       |     |  |  |        |       
|                                         | third parties |           |                    | 5,536 |                    |  |       | 2,806 |       |  |       | 1,997 |  |  |       | 946 |  |  |        | 11,285 | 
|                                         | intra-group   |           |                    | 4,113 |                    |  |       | 6,811 |       |  |       | 2,863 |  |  |       | 532 |  |  |        | 14,319 | 
|                                         |               |           |                    |       |                    |  |       |       |       |  |       |       |  |  |       |     |  |  |        |        | 
|Net proceeds                             |               |           | 9,649              |       |                    |  | 9,617 |       |       |  | 4,860 |       |  |  | 1,478 |     |  |  | 25,604 |       
|Production
costsa                        |               |           | 1,826              |       |                    |  | 2,746 |       |       |  | 589   |       |  |  | 451   |     |  |  | 5,612  |       
|Exploration expense                      |               |           | 171                |       |                    |  | 355   |       |       |  | 222   |       |  |  | 167   |     |  |  | 915    |       
|Depreciation,
depletion and
amortisation |               |           | 2,209              |       |                    |  | 1,620 |       |       |  | 1,351 |       |  |  | 320   |     |  |  | 5,500  |       
|Other income/(costs)                     |               |           | (145               | )     |                    |  | (371  | )     |       |  | (330  | )     |  |  | (132  | )   |  |  | (978   | )     
|                                         |               |           |                    |       |                    |  |       |       |       |  |       |       |  |  |       |     |  |  |        |        | 
|Earnings before
taxation                 |               |           | 5,298              |       |                    |  | 4,525 |       |       |  | 2,368 |       |  |  | 408   |     |  |  | 12,599 |       
|Taxation                                 |               |           | 2,407              |       |                    |  | 2,822 |       |       |  | 801   |       |  |  | 115   |     |  |  | 6,145  |       
|                                         |               |           |                    |       |                    |  |       |       |       |  |       |       |  |  |       |     |  |  |        |        | 
|Earnings from
operations                 |               |           | 2,891              |       |                    |  | 1,703 |       |       |  | 1,567 |       |  |  | 293   |     |  |  | 6,454  |       
|                                         |               |           |                    |       |                    |  |       |       |       |  |       |       |  |  |       |     |  |  |        |        | 
|                                        
|                                        
|2001                                     |               | $ million
|                                         |               |          
|                                         |               |           | Eastern Hemisphere |       | Western Hemisphere |  | Total
|                                         |               |           |                    |       |                    |  |      
|                                         |               |           | Europe             |       | Other              |  | USA   |       | Other |  |       |       | 
|                                         |               |           |                    |       |                    |  |       |       |       |  |       |       | 
|Sales                                    |               |           |                    |       |                    |  |       |       |       |  |       |       |  |  |       |     |  |  |        |       
|                                         | third parties |           |                    | 4,971 |                    |  |       | 2,433 |       |  |       | 2,771 |  |  |       | 916 |  |  |        | 11,091 | 
|                                         | intra-group   |           |                    | 3,723 |                    |  |       | 7,131 |       |  |       | 2,306 |  |  |       | 791 |  |  |        | 13,951 | 
|                                         |               |           |                    |       |                    |  |       |       |       |  |       |       |  |  |       |     |  |  |        |        | 
|Net proceeds                             |               |           | 8,694              |       |                    |  | 9,564 |       |       |  | 5,077 |       |  |  | 1,707 |     |  |  | 25,042 |       
|Production costsa                        |               |           | 1,276              |       |                    |  | 2,588 |       |       |  | 496   |       |  |  | 509   |     |  |  | 4,869  |       
|Exploration expense                      |               |           | 93                 |       |                    |  | 353   |       |       |  | 268   |       |  |  | 143   |     |  |  | 857    |       
|Depreciation,
depletion and
amortisation |               |           | 1,271              |       |                    |  | 1,247 |       |       |  | 1,072 |       |  |  | 244   |     |  |  | 3,834  |       
|Other income/(costs)                     |               |           | (395               | )     |                    |  | (231  | )     |       |  | (305  | )     |  |  | (247  | )   |  |  | (1,178 | )     
|                                         |               |           |                    |       |                    |  |       |       |       |  |       |       |  |  |       |     |  |  |        |        | 
|Earnings before
taxation                 |               |           | 5,659              |       |                    |  | 5,145 |       |       |  | 2,936 |       |  |  | 564   |     |  |  | 14,304 |       
|Taxation                                 |               |           | 2,483              |       |                    |  | 3,307 |       |       |  | 1,035 |       |  |  | 201   |     |  |  | 7,026  |       
|                                         |               |           |                    |       |                    |  |       |       |       |  |       |       |  |  |       |     |  |  |        |        | 
|Earnings from
operations                 |               |           | 3,176              |       |                    |  | 1,838 |       |       |  | 1,901 |       |  |  | 363   |     |  |  | 7,278  |       
|                                         |               |           |                    |       |                    |  |       |       |       |  |       |       |  |  |       |     |  |  |        |        | 

Royal Dutch/Shell Group of Companies   G31



---



##### Table of Contents



25 Oil and gas exploration and production activities

(c)  Earningscontinued

|                                         |               |           |                    |       |                    |       |        |       |       |  |       |       |  |  |       |       |  |  |        |        | 
|---------------------------------------- | ------------- | --------- | ------------------ | ----- | ------------------ | ----- | ------ | ----- | ----- |  | ----- | ----- |  |  | ----- | ----- |  |  | ------ | ------ | 
|2000                                     |               | $ million
|                                         |               |          
|                                         |               |           | Eastern Hemisphere |       | Western Hemisphere | Total
|                                         |               |           |                    |       |                    |      
|                                         |               |           | Europe             |       | Other              |       | USA    |       | Other |  |       |       | 
|                                         |               |           |                    |       |                    |       |        |       |       |  |       |       | 
|Sales                                    |               |           |                    |       |                    |       |        |       |       |  |       |       |  |  |       |       |  |  |        |       
|                                         | third parties |           |                    | 5,378 |                    |       |        | 2,296 |       |  |       | 3,199 |  |  |       | 1,197 |  |  |        | 12,070 | 
|                                         | intra-group   |           |                    | 3,714 |                    |       |        | 7,763 |       |  |       | 2,165 |  |  |       | 666   |  |  |        | 14,308 | 
|                                         |               |           |                    |       |                    |       |        |       |       |  |       |       |  |  |       |       |  |  |        |        | 
|Net proceeds                             |               |           | 9,092              |       |                    |       | 10,059 |       |       |  | 5,364 |       |  |  | 1,863 |       |  |  | 26,378 |       
|Production costsa                        |               |           | 1,493              |       |                    |       | 2,695  |       |       |  | 427   |       |  |  | 538   |       |  |  | 5,153  |       
|Exploration expense                      |               |           | 89                 |       |                    |       | 399    |       |       |  | 190   |       |  |  | 75    |       |  |  | 753    |       
|Depreciation,
depletion and
amortisation |               |           | 1,429              |       |                    |       | 872    |       |       |  | 953   |       |  |  | 315   |       |  |  | 3,569  |       
|Other income/(costs)                     |               |           | 207                |       |                    |       | 530    |       |       |  | 378   |       |  |  | (314  | )     |  |  | 801    |       
|                                         |               |           |                    |       |                    |       |        |       |       |  |       |       |  |  |       |       |  |  |        |        | 
|Earnings before
taxation                 |               |           | 6,288              |       |                    |       | 6,623  |       |       |  | 4,172 |       |  |  | 621   |       |  |  | 17,704 |       
|Taxation                                 |               |           | 2,792              |       |                    |       | 4,266  |       |       |  | 1,404 |       |  |  | 173   |       |  |  | 8,635  |       
|                                         |               |           |                    |       |                    |       |        |       |       |  |       |       |  |  |       |       |  |  |        |        | 
|Earnings from
operations                 |               |           | 3,496              |       |                    |       | 2,357  |       |       |  | 2,768 |       |  |  | 448   |       |  |  | 9,069  |       
|                                         |               |           |                    |       |                    |       |        |       |       |  |       |       |  |  |       |       |  |  |        |        | 



---

|a |  | Includes certain royalties paid in cash
amounting to $1,600 million in 2002 (2001:
$1,605 million; 2000: $1,923 million).                                                                                      
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|  |  | The Group share of associated companies
earningswas $543 million in 2002 (2001: $745
million; 2000: $990 million) after deducting
taxation of $779 million in 2002 (2001: $787
million; 2000: $1,017 million).

26 Auditors remuneration

|                                                |  |           |    |      |  |      |    |  |  |  |    | 
|----------------------------------------------- |  | --------- | -- | ---- |  | ---- | -- |  |  |  | -- | 
|                                                |  | $ million
|                                                |  |          
|Remuneration of KPMG and PricewaterhouseCoopers |  | 2002      |    | 2001 |  | 2000
|                                                |  |           |    |      |  |     
|Audit fees                                      |  |           | 25 |      |  |      | 18 |  |  |  | 17 | 
|Fees for non-audit services                     |  |           | 35 |      |  |      | 32 |  |  |  | 47 | 
|                                                |  |           |    |      |  |      |    |  |  |  |    | 

27 Contingencies and litigation

Contingent liabilities of Group companies arising from guarantees related to
obligations of non-Group companies amounted to $4.1 billion at December 31,
2002 (2001: $3.2 billion). An analysis of the guarantees outstanding at
December 31, 2002 is given in the following table:

|                             |  |           |     | 
|---------------------------- |  | --------- | --- | 
|                             |  | $ billion
|                             |  |          
|In respect of debt           |  |           | 2.1 | 
|In respect of customs duties |  |           | 1.0 | 
|Other                        |  |           | 1.0 | 
|                             |  |           |     | 
|                             |  |           | 4.1 | 
|                             |  |           |     | 

Guarantees in respect of debt include $1.1 billion that expire by 2005 relating
to project finance from a syndicate of banks to an associated company and $0.7
billion, joint and several, relating to project finance from a bank to a joint
venture expiring upon completion of the loan repayments in 2014. Guarantees in
respect of customs duties mainly relate to a cross guarantee, renewable
annually, for amounts payable by industry participants in a western European
country.

Group companies are subject to a number of other loss contingencies arising out
of litigation and claims brought by governmental and private parties. In the
judgement of the Directors of the Group Holding Companies no losses, in excess
of provisions made, which are material in relation to the Group financial
position are likely to arise in respect of the foregoing matters, although
their occurrence may have a significant effect on periodic results.

G32   Royal Dutch/Shell Group of Companies



---



##### Table of Contents



The operations and earnings of Group companies continue, from time to time, to
be affected to varying degrees by political, legislative, fiscal and regulatory
developments, including those relating to environmental protection, in the
countries in which they operate. The industries in which Group companies are
engaged are also subject to physical risks of various types. The nature and
frequency of these developments and events, not all of which are covered by
insurance, as well as their effect on future operations and earnings, are
unpredictable.

28 Financial instruments

Group companies, in the normal course of business, use various types of
financial instruments which expose the Group to market or credit risk. Group
companies have procedures and policies in place to limit the amount of credit
exposure to any counterparty or market. These procedures and the broad
geographical spread of Group companies activities limit the Groups exposure
to concentrations of credit or market risk.

Some Group companies enter into derivatives such as interest rate swaps/forward
rate agreements to manage interest rate exposure. The financing of most
Operating Companies is structured on a floating-rate basis and, except in
special cases, further interest rate risk management is discouraged. Foreign
exchange derivatives, such as forward exchange contracts and currency
swaps/options, are used by some Group companies to manage foreign exchange
risk. Commodity swaps, options and futures are used to manage price and timing
risks mainly involving crude oil, natural gas and oil products.

The estimated fair value and carrying amount of derivatives held by Group
companies at December 31 is as follows:

|                                                      |  |           |     |      |  |  |    | 
|----------------------------------------------------- |  | --------- | --- | ---- |  |  | -- | 
|                                                      |  | $ million
|                                                      |  |          
|                                                      |  | 2002      |     | 2001
|                                                      |  |           |     |     
|Interest rate swaps/forward rate agreements           |  |           | 169 |      |  |  | 18 | 
|Forward exchange contracts and currency swaps/options |  |           | (88 | )    |  |  | 21 | 
|Commodity swaps, options and futures                  |  |           | 119 |      |  |  | 17 | 
|                                                      |  |           |     |      |  |  |    | 
|                                                      |  |           | 200 |      |  |  | 56 | 
|                                                      |  |           |     |      |  |  |    | 

Pricing and delivery conditions contained within certain contracts for the sale
and delivery of own natural gas production from the UK North Sea are not solely
based on hydrocarbon-related market prices. Such pricing, which is different
from all other similar contracts for western European production volumes, could
be interpreted to require fair value treatment under FAS 133; however, fair
value treatment has not been applied in order to report all contracts in Europe
on a consistent basis. Applying FAS 133 accounting to these contracts would
have had an insignificant effect on the Groups 2002 net income.

Other financial instruments in the Statement of Assets and Liabilities include
fixed assets: investments  securities, trade receivables, short-term
securities, cash and cash equivalents, short and long-term debt, and assets and
liabilities in respect of risk management activities. The estimated fair values
of these instruments approximate their carrying amounts.

New US accounting guidance EITF Issue No. 0203 (Issues Involved in
Accounting for Derivative Contracts Held for Trading Purposes and Contracts
Involved in Energy Trading and Risk Management Activities) requires that
certain energy trading contracts are no longer reported at fair value unless
they qualify as derivatives under FAS 133. This has applied from October 26,
2002 for new contracts and from January 1, 2003 for other contracts; the change
on January 1, 2003 will not have a significant effect on the Groups Financial
Statements. EITF 0203 further requires that gains and losses on all
derivative instruments within the scope of FAS 133 be shown net in the
Statement of Income if the derivative instruments are held for trading
purposes. This will be applied by the Group from 2003 and the impact is under
review.

Royal Dutch/Shell Group of Companies   G33



---



##### Table of Contents









Supplementary Information  Oil and Gas

Reserves

Net quantities of proved oil and gas reserves are shown in the tables on this
page and pages G35 and G36. Proved reserves are the estimated quantities of oil
and gas which geological and engineering data demonstrate with reasonable
certainty to be recoverable in future years from known reservoirs under
existing economic and operating conditions. Proved developed reserves are those
reserves which can be expected to be recovered through existing wells with
existing equipment and operating methods. The reserves reported exclude volumes
attributable to oil and gas discoveries which are not at present considered
proved. Such reserves will be included when technical, fiscal and other
conditions allow them to be economically developed and produced.

Proved reserves are shown net of any quantities of crude oil or natural gas
that are expected to be taken by others as royalties in kind but do not exclude
certain quantities related to royalties expected to be paid in cash or those
related to fixed margin contracts. Proved reserves include certain quantities
of crude oil or natural gas which will be produced under arrangements which
involve Group companies in upstream risks and rewards but do not transfer title
of the product to those companies.

Oil and gas reserves cannot be measured exactly since estimation of reserves
involves subjective judgement and arbitrary determinations. Estimates remain
subject to revision.

Crude oil and natural gas liquids

Group companies estimated net proved reserves of crude oil and natural gas
liquids at the end of the year, their share of the net proved reserves of
associated companies at the end of the year, and the changes in such reserves
during the year are set out below.



|                                                                |  |                 |       |            |  |       |       |       |  |  |      |   |  |  |     |   |  |  |        |  
|--------------------------------------------------------------- |  | --------------- | ----- | ---------- |  | ----- | ----- | ----- |  |  | ---- | - |  |  | --- | - |  |  | ------ | -
|Proved developed and undeveloped reserves                       |  | million barrels
|                                                                |  |                
|                                                                |  | 2002           
|                                                                |  |                
|                                                                |  | Eastern         |       | Western    |  |       |       |      
|                                                                |  | Hemisphere      |       | Hemisphere |  | Total
|                                                                |  |                 |       |            |  |      
|                                                                |  | Europe          |       | Other      |  | USA   |       | Other |  |  |      |  
|                                                                |  |                 |       |            |  |       |       |       |  |  |      |  
|Group companies                                                 |  |                 |       |            |  |       |       |       |  |  |      |   |  |  |     |   |  |  |        |  
|At January 1                                                    |  |                 | 1,105 |            |  |       | 6,188 |       |  |  | 675  |   |  |  | 576 |   |  |  | 8,544  |  
|Revisions and reclassifications                                 |  |                 | 103   |            |  |       | (170  | )     |  |  | 77   |   |  |  | 16  |   |  |  | 26     |  
|Improved recovery                                               |  |                 | 15    |            |  |       | 69    |       |  |  | 51   |   |  |  |    |   |  |  | 135    |  
|Extensions and discoveries                                      |  |                 |      |            |  |       | 389   |       |  |  | 33   |   |  |  | 1   |   |  |  | 423    |  
|Purchases of minerals in place                                  |  |                 | 667   |            |  |       |      |       |  |  | 7    |   |  |  | 102 |   |  |  | 776    |  
|Sales of minerals in place                                      |  |                 | (1    | )          |  |       | (101  | )     |  |  | (3   | ) |  |  |    |   |  |  | (105   | )
|Production                                                      |  |                 | (254  | )          |  |       | (361  | )     |  |  | (120 | ) |  |  | (38 | ) |  |  | (773   | )
|                                                                |  |                 |       |            |  |       |       |       |  |  |      |   |  |  |     |   |  |  |        |  
|At December 31                                                  |  |                 | 1,635 |            |  |       | 6,014 |       |  |  | 720  |   |  |  | 657 |   |  |  | 9,026  |  
|                                                                |  |                 |       |            |  |       |       |       |  |  |      |   |  |  |     |   |  |  |        |  
|Group share of
associated companies                             |  |                 |       |            |  |       |       |       |  |  |      |   |  |  |     |   |  |  |        |  
|At January 1                                                    |  |                 | 1     |            |  |       | 568   |       |  |  | 356  |   |  |  |    |   |  |  | 925    |  
|Revisions and reclassifications                                 |  |                 | 1     |            |  |       | 43    |       |  |  | 65   |   |  |  |    |   |  |  | 109    |  
|Improved recovery                                               |  |                 |      |            |  |       | 6     |       |  |  |     |   |  |  |    |   |  |  | 6      |  
|Extensions and discoveries                                      |  |                 |      |            |  |       | 7     |       |  |  | 33   |   |  |  |    |   |  |  | 40     |  
|Purchases of minerals in place                                  |  |                 |      |            |  |       | 121   |       |  |  |     |   |  |  |    |   |  |  | 121    |  
|Sales of minerals in place                                      |  |                 |      |            |  |       | (1    | )     |  |  |     |   |  |  |    |   |  |  | (1     | )
|Production                                                      |  |                 |      |            |  |       | (52   | )     |  |  | (41  | ) |  |  |    |   |  |  | (93    | )
|                                                                |  |                 |       |            |  |       |       |       |  |  |      |   |  |  |     |   |  |  |        |  
|At December 31                                                  |  |                 | 2     |            |  |       | 692   |       |  |  | 413  |   |  |  |    |   |  |  | 1,107  |  
|                                                                |  |                 |       |            |  |       |       |       |  |  |      |   |  |  |     |   |  |  |        |  
|Total                                                           |  |                 |       |            |  |       |       |       |  |  |      |   |  |  |     |   |  |  | 10,133 |  
|                                                                |  |                 |       |            |  |       |       |       |  |  |      |   |  |  |     |   |  |  |        |  
|Minority interests share of
proved reserves of Group companies |  |                 |       |            |  |       |       |       |  |  |      |   |  |  |     |   |  |  |        |  
|At December 31                                                  |  |                 |      |            |  |       | 146   |       |  |  |     |   |  |  | 69  |   |  |  | 215    |  
|                                                                |  |                 |       |            |  |       |       |       |  |  |      |   |  |  |     |   |  |  |        |  
|Oil sandsa                                                      |  |                 |       |            |  |       |       |       |  |  |      |   |  |  |     |   |  |  |        |  
|                                                                |  |                 |       |            |  |       |       |       |  |  |      |   |  |  |     |   |  |  |        |  
|Group companies (before
deduction of minority interests)        |  |                 |       |            |  |       |       |       |  |  |      |   |  |  |     |   |  |  |        |  
|At December 31                                                  |  |                 |      |            |  |       |      |       |  |  |     |   |  |  | 600 |   |  |  | 600    |  
|                                                                |  |                 |       |            |  |       |       |       |  |  |      |   |  |  |     |   |  |  |        |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                                |  |                 |       |            |  |       |       |            |  |            |      |         |  |        |     |       |  |     |       |       |  |  |       |   |  |  |       |   |  |  |      |   |  |  |     |   |  |         |       |  
|--------------------------------------------------------------- |  | --------------- | ----- | ---------- |  | ----- | ----- | ---------- |  | ---------- | ---- | ------- |  | ------ | --- | ----- |  | --- | ----- | ----- |  |  | ----- | - |  |  | ----- | - |  |  | ---- | - |  |  | --- | - |  | ------- | ----- | -
|Proved developed and undeveloped reserves                       |  | million barrels
|                                                                |  |                
|                                                                |  | 2001            |       | 2000      
|                                                                |  |                 |       |           
|                                                                |  | Eastern         |       | Western    |  |       |       |            |  | Eastern    |      | Western |  |        |     |      
|                                                                |  | Hemisphere      |       | Hemisphere |  | Total |       | Hemisphere |  | Hemisphere |      | Total  
|                                                                |  |                 |       |            |  |       |       |            |  |            |      |        
|                                                                |  | Europe          |       | Other      |  | USA   |       | Other      |  |            |      |         |  | Europe |     | Other |  | USA |       | Other |  |  |       |  
|                                                                |  |                 |       |            |  |       |       |            |  |            |      |         |  |        |     |       |  |     |       |       |  |  |       |  
|Group companies                                                 |  |                 |       |            |  |       |       |            |  |            |      |         |  |        |     |       |  |     |       |       |  |  |       |   |  |  |       |   |  |  |      |   |  |  |     |   |  |         |       |  
|At January 1                                                    |  |                 | 1,173 |            |  |       | 6,276 |            |  |            | 611  |         |  |        | 610 |       |  |     | 8,670 |       |  |  | 1,330 |   |  |  | 6,143 |   |  |  | 578  |   |  |  | 458 |   |  |         | 8,509 |  
|Revisions and reclassifications                                 |  |                 | 47    |            |  |       | 130   |            |  |            | 31   |         |  |        | 17  |       |  |     | 225   |       |  |  | 81    |   |  |  | 210   |   |  |  | 15   |   |  |  | 99  |   |  |         | 405   |  
|Improved recovery                                               |  |                 | 67    |            |  |       | 51    |            |  |            |     |         |  |        |    |       |  |     | 118   |       |  |  | 45    |   |  |  | 143   |   |  |  |     |   |  |  | 91  |   |  |         | 279   |  
|Extensions and discoveries                                      |  |                 | 17    |            |  |       | 17    |            |  |            | 139  |         |  |        | 1   |       |  |     | 174   |       |  |  | 12    |   |  |  | 188   |   |  |  | 126  |   |  |  | 1   |   |  |         | 327   |  
|Purchases of minerals in place                                  |  |                 |      |            |  |       | 80    |            |  |            | 3    |         |  |        |    |       |  |     | 83    |       |  |  |      |   |  |  |      |   |  |  |     |   |  |  |    |   |  |         |      |  
|Sales of minerals in place                                      |  |                 |      |            |  |       |      |            |  |            | (1   | )       |  |        | (14 | )     |  |     | (15   | )     |  |  | (71   | ) |  |  | (44   | ) |  |  | (6   | ) |  |  |    |   |  |         | (121  | )
|Production                                                      |  |                 | (199  | )          |  |       | (366  | )          |  |            | (108 | )       |  |        | (38 | )     |  |     | (711  | )     |  |  | (224  | ) |  |  | (364  | ) |  |  | (102 | ) |  |  | (39 | ) |  |         | (729  | )
|                                                                |  |                 |       |            |  |       |       |            |  |            |      |         |  |        |     |       |  |     |       |       |  |  |       |   |  |  |       |   |  |  |      |   |  |  |     |   |  |         |       |  
|At December 31                                                  |  |                 | 1,105 |            |  |       | 6,188 |            |  |            | 675  |         |  |        | 576 |       |  |     | 8,544 |       |  |  | 1,173 |   |  |  | 6,276 |   |  |  | 611  |   |  |  | 610 |   |  |         | 8,670 |  
|                                                                |  |                 |       |            |  |       |       |            |  |            |      |         |  |        |     |       |  |     |       |       |  |  |       |   |  |  |       |   |  |  |      |   |  |  |     |   |  |         |       |  
|Group share of
associated companies                             |  |                 |       |            |  |       |       |            |  |            |      |         |  |        |     |       |  |     |       |       |  |  |       |   |  |  |       |   |  |  |      |   |  |  |     |   |  |         |       |  
|At January 1                                                    |  |                 | 1     |            |  |       | 639   |            |  |            | 441  |         |  |        |    |       |  |     | 1,081 |       |  |  | 1     |   |  |  | 448   |   |  |  | 817  |   |  |  |    |   |  |         | 1,266 |  
|Revisions and reclassifications                                 |  |                 |      |            |  |       | (43   | )          |  |            | (35  | )       |  |        |    |       |  |     | (78   | )     |  |  |      |   |  |  | 121   |   |  |  | (26  | ) |  |  |    |   |  |         | 95    |  
|Improved recovery                                               |  |                 |      |            |  |       | 12    |            |  |            | 1    |         |  |        |    |       |  |     | 13    |       |  |  |      |   |  |  | 17    |   |  |  | 2    |   |  |  |    |   |  |         | 19    |  
|Extensions and discoveries                                      |  |                 |      |            |  |       | 17    |            |  |            |     |         |  |        |    |       |  |     | 17    |       |  |  |      |   |  |  | 55    |   |  |  | 1    |   |  |  |    |   |  |         | 56    |  
|Purchases of minerals in place                                  |  |                 |      |            |  |       |      |            |  |            |     |         |  |        |    |       |  |     |      |       |  |  |      |   |  |  | 62    |   |  |  |     |   |  |  |    |   |  |         | 62    |  
|Sales of minerals in place                                      |  |                 |      |            |  |       |      |            |  |            | (9   | )       |  |        |    |       |  |     | (9    | )     |  |  |      |   |  |  | (12   | ) |  |  | (302 | ) |  |  |    |   |  |         | (314  | )
|Production                                                      |  |                 |      |            |  |       | (57   | )          |  |            | (42  | )       |  |        |    |       |  |     | (99   | )     |  |  |      |   |  |  | (52   | ) |  |  | (51  | ) |  |  |    |   |  |         | (103  | )
|                                                                |  |                 |       |            |  |       |       |            |  |            |      |         |  |        |     |       |  |     |       |       |  |  |       |   |  |  |       |   |  |  |      |   |  |  |     |   |  |         |       |  
|At December 31                                                  |  |                 | 1     |            |  |       | 568   |            |  |            | 356  |         |  |        |    |       |  |     | 925   |       |  |  | 1     |   |  |  | 639   |   |  |  | 441  |   |  |  |    |   |  |         | 1,081 |  
|                                                                |  |                 |       |            |  |       |       |            |  |            |      |         |  |        |     |       |  |     |       |       |  |  |       |   |  |  |       |   |  |  |      |   |  |  |     |   |  |         |       |  
|Total                                                           |  |                 |       |            |  |       |       |            |  |            |      |         |  |        |     |       |  |     | 9,469 |       |  |  |       |   |  |  |       |   |  |  |      |   |  |  |     |   |  |         | 9,751 |  
|                                                                |  |                 |       |            |  |       |       |            |  |            |      |         |  |        |     |       |  |     |       |       |  |  |       |   |  |  |       |   |  |  |      |   |  |  |     |   |  |         |       |  
|Minority interests share of
proved reserves of Group companies |  |                 |       |            |  |       |       |            |  |            |      |         |  |        |     |       |  |     |       |       |  |  |       |   |  |  |       |   |  |  |      |   |  |  |     |   |  |         |       |  
|At December 31                                                  |  |                 |      |            |  |       | 132   |            |  |            |     |         |  |        | 74  |       |  |     | 206   |       |  |  |      |   |  |  | 54    |   |  |  |     |   |  |  | 78  |   |  |         | 132   |  
|                                                                |  |                 |       |            |  |       |       |            |  |            |      |         |  |        |     |       |  |     |       |       |  |  |       |   |  |  |       |   |  |  |      |   |  |  |     |   |  |         |       |  
|Oil sandsa                                                      |  |                 |       |            |  |       |       |            |  |            |      |         |  |        |     |       |  |     |       |       |  |  |       |   |  |  |       |   |  |  |      |   |  |  |     |   |  | million
|                                                                |  |                 |       |            |  |       |       |            |  |            |      |         |  |        |     |       |  |     |       |       |  |  |       |   |  |  |       |   |  |  |      |   |  |  |     |   |  | barrels
|Group companies (before
deduction of minority interests)        |  |                 |       |            |  |       |       |            |  |            |      |         |  |        |     |       |  |     |       |       |  |  |       |   |  |  |       |   |  |  |      |   |  |  |     |   |  |         |       |  
|At December 31                                                  |  |                 |      |            |  |       |      |            |  |            |     |         |  |        | 600 |       |  |     | 600   |       |  |  |      |   |  |  |      |   |  |  |     |   |  |  | 600 |   |  |         | 600   |  
|                                                                |  |                 |       |            |  |       |       |            |  |            |      |         |  |        |     |       |  |     |       |       |  |  |       |   |  |  |       |   |  |  |      |   |  |  |     |   |  |         |       |  



---

|a |  | The oil sands reserves are not considered in the standardised measure of
discounted future cash flows for conventional oil and gas reserves, which is
found on page G36.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------





---



##### Table of Contents



Reserves
Crude oil and natural gas liquidscontinued

|                                    |  |                 |       |            |  |       |       |            |  |            |     |         |  |            |     |            |  |         |       |         |  |  |     |  |  |        |       |       |  |     |     |       |  |  |     |  |  |  |       |  |  |  |     |  |  |  |       |  |  |  |     |  |  |  |     |  |  |  |       | 
|----------------------------------- |  | --------------- | ----- | ---------- |  | ----- | ----- | ---------- |  | ---------- | --- | ------- |  | ---------- | --- | ---------- |  | ------- | ----- | ------- |  |  | --- |  |  | ------ | ----- | ----- |  | --- | --- | ----- |  |  | --- |  |  |  | ----- |  |  |  | --- |  |  |  | ----- |  |  |  | --- |  |  |  | --- |  |  |  | ----- | 
|Proved developed reserves           |  | million barrels
|                                    |  |                
|                                    |  | 2002            |       | 2001       |  | 2000 
|                                    |  |                 |       |            |  |      
|                                    |  | Eastern         |       | Western    |  |       |       |            |  | Eastern    |     | Western |  |            |     |            |  | Eastern |       | Western |  |  |     | 
|                                    |  | Hemisphere      |       | Hemisphere |  | Total |       | Hemisphere |  | Hemisphere |     | Total   |  | Hemisphere |     | Hemisphere |  | Total  
|                                    |  |                 |       |            |  |       |       |            |  |            |     |         |  |            |     |            |  |        
|                                    |  | Europe          |       | Other      |  | USA   |       | Other      |  |            |     |         |  | Europe     |     | Other      |  | USA     |       | Other   |  |  |     |  |  | Europe |       | Other |  | USA |     | Other |  |  |     | 
|                                    |  |                 |       |            |  |       |       |            |  |            |     |         |  |            |     |            |  |         |       |         |  |  |     |  |  |        |       |       |  |     |     |       |  |  |     | 
|Group companies                     |  |                 |       |            |  |       |       |            |  |            |     |         |  |            |     |            |  |         |       |         |  |  |     |  |  |        |       |       |  |     |     |       |  |  |     |  |  |  |       |  |  |  |     |  |  |  |       |  |  |  |     |  |  |  |     |  |  |  |       | 
|At January 1                        |  |                 | 787   |            |  |       | 2,275 |            |  |            | 429 |         |  |            | 243 |            |  |         | 3,734 |         |  |  | 872 |  |  |        | 2,332 |       |  |     | 351 |       |  |  | 257 |  |  |  | 3,812 |  |  |  | 916 |  |  |  | 2,505 |  |  |  | 340 |  |  |  | 274 |  |  |  | 4,035 | 
|At December 31                      |  |                 | 1,129 |            |  |       | 2,233 |            |  |            | 373 |         |  |            | 224 |            |  |         | 3,959 |         |  |  | 787 |  |  |        | 2,275 |       |  |     | 429 |       |  |  | 243 |  |  |  | 3,734 |  |  |  | 872 |  |  |  | 2,332 |  |  |  | 351 |  |  |  | 257 |  |  |  | 3,812 | 
|Group share of
associated companies |  |                 |       |            |  |       |       |            |  |            |     |         |  |            |     |            |  |         |       |         |  |  |     |  |  |        |       |       |  |     |     |       |  |  |     |  |  |  |       |  |  |  |     |  |  |  |       |  |  |  |     |  |  |  |     |  |  |  |       | 
|At January 1                        |  |                 | 1     |            |  |       | 267   |            |  |            | 330 |         |  |            |    |            |  |         | 598   |         |  |  | 1   |  |  |        | 292   |       |  |     | 364 |       |  |  |    |  |  |  | 657   |  |  |  | 1   |  |  |  | 213   |  |  |  | 638 |  |  |  |    |  |  |  | 852   | 
|At December 31                      |  |                 | 1     |            |  |       | 301   |            |  |            | 365 |         |  |            |    |            |  |         | 667   |         |  |  | 1   |  |  |        | 267   |       |  |     | 330 |       |  |  |    |  |  |  | 598   |  |  |  | 1   |  |  |  | 292   |  |  |  | 364 |  |  |  |    |  |  |  | 657   | 
|                                    |  |                 |       |            |  |       |       |            |  |            |     |         |  |            |     |            |  |         |       |         |  |  |     |  |  |        |       |       |  |     |     |       |  |  |     |  |  |  |       |  |  |  |     |  |  |  |       |  |  |  |     |  |  |  |     |  |  |  |       | 

Natural gas

Group companies estimated net proved reserves of natural gas at the end of the
year, their share of the net proved reserves of associated companies at the end
of the year, and the changes in such reserves during the year are set out
below.

These quantities have not been adjusted to standard heat content.



|                                                                |  |                                      |        |            |  |       |        |            |  |            |       |         |  |        |       |       |  |     |        |       |  |  |        |   |  |  |        |   |  |  |       |   |  |  |       |   |  |  |        |  
|--------------------------------------------------------------- |  | ------------------------------------ | ------ | ---------- |  | ----- | ------ | ---------- |  | ---------- | ----- | ------- |  | ------ | ----- | ----- |  | --- | ------ | ----- |  |  | ------ | - |  |  | ------ | - |  |  | ----- | - |  |  | ----- | - |  |  | ------ | -
|Proved developed and undeveloped reserves                       |  | thousand million standard cubic feet
|                                                                |  |                                     
|                                                                |  | 2002                                 |        | 2001      
|                                                                |  |                                      |        |           
|                                                                |  | Eastern                              |        | Western    |  |       |        |            |  | Eastern    |       | Western |  |        |       |      
|                                                                |  | Hemisphere                           |        | Hemisphere |  | Total |        | Hemisphere |  | Hemisphere |       | Total  
|                                                                |  |                                      |        |            |  |       |        |            |  |            |       |        
|                                                                |  | Europe                               |        | Other      |  | USA   |        | Other      |  |            |       |         |  | Europe |       | Other |  | USA |        | Other |  |  |        |  
|                                                                |  |                                      |        |            |  |       |        |            |  |            |       |         |  |        |       |       |  |     |        |       |  |  |        |  
|Group companies                                                 |  |                                      |        |            |  |       |        |            |  |            |       |         |  |        |       |       |  |     |        |       |  |  |        |   |  |  |        |   |  |  |       |   |  |  |       |   |  |  |        |  
|At January 1                                                    |  |                                      | 23,722 |            |  |       | 20,080 |            |  |            | 3,694 |         |  |        | 3,117 |       |  |     | 50,613 |       |  |  | 23,801 |   |  |  | 20,132 |   |  |  | 3,403 |   |  |  | 3,506 |   |  |  | 50,842 |  
|Revisions and reclassifications                                 |  |                                      | 52     |            |  |       | (1,064 | )          |  |            | 162   |         |  |        | (103  | )     |  |     | (953   | )     |  |  | 1,006  |   |  |  | (777   | ) |  |  | 141   |   |  |  | (289  | ) |  |  | 81     |  
|Improved recovery                                               |  |                                      | 75     |            |  |       | 150    |            |  |            | 20    |         |  |        |      |       |  |     | 245    |       |  |  | 38     |   |  |  | 266    |   |  |  |      |   |  |  |      |   |  |  | 304    |  
|Extensions and discoveries                                      |  |                                      | 29     |            |  |       |       |            |  |            | 411   |         |  |        | 12    |       |  |     | 452    |       |  |  | 214    |   |  |  | 103    |   |  |  | 385   |   |  |  | 139   |   |  |  | 841    |  
|Purchases of minerals in place                                  |  |                                      | 1,074  |            |  |       |       |            |  |            | 208   |         |  |        | 59    |       |  |     | 1,341  |       |  |  |       |   |  |  | 1,247  |   |  |  | 355   |   |  |  | 12    |   |  |  | 1,614  |  
|Sales of minerals in place                                      |  |                                      | (5     | )          |  |       | (236   | )          |  |            | (10   | )       |  |        |      |       |  |     | (251   | )     |  |  |       |   |  |  |       |   |  |  | (9    | ) |  |  | (10   | ) |  |  | (19    | )
|Production                                                      |  |                                      | (1,331 | )          |  |       | (1,019 | )          |  |            | (611  | )       |  |        | (246  | )     |  |     | (3,207 | )     |  |  | (1,337 | ) |  |  | (891   | ) |  |  | (581  | ) |  |  | (241  | ) |  |  | (3,050 | )
|                                                                |  |                                      |        |            |  |       |        |            |  |            |       |         |  |        |       |       |  |     |        |       |  |  |        |   |  |  |        |   |  |  |       |   |  |  |       |   |  |  |        |  
|At December 31                                                  |  |                                      | 23,616 |            |  |       | 17,911 |            |  |            | 3,874 |         |  |        | 2,839 |       |  |     | 48,240 |       |  |  | 23,722 |   |  |  | 20,080 |   |  |  | 3,694 |   |  |  | 3,117 |   |  |  | 50,613 |  
|                                                                |  |                                      |        |            |  |       |        |            |  |            |       |         |  |        |       |       |  |     |        |       |  |  |        |   |  |  |        |   |  |  |       |   |  |  |       |   |  |  |        |  
|Group share of
associated companies                             |  |                                      |        |            |  |       |        |            |  |            |       |         |  |        |       |       |  |     |        |       |  |  |        |   |  |  |        |   |  |  |       |   |  |  |       |   |  |  |        |  
|At January 1                                                    |  |                                      | 48     |            |  |       | 5,153  |            |  |            | 15    |         |  |        |      |       |  |     | 5,216  |       |  |  | 56     |   |  |  | 5,299  |   |  |  | 86    |   |  |  |      |   |  |  | 5,441  |  
|Revisions and reclassifications                                 |  |                                      | 1      |            |  |       | 157    |            |  |            | 7     |         |  |        |      |       |  |     | 165    |       |  |  | (4     | ) |  |  | 68     |   |  |  | (29   | ) |  |  |      |   |  |  | 35     |  
|Improved recovery                                               |  |                                      |       |            |  |       | 8      |            |  |            |      |         |  |        |      |       |  |     | 8      |       |  |  |       |   |  |  | 17     |   |  |  |      |   |  |  |      |   |  |  | 17     |  
|Extensions and discoveries                                      |  |                                      | 3      |            |  |       | 37     |            |  |            | 1     |         |  |        |      |       |  |     | 41     |       |  |  | 3      |   |  |  | 115    |   |  |  |      |   |  |  |      |   |  |  | 118    |  
|Purchases of minerals in place                                  |  |                                      |       |            |  |       |       |            |  |            |      |         |  |        |      |       |  |     |       |       |  |  |       |   |  |  | 64     |   |  |  |      |   |  |  |      |   |  |  | 64     |  
|Sales of minerals in place                                      |  |                                      |       |            |  |       |       |            |  |            |      |         |  |        |      |       |  |     |       |       |  |  |       |   |  |  | (181   | ) |  |  | (40   | ) |  |  |      |   |  |  | (221   | )
|Production                                                      |  |                                      | (8     | )          |  |       | (222   | )          |  |            | (2    | )       |  |        |      |       |  |     | (232   | )     |  |  | (7     | ) |  |  | (229   | ) |  |  | (2    | ) |  |  |      |   |  |  | (238   | )
|                                                                |  |                                      |        |            |  |       |        |            |  |            |       |         |  |        |       |       |  |     |        |       |  |  |        |   |  |  |        |   |  |  |       |   |  |  |       |   |  |  |        |  
|At December 31                                                  |  |                                      | 44     |            |  |       | 5,133  |            |  |            | 21    |         |  |        |      |       |  |     | 5,198  |       |  |  | 48     |   |  |  | 5,153  |   |  |  | 15    |   |  |  |      |   |  |  | 5,216  |  
|                                                                |  |                                      |        |            |  |       |        |            |  |            |       |         |  |        |       |       |  |     |        |       |  |  |        |   |  |  |        |   |  |  |       |   |  |  |       |   |  |  |        |  
|Total                                                           |  |                                      |        |            |  |       |        |            |  |            |       |         |  |        |       |       |  |     | 53,438 |       |  |  |        |   |  |  |        |   |  |  |       |   |  |  |       |   |  |  | 55,829 |  
|                                                                |  |                                      |        |            |  |       |        |            |  |            |       |         |  |        |       |       |  |     |        |       |  |  |        |   |  |  |        |   |  |  |       |   |  |  |       |   |  |  |        |  
|Minority interests share
of proved reserves of
Group companies |  |                                      |        |            |  |       |        |            |  |            |       |         |  |        |       |       |  |     |        |       |  |  |        |   |  |  |        |   |  |  |       |   |  |  |       |   |  |  |        |  
|At December 31                                                  |  |                                      |       |            |  |       | 207    |            |  |            |      |         |  |        | 490   |       |  |     | 697    |       |  |  |       |   |  |  | 287    |   |  |  |      |   |  |  | 555   |   |  |  | 842    |  
|                                                                |  |                                      |        |            |  |       |        |            |  |            |       |         |  |        |       |       |  |     |        |       |  |  |        |   |  |  |        |   |  |  |       |   |  |  |       |   |  |  |        |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                                |  |                                      |        |            |  |       |        |       |  |  |       |   |  |  |       |   |  |  |        |  
|--------------------------------------------------------------- |  | ------------------------------------ | ------ | ---------- |  | ----- | ------ | ----- |  |  | ----- | - |  |  | ----- | - |  |  | ------ | -
|Proved developed and undeveloped reserves                       |  | thousand million standard cubic feet
|                                                                |  |                                     
|                                                                |  | 2000                                
|                                                                |  |                                     
|                                                                |  | Eastern                              |        | Western    |  |       |        |      
|                                                                |  | Hemisphere                           |        | Hemisphere |  | Total
|                                                                |  |                                      |        |            |  |      
|                                                                |  | Europe                               |        | Other      |  | USA   |        | Other |  |  |       |  
|                                                                |  |                                      |        |            |  |       |        |       |  |  |       |  
|Group companies                                                 |  |                                      |        |            |  |       |        |       |  |  |       |   |  |  |       |   |  |  |        |  
|At January 1                                                    |  |                                      | 24,828 |            |  |       | 21,086 |       |  |  | 3,400 |   |  |  | 3,533 |   |  |  | 52,847 |  
|Revisions and reclassifications                                 |  |                                      | 211    |            |  |       | (548   | )     |  |  | (39   | ) |  |  | 206   |   |  |  | (170   | )
|Improved recovery                                               |  |                                      | 105    |            |  |       | 215    |       |  |  |      |   |  |  |      |   |  |  | 320    |  
|Extensions and discoveries                                      |  |                                      | 55     |            |  |       | 178    |       |  |  | 656   |   |  |  | 29    |   |  |  | 918    |  
|Purchases of minerals in place                                  |  |                                      |       |            |  |       | 5      |       |  |  | 50    |   |  |  |      |   |  |  | 55     |  
|Sales of minerals in place                                      |  |                                      | (117   | )          |  |       | (139   | )     |  |  | (78   | ) |  |  | (32   | ) |  |  | (366   | )
|Production                                                      |  |                                      | (1,281 | )          |  |       | (665   | )     |  |  | (586  | ) |  |  | (230  | ) |  |  | (2,762 | )
|                                                                |  |                                      |        |            |  |       |        |       |  |  |       |   |  |  |       |   |  |  |        |  
|At December 31                                                  |  |                                      | 23,801 |            |  |       | 20,132 |       |  |  | 3,403 |   |  |  | 3,506 |   |  |  | 50,842 |  
|                                                                |  |                                      |        |            |  |       |        |       |  |  |       |   |  |  |       |   |  |  |        |  
|Group share of
associated companies                             |  |                                      |        |            |  |       |        |       |  |  |       |   |  |  |       |   |  |  |        |  
|At January 1                                                    |  |                                      | 52     |            |  |       | 5,047  |       |  |  | 595   |   |  |  |      |   |  |  | 5,694  |  
|Revisions and reclassifications                                 |  |                                      | 6      |            |  |       | 346    |       |  |  | (209  | ) |  |  |      |   |  |  | 143    |  
|Improved recovery                                               |  |                                      |       |            |  |       |       |       |  |  | 2     |   |  |  |      |   |  |  | 2      |  
|Extensions and discoveries                                      |  |                                      | 4      |            |  |       | 147    |       |  |  | 5     |   |  |  |      |   |  |  | 156    |  
|Purchases of minerals in place                                  |  |                                      |       |            |  |       |       |       |  |  |      |   |  |  |      |   |  |  |       |  
|Sales of minerals in place                                      |  |                                      |       |            |  |       | (19    | )     |  |  | (292  | ) |  |  |      |   |  |  | (311   | )
|Production                                                      |  |                                      | (6     | )          |  |       | (222   | )     |  |  | (15   | ) |  |  |      |   |  |  | (243   | )
|                                                                |  |                                      |        |            |  |       |        |       |  |  |       |   |  |  |       |   |  |  |        |  
|At December 31                                                  |  |                                      | 56     |            |  |       | 5,299  |       |  |  | 86    |   |  |  |      |   |  |  | 5,441  |  
|                                                                |  |                                      |        |            |  |       |        |       |  |  |       |   |  |  |       |   |  |  |        |  
|Total                                                           |  |                                      |        |            |  |       |        |       |  |  |       |   |  |  |       |   |  |  | 56,283 |  
|                                                                |  |                                      |        |            |  |       |        |       |  |  |       |   |  |  |       |   |  |  |        |  
|Minority interests share
of proved reserves of
Group companies |  |                                      |        |            |  |       |        |       |  |  |       |   |  |  |       |   |  |  |        |  
|At December 31                                                  |  |                                      |       |            |  |       | 292    |       |  |  |      |   |  |  | 658   |   |  |  | 950    |  
|                                                                |  |                                      |        |            |  |       |        |       |  |  |       |   |  |  |       |   |  |  |        |  

Royal Dutch/Shell Group of Companies   G35



---



##### Table of Contents



Reserves
Natural gascontinued



|                                    |  |                                      |        |            |  |       |       |            |  |            |       |         |  |        |       |       |  |     |        |       |  |  |        |  |  |  |       |  |  |  |       |  |  |  |       |  |  |  |        | 
|----------------------------------- |  | ------------------------------------ | ------ | ---------- |  | ----- | ----- | ---------- |  | ---------- | ----- | ------- |  | ------ | ----- | ----- |  | --- | ------ | ----- |  |  | ------ |  |  |  | ----- |  |  |  | ----- |  |  |  | ----- |  |  |  | ------ | 
|Proved developed reserves           |  | thousand million standard cubic feet
|                                    |  |                                     
|                                    |  | 2002                                 |        | 2001      
|                                    |  |                                      |        |           
|                                    |  | Eastern                              |        | Western    |  |       |       |            |  | Eastern    |       | Western |  |        |       |      
|                                    |  | Hemisphere                           |        | Hemisphere |  | Total |       | Hemisphere |  | Hemisphere |       | Total  
|                                    |  |                                      |        |            |  |       |       |            |  |            |       |        
|                                    |  | Europe                               |        | Other      |  | USA   |       | Other      |  |            |       |         |  | Europe |       | Other |  | USA |        | Other |  |  |        | 
|                                    |  |                                      |        |            |  |       |       |            |  |            |       |         |  |        |       |       |  |     |        |       |  |  |        | 
|Group companies                     |  |                                      |        |            |  |       |       |            |  |            |       |         |  |        |       |       |  |     |        |       |  |  |        |  |  |  |       |  |  |  |       |  |  |  |       |  |  |  |        | 
|At January 1                        |  |                                      | 12,366 |            |  |       | 6,860 |            |  |            | 2,363 |         |  |        | 2,349 |       |  |     | 23,938 |       |  |  | 12,986 |  |  |  | 6,314 |  |  |  | 2,347 |  |  |  | 2,542 |  |  |  | 24,189 | 
|At December 31                      |  |                                      | 12,105 |            |  |       | 6,327 |            |  |            | 2,316 |         |  |        | 1,782 |       |  |     | 22,530 |       |  |  | 12,366 |  |  |  | 6,860 |  |  |  | 2,363 |  |  |  | 2,349 |  |  |  | 23,938 | 
|Group share of
associated companies |  |                                      |        |            |  |       |       |            |  |            |       |         |  |        |       |       |  |     |        |       |  |  |        |  |  |  |       |  |  |  |       |  |  |  |       |  |  |  |        | 
|At January 1                        |  |                                      | 41     |            |  |       | 1,754 |            |  |            | 11    |         |  |        |      |       |  |     | 1,806  |       |  |  | 53     |  |  |  | 1,735 |  |  |  | 66    |  |  |  |      |  |  |  | 1,854  | 
|At December 31                      |  |                                      | 38     |            |  |       | 2,017 |            |  |            | 17    |         |  |        |      |       |  |     | 2,072  |       |  |  | 41     |  |  |  | 1,754 |  |  |  | 11    |  |  |  |      |  |  |  | 1,806  | 
|                                    |  |                                      |        |            |  |       |       |            |  |            |       |         |  |        |       |       |  |     |        |       |  |  |        |  |  |  |       |  |  |  |       |  |  |  |       |  |  |  |        | 

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                    |  |                                      |        |            |  |       |       |       |  |  |       |  |  |  |       |  |  |  |        | 
|----------------------------------- |  | ------------------------------------ | ------ | ---------- |  | ----- | ----- | ----- |  |  | ----- |  |  |  | ----- |  |  |  | ------ | 
|Proved developed reserves           |  | thousand million standard cubic feet
|                                    |  |                                     
|                                    |  | 2000                                
|                                    |  |                                     
|                                    |  | Eastern                              |        | Western    |  |       |       |      
|                                    |  | Hemisphere                           |        | Hemisphere |  | Total
|                                    |  |                                      |        |            |  |      
|                                    |  | Europe                               |        | Other      |  | USA   |       | Other |  |  |       | 
|                                    |  |                                      |        |            |  |       |       |       |  |  |       | 
|Group companies                     |  |                                      |        |            |  |       |       |       |  |  |       |  |  |  |       |  |  |  |        | 
|At January 1                        |  |                                      | 13,650 |            |  |       | 6,261 |       |  |  | 2,714 |  |  |  | 2,725 |  |  |  | 25,350 | 
|At December 31                      |  |                                      | 12,986 |            |  |       | 6,314 |       |  |  | 2,347 |  |  |  | 2,542 |  |  |  | 24,189 | 
|Group share of
associated companies |  |                                      |        |            |  |       |       |       |  |  |       |  |  |  |       |  |  |  |        | 
|At January 1                        |  |                                      | 51     |            |  |       | 1,728 |       |  |  | 453   |  |  |  |      |  |  |  | 2,232  | 
|At December 31                      |  |                                      | 53     |            |  |       | 1,735 |       |  |  | 66    |  |  |  |      |  |  |  | 1,854  | 
|                                    |  |                                      |        |            |  |       |       |       |  |  |       |  |  |  |       |  |  |  |        | 

Standardised measure of discounted future cash flows

United States accounting principles require the disclosure of a standardised
measure of discounted future cash flows, relating to proved oil and gas reserve
quantities and based on prices and costs at the end of each year, currently
enacted tax rates and a 10% annual discount factor. The information so
calculated does not provide a reliable measure of future cash flows from proved
reserves, nor does it permit a realistic comparison to be made of one entity
with another because the assumptions used cannot reflect the varying
circumstances within each entity. In addition a substantial but unknown
proportion of future real cash flows from oil and gas production activities is
expected to derive from reserves which have already been discovered, but which
cannot yet be regarded as proved.



|                                                     |  |            |         |            |  |       |         |            |  |            |        |         |  |        |        |       |  |     |         |       |  |  |        |  |  |  |         |  |  |  |        |  |  |  |        |  |  |  |         | 
|---------------------------------------------------- |  | ---------- | ------- | ---------- |  | ----- | ------- | ---------- |  | ---------- | ------ | ------- |  | ------ | ------ | ----- |  | --- | ------- | ----- |  |  | ------ |  |  |  | ------- |  |  |  | ------ |  |  |  | ------ |  |  |  | ------- | 
|                                                     |  | $ million 
|                                                     |  |           
|                                                     |  | 2002       |         | 2001      
|                                                     |  |            |         |           
|                                                     |  | Eastern    |         | Western    |  |       |         |            |  | Eastern    |        | Western |  |        |        |      
|                                                     |  | Hemisphere |         | Hemisphere |  | Total |         | Hemisphere |  | Hemisphere |        | Total  
|                                                     |  |            |         |            |  |       |         |            |  |            |        |        
|                                                     |  | Europe     |         | Other      |  | USA   |         | Other      |  |            |        |         |  | Europe |        | Other |  | USA |         | Other |  |  |        | 
|                                                     |  |            |         |            |  |       |         |            |  |            |        |         |  |        |        |       |  |     |         |       |  |  |        | 
|Future cash inflows                                  |  |            | 112,023 |            |  |       | 164,277 |            |  |            | 32,702 |         |  |        | 20,032 |       |  |     | 329,034 |       |  |  | 80,526 |  |  |  | 122,336 |  |  |  | 18,982 |  |  |  | 12,331 |  |  |  | 234,175 | 
|Future production costs                              |  |            | 22,458  |            |  |       | 23,244  |            |  |            | 4,858  |         |  |        | 4,248  |       |  |     | 54,808  |       |  |  | 15,389 |  |  |  | 20,158  |  |  |  | 4,021  |  |  |  | 4,086  |  |  |  | 43,654  | 
|Future development costs                             |  |            | 6,202   |            |  |       | 16,549  |            |  |            | 3,201  |         |  |        | 1,823  |       |  |     | 27,775  |       |  |  | 3,793  |  |  |  | 15,432  |  |  |  | 2,352  |  |  |  | 1,570  |  |  |  | 23,147  | 
|Future tax expenses                                  |  |            | 35,826  |            |  |       | 74,097  |            |  |            | 9,158  |         |  |        | 4,185  |       |  |     | 123,266 |       |  |  | 27,419 |  |  |  | 47,321  |  |  |  | 4,543  |  |  |  | 1,737  |  |  |  | 81,020  | 
|                                                     |  |            |         |            |  |       |         |            |  |            |        |         |  |        |        |       |  |     |         |       |  |  |        |  |  |  |         |  |  |  |        |  |  |  |        |  |  |  |         | 
|Future net cash flows                                |  |            | 47,537  |            |  |       | 50,387  |            |  |            | 15,485 |         |  |        | 9,776  |       |  |     | 123,185 |       |  |  | 33,925 |  |  |  | 39,425  |  |  |  | 8,066  |  |  |  | 4,938  |  |  |  | 86,354  | 
|Effect of discounting                                |  |            | 21,715  |            |  |       | 25,604  |            |  |            | 5,479  |         |  |        | 4,685  |       |  |     | 57,483  |       |  |  | 16,311 |  |  |  | 19,478  |  |  |  | 2,648  |  |  |  | 2,039  |  |  |  | 40,476  | 
|                                                     |  |            |         |            |  |       |         |            |  |            |        |         |  |        |        |       |  |     |         |       |  |  |        |  |  |  |         |  |  |  |        |  |  |  |        |  |  |  |         | 
|Standardised measure
of discounted future
cash flows |  |            | 25,822  |            |  |       | 24,783  |            |  |            | 10,006 |         |  |        | 5,091  |       |  |     | 65,702  |       |  |  | 17,614 |  |  |  | 19,947  |  |  |  | 5,418  |  |  |  | 2,899  |  |  |  | 45,878  | 
|                                                     |  |            |         |            |  |       |         |            |  |            |        |         |  |        |        |       |  |     |         |       |  |  |        |  |  |  |         |  |  |  |        |  |  |  |        |  |  |  |         | 
|Group share of
associated companies                  |  |            |         |            |  |       |         |            |  |            |        |         |  |        |        |       |  |     | 7,070   |       |  |  |        |  |  |  |         |  |  |  |        |  |  |  |        |  |  |  | 3,888   | 
|Minority interests                                   |  |            |        |            |  |       | 879     |            |  |            |       |         |  |        | 465    |       |  |     | 1,344   |       |  |  |       |  |  |  | 612     |  |  |  |       |  |  |  | 307    |  |  |  | 919     | 
|                                                     |  |            |         |            |  |       |         |            |  |            |        |         |  |        |        |       |  |     |         |       |  |  |        |  |  |  |         |  |  |  |        |  |  |  |        |  |  |  |         | 

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                     |  |            |        |            |  |       |         |       |  |  |        |  |  |  |        |  |  |  |         | 
|---------------------------------------------------- |  | ---------- | ------ | ---------- |  | ----- | ------- | ----- |  |  | ------ |  |  |  | ------ |  |  |  | ------- | 
|                                                     |  | $ million 
|                                                     |  |           
|                                                     |  | 2000      
|                                                     |  |           
|                                                     |  | Eastern    |        | Western    |  |       |         |      
|                                                     |  | Hemisphere |        | Hemisphere |  | Total
|                                                     |  |            |        |            |  |      
|                                                     |  | Europe     |        | Other      |  | USA   |         | Other |  |  |        | 
|                                                     |  |            |        |            |  |       |         |       |  |  |        | 
|Future cash inflows                                  |  |            | 93,126 |            |  |       | 142,208 |       |  |  | 37,434 |  |  |  | 22,961 |  |  |  | 295,729 | 
|Future production costs                              |  |            | 16,836 |            |  |       | 17,547  |       |  |  | 3,090  |  |  |  | 4,453  |  |  |  | 41,926  | 
|Future development costs                             |  |            | 2,594  |            |  |       | 15,514  |       |  |  | 2,320  |  |  |  | 1,589  |  |  |  | 22,017  | 
|Future tax expenses                                  |  |            | 32,091 |            |  |       | 66,206  |       |  |  | 12,020 |  |  |  | 6,608  |  |  |  | 116,925 | 
|                                                     |  |            |        |            |  |       |         |       |  |  |        |  |  |  |        |  |  |  |         | 
|Future net cash flows                                |  |            | 41,605 |            |  |       | 42,941  |       |  |  | 20,004 |  |  |  | 10,311 |  |  |  | 114,861 | 
|Effect of discounting                                |  |            | 18,656 |            |  |       | 22,032  |       |  |  | 6,828  |  |  |  | 4,304  |  |  |  | 51,820  | 
|                                                     |  |            |        |            |  |       |         |       |  |  |        |  |  |  |        |  |  |  |         | 
|Standardised measure
of discounted future
cash flows |  |            | 22,949 |            |  |       | 20,909  |       |  |  | 13,176 |  |  |  | 6,007  |  |  |  | 63,041  | 
|                                                     |  |            |        |            |  |       |         |       |  |  |        |  |  |  |        |  |  |  |         | 
|Group share of
associated companies                  |  |            |        |            |  |       |         |       |  |  |        |  |  |  |        |  |  |  | 6,120   | 
|Minority interests                                   |  |            |       |            |  |       | 360     |       |  |  |       |  |  |  | 895    |  |  |  | 1,255   | 
|                                                     |  |            |        |            |  |       |         |       |  |  |        |  |  |  |        |  |  |  |         | 

Change in standardised measure of discounted future cash flows

|                                                            |  |           |         |      |  |      |         |   |  |  |         |  
|----------------------------------------------------------- |  | --------- | ------- | ---- |  | ---- | ------- | - |  |  | ------- | -
|                                                            |  | $ million
|                                                            |  |          
|                                                            |  | 2002      |         | 2001 |  | 2000
|                                                            |  |           |         |      |  |     
|At January 1                                                |  |           | 45,878  |      |  |      | 63,041  |   |  |  | 54,799  |  
|Net changes in prices and production costs                  |  |           | 44,133  |      |  |      | (33,147 | ) |  |  | 17,065  |  
|Extensions, discoveries and improved recovery               |  |           | 5,375   |      |  |      | 4,451   |   |  |  | 8,128   |  
|Purchases/(sales) of minerals in place                      |  |           | 10,279  |      |  |      | 2,011   |   |  |  | (404    | )
|Revisions of previous reserve estimates                     |  |           | (2,004  | )    |  |      | 1,358   |   |  |  | (560    | )
|Development cost related to future production               |  |           | (7,637  | )    |  |      | (3,837  | ) |  |  | (1,967  | )
|Sales and transfers of oil and gas, net of production costs |  |           | (19,992 | )    |  |      | (20,173 | ) |  |  | (21,225 | )
|Development cost incurred during the year                   |  |           | 6,124   |      |  |      | 4,025   |   |  |  | 2,952   |  
|Accretion of discount                                       |  |           | 7,823   |      |  |      | 10,754  |   |  |  | 9,538   |  
|Net change in income tax                                    |  |           | (24,277 | )    |  |      | 17,395  |   |  |  | (5,285  | )
|                                                            |  |           |         |      |  |      |         |   |  |  |         |  
|At December 31                                              |  |           | 65,702  |      |  |      | 45,878  |   |  |  | 63,041  |  
|                                                            |  |           |         |      |  |      |         |   |  |  |         |  



---

| | a | The weighted average year-end oil price in 2002 was $23.87/bbl (2001:
$15.92/bbl; 2000: $20.00/bbl) and the weighted average year-end gas price in
2002 was $14.26/bbl of oil equivalent (2001: $11.44/boe; 2000: $14.91/boe).
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

G36   Royal Dutch/Shell Group of Companies



---



##### Table of Contents






Supplementary Information  Derivatives and other Financial Instruments and
Derivative Commodity Instruments

The following information is provided
in accordance with the Securities and Exchange Commission rules issued in 1997.

The contract/notional amounts of the derivative
instruments outstanding give an indication of the extent of the use
of these instruments but not of the exposure to credit or market
risk. Variable interest rates stated are spot rates applying as at
December 31. Amounts denominated in non-dollar currencies have been
translated using spot exchange rates at December 31. Associated
companies data are excluded.


Debt securities held for trading purposes

There were no debt securities held for trading purposes by Group companies at December 31, 2002.

The following table gives details of debt
securities held for trading purposes by Group companies at
December 31, 2001 at estimated fair value, by year of maturity.


|                                        |                       |           |       |     |  
|--------------------------------------- | --------------------- | --------- | ----- | --- | -
|2001 (all securities mature in 2002)    |                       | $ million
|                                        |                       |          
|                                        |                       |           | Total
|                                        |                       |           |      
|Fixed rate US dollar debt securities    |                       |           | 1,320 |    
|                                        | average interest rate |           |       | 2.1 | %
|Variable rate US dollar debt securities |                       |           | 25    |    
|                                        | average interest rate |           |       | 3.6 | %
|Fixed rate euro debt securities         |                       |           | 681   |    
|                                        | average interest rate |           |       | 3.4 | %
|Variable rate euro debt securities      |                       |           | 6     |    
|                                        | average interest rate |           |       | 4.7 | %
|Fixed rate Japanese yen debt securities |                       |           | 95    |    
|                                        | average interest rate |           |       | 0.1 | %
|Fixed rate UK pound debt securities     |                       |           | 50    |    
|                                        | average interest rate |           |       | 4.0 | %
|                                        |                       |           |       |    
|Total                                   |                       |           | 2,177 |    
|                                        |                       |           |       |    

Royal Dutch/Shell Group of Companies   G37



---



##### Table of Contents



Debt securities held for purposes other than trading

The following two tables give details of debt securities held for purposes
other than trading by Group companies at December 31, 2002 and 2001
respectively, at estimated fair value, by year of maturity.

|                                           |                       |           |      |      |      |  |      |     |      |  |      |     |           |  |       |     |   |  |     |     |   |  |     |     |   |  |     |  | 
|------------------------------------------ | --------------------- | --------- | ---- | ---- | ---- |  | ---- | --- | ---- |  | ---- | --- | --------- |  | ----- | --- | - |  | --- | --- | - |  | --- | --- | - |  | --- |  | 
|2002                                       |                       | $ million
|                                           |                       |          
|                                           |                       |           |      |      |      |  |      |     |      |  |      |     | 2008      |  |      
|                                           |                       |           | 2003 |      | 2004 |  | 2005 |     | 2006 |  | 2007 |     | and after |  | Total
|                                           |                       |           |      |      |      |  |      |     |      |  |      |     |           |  |      
|Fixed rate US dollar debt securities       |                       |           | 4    |      |      |  | 41   |     |      |  | 62   |     |           |  | 8     |     |   |  | 100 |     |   |  | 108 |     |   |  | 323 | 
|                                           | average interest rate |           |      | 0.9  | %    |  |      | 7.6 | %    |  |      | 5.7 | %         |  |       | 7.0 | % |  |     | 7.2 | % |  |     | 6.7 | %
|Variable rate US dollar debt securities    |                       |           | 9    |      |      |  |     |     |      |  |     |     |           |  |      |     |   |  |    |     |   |  |    |     |   |  | 9   | 
|                                           | average interest rate |           |      | 1.4  | %    |  |      |    |      |  |      |    |           |  |       |    |   |  |     |    |   |  |     |    |  
|Fixed rate euro debt securities            |                       |           |     |      |      |  | 21   |     |      |  |     |     |           |  | 66    |     |   |  | 38  |     |   |  | 166 |     |   |  | 291 | 
|                                           | average interest rate |           |      |     |      |  |      | 5.8 | %    |  |      |    |           |  |       | 6.5 | % |  |     | 5.3 | % |  |     | 5.5 | %
|Fixed rate UK pound debt securities        |                       |           |     |      |      |  |     |     |      |  | 16   |     |           |  |      |     |   |  | 4   |     |   |  | 18  |     |   |  | 38  | 
|                                           | average interest rate |           |      |     |      |  |      |    |      |  |      | 8.5 | %         |  |       |    |   |  |     | 8.0 | % |  |     | 6.3 | %
|Fixed rate Canadian dollar debt securities |                       |           | 15   |      |      |  | 4    |     |      |  |     |     |           |  |      |     |   |  |    |     |   |  | 15  |     |   |  | 34  | 
|                                           | average interest rate |           |      | 6.5  | %    |  |      | 9.0 | %    |  |      |    |           |  |       |    |   |  |     |    |   |  |     | 9.6 | %
|Fixed rate Swedish krone debt securities   |                       |           |     |      |      |  | 2    |     |      |  |     |     |           |  |      |     |   |  |    |     |   |  | 5   |     |   |  | 7   | 
|                                           | average interest rate |           |      |     |      |  |      | 5.0 | %    |  |      |    |           |  |       |    |   |  |     |    |   |  |     | 6.8 | %
|Other fixed rate debt securities           |                       |           | 4    |      |      |  |     |     |      |  |     |     |           |  |      |     |   |  |    |     |   |  |    |     |   |  | 4   | 
|                                           | average interest rate |           |      | 37.1 | %    |  |      |    |      |  |      |    |           |  |       |    |   |  |     |    |   |  |     |    |  
|Other variable rate debt securities        |                       |           | 28   |      |      |  |     |     |      |  |     |     |           |  |      |     |   |  |    |     |   |  |    |     |   |  | 28  | 
|                                           | average interest rate |           |      | 9.6  | %    |  |      |    |      |  |      |    |           |  |       |    |   |  |     |    |   |  |     |    |  
|                                           |                       |           |      |      |      |  |      |     |      |  |      |     |           |  |       |     |   |  |     |     |   |  |     |     |   |  |     | 
|Total                                      |                       |           | 60   |      |      |  | 68   |     |      |  | 78   |     |           |  | 74    |     |   |  | 142 |     |   |  | 312 |     |   |  | 734 | 
|                                           |                       |           |      |      |      |  |      |     |      |  |      |     |           |  |       |     |   |  |     |     |   |  |     |     |   |  |     | 

|                                           |                       |           |      |      |      |  |      |     |      |  |      |     |           |  |       |     |   |  |    |     |   |  |     |     |   |  |     |  | 
|------------------------------------------ | --------------------- | --------- | ---- | ---- | ---- |  | ---- | --- | ---- |  | ---- | --- | --------- |  | ----- | --- | - |  | -- | --- | - |  | --- | --- | - |  | --- |  | 
|2001                                       |                       | $ million
|                                           |                       |          
|                                           |                       |           |      |      |      |  |      |     |      |  |      |     | 2007      |  |      
|                                           |                       |           | 2002 |      | 2003 |  | 2004 |     | 2005 |  | 2006 |     | and after |  | Total
|                                           |                       |           |      |      |      |  |      |     |      |  |      |     |           |  |      
|Fixed rate US dollar debt securities       |                       |           | 25   |      |      |  | 32   |     |      |  | 32   |     |           |  | 25    |     |   |  | 23 |     |   |  | 173 |     |   |  | 310 | 
|                                           | average interest rate |           |      | 7.2  | %    |  |      | 5.0 | %    |  |      | 5.0 | %         |  |       | 7.2 | % |  |    | 6.3 | % |  |     | 6.3 | % |  |     |  | 
|Fixed rate euro debt securities            |                       |           |     |      |      |  | 29   |     |      |  | 25   |     |           |  |      |     |   |  | 37 |     |   |  | 146 |     |   |  | 237 | 
|                                           | average interest rate |           |      |     |      |  |      | 6.3 | %    |  |      | 6.3 | %         |  |       |    |   |  |    | 5.7 | % |  |     | 5.4 | % |  |     |  | 
|Fixed rate UK pound debt securities        |                       |           | 7    |      |      |  |     |     |      |  |     |     |           |  | 7     |     |   |  |   |     |   |  | 18  |     |   |  | 32  | 
|                                           | average interest rate |           |      | 6.9  | %    |  |      |    |      |  |      |    |           |  |       | 7.6 | % |  |    |    |   |  |     | 6.2 | % |  |     |  | 
|Fixed rate Canadian dollar debt securities |                       |           |     |      |      |  |     |     |      |  | 10   |     |           |  |      |     |   |  |   |     |   |  | 8   |     |   |  | 18  | 
|                                           | average interest rate |           |      |     |      |  |      |    |      |  |      | 8.0 | %         |  |       |    |   |  |    |    |   |  |     | 6.9 | % |  |     |  | 
|Other fixed rate debt securities           |                       |           | 6    |      |      |  |     |     |      |  | 3    |     |           |  |      |     |   |  | 5  |     |   |  | 4   |     |   |  | 18  | 
|                                           | average interest rate |           |      | 8.3  | %    |  |      |    |      |  |      | 4.9 | %         |  |       |    |   |  |    | 7.2 | % |  |     | 5.8 | % |  |     |  | 
|Variable rate debt securities              |                       |           | 31   |      |      |  |     |     |      |  |     |     |           |  |      |     |   |  |   |     |   |  |    |     |   |  | 31  | 
|                                           | average interest rate |           |      | 10.6 | %    |  |      |    |      |  |      |    |           |  |       |    |   |  |    |    |   |  |     |    |   |  |     |  | 
|                                           |                       |           |      |      |      |  |      |     |      |  |      |     |           |  |       |     |   |  |    |     |   |  |     |     |   |  |     | 
|Total                                      |                       |           | 69   |      |      |  | 61   |     |      |  | 70   |     |           |  | 32    |     |   |  | 65 |     |   |  | 349 |     |   |  | 646 | 
|                                           |                       |           |      |      |      |  |      |     |      |  |      |     |           |  |       |     |   |  |    |     |   |  |     |     |   |  |     | 

Equity securities held for purposes other than trading

At December 31, 2002, Group companies held equity securities for purposes other
than trading amounting to $3,827 million (2001: $3,277 million). These
principally comprised shares of Royal Dutch and Shell Transport, amounting to
$2,797 million (2001: $1,953 million), that are held in connection with share
option plans and other incentives compensation plans and a portfolio amounting
to $477 million required to be held long-term by the Group insurance companies
as security for their insurance activities. The portfolio tracks the Morgan
Stanley World Index and therefore is spread over 20 of the major stock markets
according to respective market capitalisation, including 56% in the USA, 9% in
Japan, 11% in the UK, 4% in France, 3% in Switzerland and 2% in Germany.

G38   Royal Dutch/Shell Group of Companies



---



##### Table of Contents



Debt

The following two tables give details of debt owed by Group companies at
December 31, 2002 and 2001 respectively, by year of maturity. Estimated fair
value approximates carrying amount.

|                             |                       |           |        |     |      |  |       |     |      |  |      |     |           |  |       |     |   |  |       |     |   |  |     |     |   |  |        |  | 
|---------------------------- | --------------------- | --------- | ------ | --- | ---- |  | ----- | --- | ---- |  | ---- | --- | --------- |  | ----- | --- | - |  | ----- | --- | - |  | --- | --- | - |  | ------ |  | 
|2002                         |                       | $ million
|                             |                       |          
|                             |                       |           |        |     |      |  |       |     |      |  |      |     | 2008      |  |      
|                             |                       |           | 2003   |     | 2004 |  | 2005  |     | 2006 |  | 2007 |     | and after |  | Total
|                             |                       |           |        |     |      |  |       |     |      |  |      |     |           |  |      
|Fixed rate US dollar debt    |                       |           | 7,428  |     |      |  | 2     |     |      |  | 827  |     |           |  | 612   |     |   |  | 1,237 |     |   |  | 256 |     |   |  | 10,362 | 
|                             | average interest rate |           |        | 2.0 | %    |  |       | 4.5 | %    |  |      | 4.6 | %         |  |       | 3.1 | % |  |       | 4.7 | % |  |     | 9.4 | % |  |        |  | 
|Variable rate US dollar debt |                       |           | 2,405  |     |      |  | 85    |     |      |  | 24   |     |           |  | 25    |     |   |  | 107   |     |   |  | 429 |     |   |  | 3,075  | 
|                             | average interest rate |           |        | 2.7 | %    |  |       | 1.5 | %    |  |      | 2.3 | %         |  |       | 2.4 | % |  |       | 2.4 | % |  |     | 4.9 | % |  |        |  | 
|Fixed rate European debt     |                       |           | 1,047  |     |      |  |      |     |      |  |     |     |           |  | 603   |     |   |  | 785   |     |   |  | 9   |     |   |  | 2,444  | 
|                             | average interest rate |           |        | 3.9 | %    |  |       |    |      |  |      |    |           |  |       | 4.3 | % |  |       | 3.5 | % |  |     | 4.1 | % |  |        |  | 
|Variable rate European debt  |                       |           | 701    |     |      |  | 839   |     |      |  | 9    |     |           |  |      |     |   |  |      |     |   |  |    |     |   |  | 1,549  | 
|                             | average interest rate |           |        | 3.9 | %    |  |       | 3.2 | %    |  |      | 3.8 | %         |  |       |    |   |  |       |    |   |  |     |    |   |  |        |  | 
|Other fixed rate debt        |                       |           | 157    |     |      |  | 69    |     |      |  | 38   |     |           |  |      |     |   |  |      |     |   |  | 55  |     |   |  | 319    | 
|                             | average interest rate |           |        | 7.9 | %    |  |       | 1.6 | %    |  |      | 8.9 | %         |  |       |    |   |  |       |    |   |  |     | 6.3 | % |  |        |  | 
|Other variable rate debt     |                       |           | 1,071  |     |      |  | 195   |     |      |  | 28   |     |           |  | 28    |     |   |  | 24    |     |   |  | 31  |     |   |  | 1,377  | 
|                             | average interest rate |           |        | 4.8 | %    |  |       | 2.5 | %    |  |      | 4.6 | %         |  |       | 4.6 | % |  |       | 4.6 | % |  |     | 4.6 | % |  |        |  | 
|                             |                       |           |        |     |      |  |       |     |      |  |      |     |           |  |       |     |   |  |       |     |   |  |     |     |   |  |        | 
|Total                        |                       |           | 12,809 |     |      |  | 1,190 |     |      |  | 926  |     |           |  | 1,268 |     |   |  | 2,153 |     |   |  | 780 |     |   |  | 19,126 | 
|                             |                       |           |        |     |      |  |       |     |      |  |      |     |           |  |       |     |   |  |       |     |   |  |     |     |   |  |        | 

Fixed rate European currency debt expected to mature in 2003 includes $383
million of Swiss franc debt (with an average interest rate of 2.3%) and $423
million of UK pound debt (with an average interest rate of 3.9%). Fixed rate
European currency debt expected to mature in 2006 and 2007 consists of UK pound
debt and euro debt respectively.

Variable rate European debt expected to mature in 2003 includes $594 million of
euro debt (with an average interest rate of 3.5%). Variable rate European debt
expected to mature in 2004 consists of euro debt.

Other variable rate debt expected to mature in 2003 includes $609 million of
Canadian dollar debt (with an average interest rate of 1.4%).

|                                     |                       |           |       |      |      |  |      |     |      |  |      |      |           |  |       |      |   |  |     |      |   |  |     |     |   |  |       |  | 
|------------------------------------ | --------------------- | --------- | ----- | ---- | ---- |  | ---- | --- | ---- |  | ---- | ---- | --------- |  | ----- | ---- | - |  | --- | ---- | - |  | --- | --- | - |  | ----- |  | 
|2001                                 |                       | $ million
|                                     |                       |          
|                                     |                       |           |       |      |      |  |      |     |      |  |      |      | 2007      |  |      
|                                     |                       |           | 2002  |      | 2003 |  | 2004 |     | 2005 |  | 2006 |      | and after |  | Total
|                                     |                       |           |       |      |      |  |      |     |      |  |      |      |           |  |      
|Fixed rate US dollar debt            |                       |           | 972   |      |      |  | 569  |     |      |  | 55   |      |           |  | 46    |      |   |  | 36  |      |   |  | 11  |     |   |  | 1,689 | 
|                                     | average interest rate |           |       | 5.9  | %    |  |      | 5.4 | %    |  |      | 4.7  | %         |  |       | 4.7  | % |  |     | 4.7  | % |  |     | 4.6 | % |  |       |  | 
|Variable rate US dollar debt         |                       |           | 2,164 |      |      |  | 98   |     |      |  | 26   |      |           |  | 25    |      |   |  | 131 |      |   |  | 280 |     |   |  | 2,724 | 
|                                     | average interest rate |           |       | 5.0  | %    |  |      | 3.7 | %    |  |      | 4.8  | %         |  |       | 4.5  | % |  |     | 4.7  | % |  |     | 5.1 | % |  |       |  | 
|Fixed rate European currency debt    |                       |           | 73    |      |      |  | 188  |     |      |  |     |      |           |  | 1     |      |   |  | 1   |      |   |  | 7   |     |   |  | 270   | 
|                                     | average interest rate |           |       | 4.4  | %    |  |      | 2.8 | %    |  |      |     |           |  |       | 5.4  | % |  |     | 3.0  | % |  |     | 4.7 | % |  |       |  | 
|Variable rate European currency debt |                       |           | 68    |      |      |  |     |     |      |  |     |      |           |  |      |      |   |  |    |      |   |  |    |     |   |  | 68    | 
|                                     | average interest rate |           |       | 7.8  | %    |  |      |    |      |  |      |     |           |  |       |     |   |  |     |     |   |  |     |    |   |  |       |  | 
|Other fixed rate debt                |                       |           | 79    |      |      |  | 2    |     |      |  |     |      |           |  | 10    |      |   |  |    |      |   |  | 42  |     |   |  | 133   | 
|                                     | average interest rate |           |       | 13.9 | %    |  |      | 5.9 | %    |  |      |     |           |  |       | 0.8  | % |  |     |     |   |  |     | 7.8 | % |  |       |  | 
|Other variable rate debt             |                       |           | 624   |      |      |  | 48   |     |      |  | 13   |      |           |  | 7     |      |   |  | 6   |      |   |  | 2   |     |   |  | 700   | 
|                                     | average interest rate |           |       | 13.7 | %    |  |      | 7.9 | %    |  |      | 11.8 | %         |  |       | 13.2 | % |  |     | 12.8 | % |  |     | 9.5 | % |  |       |  | 
|                                     |                       |           |       |      |      |  |      |     |      |  |      |      |           |  |       |      |   |  |     |      |   |  |     |     |   |  |       | 
|Total                                |                       |           | 3,980 |      |      |  | 905  |     |      |  | 94   |      |           |  | 89    |      |   |  | 174 |      |   |  | 342 |     |   |  | 5,584 | 
|                                     |                       |           |       |      |      |  |      |     |      |  |      |      |           |  |       |      |   |  |     |      |   |  |     |     |   |  |       | 

Royal Dutch/Shell Group of Companies   G39



---



##### Table of Contents



Interest rate swaps/forward rate agreements

The following two tables give details of interest rate swaps/forward rate
agreements held by Group companies at
December 31, 2002 and 2001 respectively, by expected year of maturity. These
are held for purposes other than trading. The variable interest rate component
of contracts is generally linked to inter-bank offer rates.

|                                            |                      |           |      |      |      |  |       |     |      |  |               |     |                                |  |                     |     |   |  |    |     |   |  |       |  |  |  |     |   | 
|------------------------------------------- | -------------------- | --------- | ---- | ---- | ---- |  | ----- | --- | ---- |  | ------------- | --- | ------------------------------ |  | ------------------- | --- | - |  | -- | --- | - |  | ----- |  |  |  | --- | - | 
|2002                                        |                      | $ million
|                                            |                      |          
|                                            |                      |           | 2003 |      | 2005 |  | 2006  |     | 2007 |  | 2008and after |     | Total contract/notional amount |  | Estimatedfair value
|                                            |                      |           |      |      |      |  |       |     |      |  |               |     |                                |  |                    
|US dollar                                   |                      |           |      |      |      |  |       |     |      |  |               |     |                                |  |                     |     |   |  |    |     |   |  |       |  |  |  |     |  
|Fixed to Variable: contract/notional amount |                      |           | 500  |      |      |  | 919   |     |      |  | 600           |     |                                |  | 1,152               |     |   |  |   |     |   |  | 3,171 |  |  |  | 201 |  
|                                            | average pay rate     |           |      | 1.7  | %    |  |       | 2.8 | %    |  |               | 1.5 | %                              |  |                     | 1.7 | % |  |    |    |   |  |       |  |  |  |     |   | 
|                                            | average receive rate |           |      | 5.0  | %    |  |       | 5.7 | %    |  |               | 3.1 | %                              |  |                     | 4.8 | % |  |    |    |   |  |       |  |  |  |     |   | 
|Variable to Fixed: contract/notional amount |                      |           | 288  |      |      |  | 100   |     |      |  |              |     |                                |  | 72                  |     |   |  | 88 |     |   |  | 548   |  |  |  | (38 | )
|                                            | average pay rate     |           |      | 6.0  | %    |  |       | 4.7 | %    |  |               |    |                                |  |                     | 7.2 | % |  |    | 7.8 | % |  |       |  |  |  |     |   | 
|                                            | average receive rate |           |      | 2.9  | %    |  |       | 2.0 | %    |  |               |    |                                |  |                     | 4.8 | % |  |    | 2.5 | % |  |       |  |  |  |     |   | 
|                                            |                      |           |      |      |      |  |       |     |      |  |               |     |                                |  |                     |     |   |  |    |     |   |  |       |  |  |  |     |  
|UK pound                                    |                      |           |      |      |      |  |       |     |      |  |               |     |                                |  |                     |     |   |  |    |     |   |  |       |  |  |  |     |  
|Fixed to Variable: contract/notional amount |                      |           | 8    |      |      |  |      |     |      |  | 603           |     |                                |  |                    |     |   |  |   |     |   |  | 611   |  |  |  |    |  
|                                            | average pay rate     |           |      | 4.7  | %    |  |       |    |      |  |               | 3.9 | %                              |  |                     |    |   |  |    |    |   |  |       |  |  |  |     |   | 
|                                            | average receive rate |           |      | 8.9  | %    |  |       |    |      |  |               | 4.3 | %                              |  |                     |    |   |  |    |    |   |  |       |  |  |  |     |   | 
|                                            |                      |           |      |      |      |  |       |     |      |  |               |     |                                |  |                     |     |   |  |    |     |   |  |       |  |  |  |     |  
|Other currencies                            |                      |           |      |      |      |  |       |     |      |  |               |     |                                |  |                     |     |   |  |    |     |   |  |       |  |  |  |     |  
|Fixed to Variable: contract/notional amount |                      |           | 16   |      |      |  |      |     |      |  |              |     |                                |  |                    |     |   |  |   |     |   |  | 16    |  |  |  |    |  
|                                            | average pay rate     |           |      | 2.7  | %    |  |       |    |      |  |               |    |                                |  |                     |    |   |  |    |    |   |  |       |  |  |  |     |   | 
|                                            | average receive rate |           |      | 2.8  | %    |  |       |    |      |  |               |    |                                |  |                     |    |   |  |    |    |   |  |       |  |  |  |     |   | 
|                                            |                      |           |      |      |      |  |       |     |      |  |               |     |                                |  |                     |     |   |  |    |     |   |  |       |  |  |  |     |  
|Variable to Fixed: contract/notional amount |                      |           | 4    |      |      |  |      |     |      |  |              |     |                                |  |                    |     |   |  |   |     |   |  | 4     |  |  |  |    |  
|                                            | average pay rate     |           |      | 12.8 | %    |  |       |    |      |  |               |    |                                |  |                     |    |   |  |    |    |   |  |       |  |  |  |     |   | 
|                                            | average receive rate |           |      | 12.3 | %    |  |       |    |      |  |               |    |                                |  |                     |    |   |  |    |    |   |  |       |  |  |  |     |   | 
|                                            |                      |           |      |      |      |  |       |     |      |  |               |     |                                |  |                     |     |   |  |    |     |   |  |       |  |  |  |     |  
|Total                                       |                      |           | 816  |      |      |  | 1,019 |     |      |  | 1,203         |     |                                |  | 1,224               |     |   |  | 88 |     |   |  | 4,350 |  |  |  | 163 |  
|                                            |                      |           |      |      |      |  |       |     |      |  |               |     |                                |  |                     |     |   |  |    |     |   |  |       |  |  |  |     |  

At December 31, 2002, a Group company also held an option to enter into a euro
fixed (3.8%) to variable (2.8%) interest rate swap maturing in 2003 with a face
value of $1.2 billion and a fair value of $6 million. This was exercised on
January 2, 2003. No such options were held at December 31, 2001.

|                                            |                      |           |       |     |      |  |           |      |                 |  |            |     |   |  |       |  |  |  |     |   | 
|------------------------------------------- | -------------------- | --------- | ----- | --- | ---- |  | --------- | ---- | --------------- |  | ---------- | --- | - |  | ----- |  |  |  | --- | - | 
|2001                                        |                      | $ million
|                                            |                      |          
|                                            |                      |           | 2002  |     | 2003 |  | 2007      |      | Total contract/ |  | Estimated 
|                                            |                      |           |       |     |      |  | and after |      | notional amount |  | fair value
|                                            |                      |           |       |     |      |  |           |      |                 |  |            |     |   |  |      
|US dollar                                   |                      |           |       |     |      |  |           |      |                 |  |            |     |   |  |       |  |  |  |     |  
|Fixed to Variable: contract/notional amount |                      |           | 826   |     |      |  | 500       |      |                 |  | 59         |     |   |  | 1,385 |  |  |  | 41  |  
|                                            | average pay rate     |           |       | 4.2 | %    |  |           | 4.4  | %               |  |            | 9.6 | % |  |       |  |  |  |     |   | 
|                                            | average receive rate |           |       | 6.0 | %    |  |           | 5.0  | %               |  |            | 6.2 | % |  |       |  |  |  |     |   | 
|Variable to Fixed: contract/notional amount |                      |           | 58    |     |      |  | 288       |      |                 |  | 80         |     |   |  | 426   |  |  |  | (24 | )
|                                            | average pay rate     |           |       | 6.9 | %    |  |           | 6.0  | %               |  |            | 5.0 | % |  |       |  |  |  |     |   | 
|                                            | average receive rate |           |       | 5.7 | %    |  |           | 4.1  | %               |  |            | 4.3 | % |  |       |  |  |  |     |   | 
|                                            |                      |           |       |     |      |  |           |      |                 |  |            |     |   |  |       |  |  |  |     |  
|Other currencies                            |                      |           |       |     |      |  |           |      |                 |  |            |     |   |  |       |  |  |  |     |  
|Fixed to Variable: contract/notional amount |                      |           | 94    |     |      |  | 7         |      |                 |  |           |     |   |  | 101   |  |  |  | 1   |  
|                                            | average pay rate     |           |       | 3.0 | %    |  |           | 5.4  | %               |  |            |    |   |  |       |  |  |  |     |   | 
|                                            | average receive rate |           |       | 3.7 | %    |  |           | 7.0  | %               |  |            |    |   |  |       |  |  |  |     |   | 
|Variable to Fixed: contract/notional amount |                      |           | 41    |     |      |  | 9         |      |                 |  |           |     |   |  | 50    |  |  |  |    |  
|                                            | average pay rate     |           |       | 9.8 | %    |  |           | 12.8 | %               |  |            |    |   |  |       |  |  |  |     |   | 
|                                            | average receive rate |           |       | 9.1 | %    |  |           | 9.0  | %               |  |            |    |   |  |       |  |  |  |     |   | 
|                                            |                      |           |       |     |      |  |           |      |                 |  |            |     |   |  |       |  |  |  |     |  
|Total                                       |                      |           | 1,019 |     |      |  | 804       |      |                 |  | 139        |     |   |  | 1,962 |  |  |  | 18  |  
|                                            |                      |           |       |     |      |  |           |      |                 |  |            |     |   |  |       |  |  |  |     |  

G40   Royal Dutch/Shell Group of Companies



---



##### Table of Contents



Foreign exchange contracts

The following two tables give details of forward exchange contracts held by
Group companies at December 31, 2002 and 2001 respectively. These are held for
purposes other than trading. Contract categories with a contract/notional
amount exceeding $100 million and/or an estimated fair value exceeding $10
million (gain or loss) are listed separately.

|                                     |  |                     |      |                   |  |            |        |  |  |  |      |  
|------------------------------------ |  | ------------------- | ---- | ----------------- |  | ---------- | ------ |  |  |  | ---- | -
|2002 (all contracts mature in 2003)  |  | $ million          
|                                     |  |                    
|                                     |  | Average contractual |      | Contract/notional |  | Estimated 
|                                     |  | exchange rate       |      | amount            |  | fair value
|                                     |  |                     |      |                   |  |           
|Buy US dollar/sell UK pound          |  |                     | 0.64 |                   |  |            | 7,170  |  |  |  | (138 | )
|Buy US dollar/sell euro              |  |                     | 1.01 |                   |  |            | 2,320  |  |  |  | (118 | )
|Buy euro/sell US dollar              |  |                     | 1.03 |                   |  |            | 677    |  |  |  | 13   |  
|Buy Canadian dollar/sell US dollar   |  |                     | 0.64 |                   |  |            | 450    |  |  |  | (6   | )
|Buy UK pound/sell US dollar          |  |                     | 1.55 |                   |  |            | 427    |  |  |  | 14   |  
|Buy US dollar/sell Australian dollar |  |                     | 1.77 |                   |  |            | 392    |  |  |  | (1   | )
|Buy Swiss franc/sell US dollar       |  |                     | 0.68 |                   |  |            | 283    |  |  |  | 14   |  
|Buy US dollar/sell Norwegian krona   |  |                     | 7.06 |                   |  |            | 209    |  |  |  | (3   | )
|Buy Singapore dollar/sell US dollar  |  |                     | 0.57 |                   |  |            | 180    |  |  |  | 1    |  
|Buy US dollar/sell Danish krona      |  |                     | 7.18 |                   |  |            | 159    |  |  |  | (2   | )
|Buy US dollar/sell Swedish krona     |  |                     | 8.84 |                   |  |            | 154    |  |  |  | (1   | )
|Buy US dollar/sell Hong Kong dollar  |  |                     | 7.80 |                   |  |            | 131    |  |  |  |     |  
|Other Contracts                      |  |                     |      |                   |  |            | 1,005  |  |  |  | (2   | )
|                                     |  |                     |      |                   |  |            |        |  |  |  |      |  
|Total                                |  |                     |      |                   |  |            | 13,557 |  |  |  | (229 | )
|                                     |  |                     |      |                   |  |            |        |  |  |  |      |  

|                                     |  |                     |       |                   |  |            |       |  |  |  |    |  
|------------------------------------ |  | ------------------- | ----- | ----------------- |  | ---------- | ----- |  |  |  | -- | -
|2001 (all contracts mature in 2002)  |  | $ million          
|                                     |  |                    
|                                     |  | Average contractual |       | Contract/notional |  | Estimated 
|                                     |  | exchange rate       |       | amount            |  | fair value
|                                     |  |                     |       |                   |  |           
|Buy UK pound/sell US dollar          |  |                     | 1.44  |                   |  |            | 1,735 |  |  |  | 2  |  
|Buy euro/sell US dollar              |  |                     | 0.89  |                   |  |            | 706   |  |  |  | 1  |  
|Buy US dollar/sell Canadian dollar   |  |                     | 1.60  |                   |  |            | 411   |  |  |  | 1  |  
|Buy US dollar/sell Swedish krona     |  |                     | 10.61 |                   |  |            | 291   |  |  |  | (1 | )
|Buy US dollar/sell Philippine peso   |  |                     | 52    |                   |  |            | 289   |  |  |  | (1 | )
|Buy Australian dollar/sell US dollar |  |                     | 0.51  |                   |  |            | 214   |  |  |  | 1  |  
|Buy US dollar/sell Danish krona      |  |                     | 8.38  |                   |  |            | 143   |  |  |  | 1  |  
|Buy US dollar/sell Hong Kong dollar  |  |                     | 7.80  |                   |  |            | 143   |  |  |  |   |  
|Buy US dollar/sell Japanese yen      |  |                     | 124   |                   |  |            | 116   |  |  |  | 8  |  
|Buy US dollar/sell Singapore dollar  |  |                     | 1.83  |                   |  |            | 114   |  |  |  | (1 | )
|Buy euro/sell Danish krona           |  |                     | 7.44  |                   |  |            | 106   |  |  |  |   |  
|Other contracts                      |  |                     |       |                   |  |            | 346   |  |  |  | 4  |  
|                                     |  |                     |       |                   |  |            |       |  |  |  |    |  
|Total                                |  |                     |       |                   |  |            | 4,614 |  |  |  | 15 |  
|                                     |  |                     |       |                   |  |            |       |  |  |  |    |  

Royal Dutch/Shell Group of Companies   G41



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##### Table of Contents



Currency swaps/options

The following two tables give details of currency swaps contracts held by Group
companies at December 31, 2002 and 2001 respectively, by expected year of
maturity. These are held for purposes other than trading. Contract categories
with a contract/ notional amount exceeding $100 million and/or an estimated
fair value exceeding $10 million (gain or loss) are listed separately.

|                                     |  |                                 |      |      |  |      |     |      |  |      |       |      |  |               |     |                                |  |                     |    |  |  |  |    |  |  |  |   |  |  |  |       |  |  |  |     |  
|------------------------------------ |  | ------------------------------- | ---- | ---- |  | ---- | --- | ---- |  | ---- | ----- | ---- |  | ------------- | --- | ------------------------------ |  | ------------------- | -- |  |  |  | -- |  |  |  | - |  |  |  | ----- |  |  |  | --- | -
|2002                                 |  | $ million                      
|                                     |  |                                
|                                     |  | Averagecontractualexchange rate |      | 2003 |  | 2004 |     | 2005 |  | 2006 |       | 2007 |  | 2008 andafter |     | Total contract/notional amount |  | Estimatedfair value
|                                     |  |                                 |      |      |  |      |     |      |  |      |       |      |  |               |     |                                |  |                    
|Buy UK pound/sell euro               |  |                                 | 1.57 |      |  |      |    |      |  |      | 1,085 |      |  |               |    |                                |  |                     |   |  |  |  |   |  |  |  |  |  |  |  | 1,085 |  |  |  | 1   |  
|Buy US dollar/sell
Canadian dollar   |  |                                 | 1.54 |      |  |      | 326 |      |  |      | 117   |      |  |               | 64  |                                |  |                     | 59 |  |  |  | 26 |  |  |  | 9 |  |  |  | 601   |  |  |  | 13  |  
|Buy US dollar/sell euro              |  |                                 | 1.09 |      |  |      |    |      |  |      | 461   |      |  |               |    |                                |  |                     |   |  |  |  |   |  |  |  |  |  |  |  | 461   |  |  |  | 63  |  
|Buy Australian dollar/sell US dollar |  |                                 | 0.62 |      |  |      |    |      |  |      | 289   |      |  |               |    |                                |  |                     |   |  |  |  |   |  |  |  |  |  |  |  | 289   |  |  |  | 3   |  
|Buy Canadian dollar/sell
US dollar   |  |                                 | 0.64 |      |  |      | 210 |      |  |      | 55    |      |  |               | 9   |                                |  |                     |   |  |  |  | 3  |  |  |  |  |  |  |  | 277   |  |  |  | (2  | )
|Buy US dollar/sell
Brazilian real    |  |                                 | 3.53 |      |  |      | 65  |      |  |      | 50    |      |  |               | 42  |                                |  |                     | 4  |  |  |  | 41 |  |  |  |  |  |  |  | 202   |  |  |  | 25  |  
|Buy US dollar/sell
Swiss franc       |  |                                 | 1.50 |      |  |      | 200 |      |  |      |      |      |  |               |    |                                |  |                     |   |  |  |  |   |  |  |  |  |  |  |  | 200   |  |  |  | 30  |  
|Other contracts                      |  |                                 |      |      |  |      | 123 |      |  |      |      |      |  |               | 27  |                                |  |                     |   |  |  |  |   |  |  |  |  |  |  |  | 150   |  |  |  | 9   |  
|                                     |  |                                 |      |      |  |      |     |      |  |      |       |      |  |               |     |                                |  |                     |    |  |  |  |    |  |  |  |   |  |  |  |       |  |  |  |     |  
|Total                                |  |                                 |      |      |  |      | 924 |      |  |      | 2,057 |      |  |               | 142 |                                |  |                     | 63 |  |  |  | 70 |  |  |  | 9 |  |  |  | 3,265 |  |  |  | 142 |  
|                                     |  |                                 |      |      |  |      |     |      |  |      |       |      |  |               |     |                                |  |                     |    |  |  |  |    |  |  |  |   |  |  |  |       |  |  |  |     |  

|                                     |  |                                 |      |      |  |      |     |      |  |      |     |                                |  |                     |     |  |  |  |    |  |  |  |     |  |  |  |     |  
|------------------------------------ |  | ------------------------------- | ---- | ---- |  | ---- | --- | ---- |  | ---- | --- | ------------------------------ |  | ------------------- | --- |  |  |  | -- |  |  |  | --- |  |  |  | --- | -
|2001                                 |  | $ million                      
|                                     |  |                                
|                                     |  | Averagecontractualexchange rate |      | 2002 |  | 2003 |     | 2004 |  | 2005 |     | Total contract/notional amount |  | Estimatedfair value
|                                     |  |                                 |      |      |  |      |     |      |  |      |     |                                |  |                    
|Buy US dollar/sell Brazilian real    |  |                                 | 2.41 |      |  |      | 108 |      |  |      | 15  |                                |  |                     | 61  |  |  |  | 50 |  |  |  | 234 |  |  |  | (18 | )
|Buy US dollar/sell Canadian dollar   |  |                                 | 1.39 |      |  |      | 109 |      |  |      | 82  |                                |  |                     | 15  |  |  |  | 5  |  |  |  | 211 |  |  |  | 15  |  
|Buy US dollar/sell Swiss franc       |  |                                 | 1.50 |      |  |      |    |      |  |      | 200 |                                |  |                     |    |  |  |  |   |  |  |  | 200 |  |  |  | (21 | )
|Buy US dollar/sell Australian dollar |  |                                 | 1.52 |      |  |      | 38  |      |  |      | 39  |                                |  |                     |    |  |  |  |   |  |  |  | 77  |  |  |  | 23  |  
|Buy US dollar/sell Zimbabwe dollar   |  |                                 | 7.67 |      |  |      |    |      |  |      |    |                                |  |                     |    |  |  |  | 23 |  |  |  | 23  |  |  |  | 13  |  
|Other contracts                      |  |                                 |      |      |  |      | 120 |      |  |      | 7   |                                |  |                     | 92  |  |  |  |   |  |  |  | 219 |  |  |  | 5   |  
|                                     |  |                                 |      |      |  |      |     |      |  |      |     |                                |  |                     |     |  |  |  |    |  |  |  |     |  |  |  |     |  
|Total                                |  |                                 |      |      |  |      | 375 |      |  |      | 343 |                                |  |                     | 168 |  |  |  | 78 |  |  |  | 964 |  |  |  | 17  |  
|                                     |  |                                 |      |      |  |      |     |      |  |      |     |                                |  |                     |     |  |  |  |    |  |  |  |     |  |  |  |     |  

In conjunction with natural gas marketing activities, Group companies held put
and call options to buy Canadian dollars and sell US dollars at December 31,
2002 each with a contract/notional amount of $0.1 billion (2001: $0.2 billion)
and a total estimated fair value of $(1) million (2001: $(11) million) and
expected maturity in 2003 (20022003).

G43   Royal Dutch/Shell Group of Companies



---



##### Table of Contents



Commodity derivatives

The tables on this and the following pages give details of commodity swaps,
options and futures contracts held by Group companies at December 31, 2002 and
2001 respectively, by expected year of maturity. Variable prices are linked to
indexed or dated commodities.

Commodity swaps held for trading purposes

|                   |    |   |  |                                                |  |      |           |      |  |      |           |      |  |      |           |                 |  |            |           |  |  |  |           |  |  |  |       |  |  |  |     |  
|------------------ | -- | - |  | ---------------------------------------------- |  | ---- | --------- | ---- |  | ---- | --------- | ---- |  | ---- | --------- | --------------- |  | ---------- | --------- |  |  |  | --------- |  |  |  | ----- |  |  |  | --- | -
|2002               |    |   |  | $ million                                     
|                   |    |   |  |                                               
|                   |    |   |  |                                                |  | 2003 |           | 2004 |  | 2005 |           | 2006 |  | 2007 |           | Total contract/ |  | Estimated 
|                   |    |   |  |                                                |  |      |           |      |  |      |           |      |  |      |           | notional amount |  | fair value
|                   |    |   |  |                                                |  |      |           |      |  |      |           |      |  |      |           |                 |  |           
|Crude oil swaps    |    |   |  |                                                |  |      |           |      |  |      |           |      |  |      |           |                 |  |            |           |  |  |  |           |  |  |  |       | 
|                   | (a | ) |  | Variable price to variable price contracts:    |  |      |           |      |  |      |           |      |  |      |           |                 |  |            |           |  |  |  |           |  |  |  |       |  |  |  |     |  
|                   |    |   |  | contract/notional amount ($ million)           |  |      | 1,374     |      |  |      | 62        |      |  |      |          |                 |  |            |          |  |  |  |          |  |  |  | 1,436 |  |  |  | (3  | )
|                   |    |   |  | Volume (million barrels m bbl)               |  |      | 55        |      |  |      | 3         |      |  |      |          |                 |  |            |          |  |  |  |          |  |  |  |       |  |  |  |     |  
|                   |    |   |  | average pay/receive price ($/bbl)              |  |      | 28.8/28.7 |      |  |      | 22.8/22.8 |      |  |      |          |                 |  |            |          |  |  |  |          |  |  |  |       |  |  |  |     |  
|                   |    |   |  |                                                |  |      |           |      |  |      |           |      |  |      |           |                 |  |            |           |  |  |  |           |  |  |  |       |  |  |  |     |  
|                   | (b | ) |  | Buy fixed price/sell variable price contracts: |  |      |           |      |  |      |           |      |  |      |           |                 |  |            |           |  |  |  |           |  |  |  |       |  |  |  |     |  
|                   |    |   |  | contract/notional amount ($ million)           |  |      | 970       |      |  |      | 148       |      |  |      | 20        |                 |  |            | 2         |  |  |  |          |  |  |  | 1,140 |  |  |  | 70  |  
|                   |    |   |  | Volume (m bbl)                                 |  |      | 49        |      |  |      | 6         |      |  |      | 1         |                 |  |            | *         |  |  |  |          |  |  |  |       |  |  |  |     |  
|                   |    |   |  | average pay/receive price ($/bbl)              |  |      | 19.9/21.3 |      |  |      | 23.6/23.7 |      |  |      | 22.8/23.6 |                 |  |            | 21.8/21.3 |  |  |  |          |  |  |  |       |  |  |  |     |  
|                   |    |   |  |                                                |  |      |           |      |  |      |           |      |  |      |           |                 |  |            |           |  |  |  |           |  |  |  |       |  |  |  |     |  
|                   | (c | ) |  | Buy variable price/sell fixed price contracts: |  |      |           |      |  |      |           |      |  |      |           |                 |  |            |           |  |  |  |           |  |  |  |       |  |  |  |     |  
|                   |    |   |  | contract/notional amount ($ million)           |  |      | 886       |      |  |      | 57        |      |  |      | 22        |                 |  |            |          |  |  |  |          |  |  |  | 965   |  |  |  | (90 | )
|                   |    |   |  | Volume (m bbl)                                 |  |      | 57        |      |  |      | 4         |      |  |      | 1         |                 |  |            |          |  |  |  |          |  |  |  |       |  |  |  |     |  
|                   |    |   |  | average pay/receive ($/bbl)                    |  |      | 17.3/15.6 |      |  |      | 15.5/15.6 |      |  |      | 23.6/23.0 |                 |  |            |          |  |  |  |          |  |  |  |       |  |  |  |     |  
|                   |    |   |  |                                                |  |      |           |      |  |      |           |      |  |      |           |                 |  |            |           |  |  |  |           |  |  |  |       |  |  |  |     |  
|Oil products swaps |    |   |  |                                                |  |      |           |      |  |      |           |      |  |      |           |                 |  |            |           |  |  |  |           |  |  |  |       | 
|                   | (a | ) |  | Variable price to variable price contracts:    |  |      |           |      |  |      |           |      |  |      |           |                 |  |            |           |  |  |  |           |  |  |  |       |  |  |  |     |  
|                   |    |   |  | contract/notional amount ($ million)           |  |      | 287       |      |  |      |          |      |  |      |          |                 |  |            |          |  |  |  |          |  |  |  | 287   |  |  |  | (1  | )
|                   |    |   |  | Volume (m bbl)                                 |  |      | 70        |      |  |      |          |      |  |      |          |                 |  |            |          |  |  |  |          |  |  |  |       |  |  |  |     |  
|                   |    |   |  | average pay/receive ($/bbl)                    |  |      | 23.0/19.8 |      |  |      |          |      |  |      |          |                 |  |            |          |  |  |  |          |  |  |  |       |  |  |  |     |  
|                   |    |   |  |                                                |  |      |           |      |  |      |           |      |  |      |           |                 |  |            |           |  |  |  |           |  |  |  |       |  |  |  |     |  
|                   | (b | ) |  | Buy fixed price/sell variable price contracts: |  |      |           |      |  |      |           |      |  |      |           |                 |  |            |           |  |  |  |           |  |  |  |       |  |  |  |     |  
|                   |    |   |  | contract/notional amount ($ million)           |  |      | 613       |      |  |      |          |      |  |      | 1         |                 |  |            |          |  |  |  |          |  |  |  | 614   |  |  |  | 41  |  
|                   |    |   |  | Volume (m bbl)                                 |  |      | 76        |      |  |      |          |      |  |      | *         |                 |  |            |          |  |  |  |          |  |  |  |       |  |  |  |     |  
|                   |    |   |  | average pay/receive ($/bbl)                    |  |      | 8.1/8.6   |      |  |      |          |      |  |      | 19.1/17.6 |                 |  |            |          |  |  |  |          |  |  |  |       |  |  |  |     |  
|                   |    |   |  |                                                |  |      |           |      |  |      |           |      |  |      |           |                 |  |            |           |  |  |  |           |  |  |  |       |  |  |  |     |  
|                   | (c | ) |  | Buy variable price/sell fixed price contracts: |  |      |           |      |  |      |           |      |  |      |           |                 |  |            |           |  |  |  |           |  |  |  |       |  |  |  |     |  
|                   |    |   |  | contract/notional amount ($ million)           |  |      | 681       |      |  |      |          |      |  |      |          |                 |  |            |          |  |  |  |          |  |  |  | 681   |  |  |  | (42 | )
|                   |    |   |  | Volume (m bbl)                                 |  |      | 88        |      |  |      |          |      |  |      |          |                 |  |            |          |  |  |  |          |  |  |  |       |  |  |  |     |  
|                   |    |   |  | average pay/receive ($/bbl)                    |  |      | 8.2/7.7   |      |  |      |          |      |  |      |          |                 |  |            |          |  |  |  |          |  |  |  |       |  |  |  |     |  
|Electricity swaps  |    |   |  |                                                |  |      |           |      |  |      |           |      |  |      |           |                 |  |            |           |  |  |  |           |  |  |  |       | 
|                   | (a | ) |  | Buy fixed price/sell variable price contracts: |  |      |           |      |  |      |           |      |  |      |           |                 |  |            |           |  |  |  |           |  |  |  |       |  |  |  |     |  
|                   |    |   |  | contract/notional amount ($ million)           |  |      | 261       |      |  |      | 66        |      |  |      | 36        |                 |  |            | 29        |  |  |  | 18        |  |  |  | 410   |  |  |  | 66  |  
|                   |    |   |  | Volume (thousand megawatt hours MMwh)        |  |      | 6         |      |  |      | 2         |      |  |      | 1         |                 |  |            | 1         |  |  |  | **        |  |  |  |       |  |  |  |     |  
|                   |    |   |  | average pay/receive ($/Mwh)                    |  |      | 47.2/54.4 |      |  |      | 39.4/49.8 |      |  |      | 45.2/52.7 |                 |  |            | 50.1/53.5 |  |  |  | 49.8/52.7 |  |  |  |       |  |  |  |     |  
|                   |    |   |  |                                                |  |      |           |      |  |      |           |      |  |      |           |                 |  |            |           |  |  |  |           |  |  |  |       |  |  |  |     |  
|                   | (b | ) |  | Buy variable price/sell fixed price contracts: |  |      |           |      |  |      |           |      |  |      |           |                 |  |            |           |  |  |  |           |  |  |  |       |  |  |  |     |  
|                   |    |   |  | contract/notional amount ($ million)           |  |      | 320       |      |  |      | 91        |      |  |      | 70        |                 |  |            | 54        |  |  |  | 36        |  |  |  | 571   |  |  |  | (54 | )
|                   |    |   |  | Volume (MMwh)                                  |  |      | 7         |      |  |      | 2         |      |  |      | 1         |                 |  |            | 1         |  |  |  | 1         |  |  |  |       |  |  |  |     |  
|                   |    |   |  | average pay/receive ($/Mwh)                    |  |      | 53.5/48.4 |      |  |      | 54.8/50.0 |      |  |      | 53.8/50.7 |                 |  |            | 52.9/49.3 |  |  |  | 53.1/48.9 |  |  |  |       |  |  |  |     |  
|                   |    |   |  |                                                |  |      |           |      |  |      |           |      |  |      |           |                 |  |            |           |  |  |  |           |  |  |  |       |  |  |  |     |  



---

|*  |  | less than one million barrels        
|-- |  | -------------------------------------
|  
|** |  | less than one thousand megawatt hours

Royal Dutch/Shell Group of Companies   G43



---



##### Table of Contents



|                    |    |   |  |                                                |  |      |           |      |  |      |           |      |  |      |           |          |  |                 |           |            |  |  |           |  |  |  |           |  |        |  |       |  |    |  |      |  
|------------------- | -- | - |  | ---------------------------------------------- |  | ---- | --------- | ---- |  | ---- | --------- | ---- |  | ---- | --------- | -------- |  | --------------- | --------- | ---------- |  |  | --------- |  |  |  | --------- |  | ------ |  | ----- |  | -- |  | ---- | -
|2002 continued      |    |   |  | $ million                                     
|                    |    |   |  |                                               
|                    |    |   |  |                                                |  |      |           |      |  |      |           |      |  |      |           | 2008 and |  | Total contract/ |           | Estimated 
|                    |    |   |  |                                                |  | 2003 |           | 2004 |  | 2005 |           | 2006 |  | 2007 |           | after    |  | notional amount |           | fair value
|                    |    |   |  |                                                |  |      |           |      |  |      |           |      |  |      |           |          |  |                 |           |           
|Natural gas swaps   |    |   |  |                                                |  |      |           |      |  |      |           |      |  |      |           |          |  |                 |           |            |  |  |           |  |  |  |           |  |        |  |       | 
|                    | (a | ) |  | Buy fixed price/sell variable price contracts: |  |      |           |      |  |      |           |      |  |      |           |          |  |                 |           |            |  |  |           |  |  |  |           |  |        |  |       |  |    |  |      |  
|                    |    |   |  | contract/notional amount ($ million)           |  |      | 3,803     |      |  |      | 925       |      |  |      | 184       |          |  |                 | 87        |            |  |  | 32        |  |  |  |          |  |        |  | 5,031 |  |    |  | 895  |  
|                    |    |   |  | Volume (thousand million cubic feet bcf)     |  |      | 938       |      |  |      | 234       |      |  |      | 48        |          |  |                 | 22        |            |  |  | 6         |  |  |  |          |  |        |  |       |  |    |  |      |  
|                    |    |   |  | average pay/receive ($/thousand cf)            |  |      | 4.1/4.8   |      |  |      | 4.0/4.5   |      |  |      | 3.8/4.3   |          |  |                 | 3.9/4.5   |            |  |  | 5.4/5.5   |  |  |  |          |  |        |  |       |  |    |  |      |  
|                    |    |   |  |                                                |  |      |           |      |  |      |           |      |  |      |           |          |  |                 |           |            |  |  |           |  |  |  |           |  |        |  |       |  |    |  |      |  
|                    | (b | ) |  | Buy variable price/sell fixed price contracts: |  |      |           |      |  |      |           |      |  |      |           |          |  |                 |           |            |  |  |           |  |  |  |           |  |        |  |       |  |    |  |      |  
|                    |    |   |  | contract/notional amount ($ million)           |  |      | 3,951     |      |  |      | 803       |      |  |      | 121       |          |  |                 | 25        |            |  |  | 4         |  |  |  | 11        |  |        |  | 4,915 |  |    |  | (831 | )
|                    |    |   |  | Volume (bcf)                                   |  |      | 967       |      |  |      | 205       |      |  |      | 33        |          |  |                 | 7         |            |  |  | 1         |  |  |  | 3         |  |        |  |       |  |    |  |      |  
|                    |    |   |  | average pay/receive ($/thousand cf)            |  |      | 4.8/4.1   |      |  |      | 4.4/3.9   |      |  |      | 4.1/3.7   |          |  |                 | 4.0/3.5   |            |  |  | 4.2/4.3   |  |  |  | 4.2/4.3   |  |        |  |       |  |    |  |      |  
|                    |    |   |  |                                                |  |      |           |      |  |      |           |      |  |      |           |          |  |                 |           |            |  |  |           |  |  |  |           |  |        |  |       |  |    |  |      |  
|NGL gas basis swaps |    |   |  |                                                |  |      |           |      |  |      |           |      |  |      |           |          |  |                 |           |            |  |  |           |  |  |  |           |  |        |  |       | 
|                    | (a | ) |  | Buy fixed price/sell variable price contracts: |  |      |           |      |  |      |           |      |  |      |           |          |  |                 |           |            |  |  |           |  |  |  |           |  |        |  |       |  |    |  |      |  
|                    |    |   |  | contract/notional amount ($ million)           |  |      | 373       |      |  |      | 88        |      |  |      | 46        |          |  |                 | 24        |            |  |  | 15        |  |  |  | 4         |  |        |  | 550   |  |    |  | (283 | )
|                    |    |   |  | Volume (m bbl)                                 |  |      | 1,033     |      |  |      | 246       |      |  |      | 114       |          |  |                 | 63        |            |  |  | 40        |  |  |  | 18        |  |        |  |       |  |    |  |      |  
|                    |    |   |  | average pay/receive ($/bbl)                    |  |      | 0.36/0.16 |      |  |      | 0.36/0.18 |      |  |      | 0.4/0.25  |          |  |                 | 0.38/0.27 |            |  |  | 0.38/0.27 |  |  |  | 0.23/0.09 |  |        |  |       |  |    |  |      |  
|                    |    |   |  |                                                |  |      |           |      |  |      |           |      |  |      |           |          |  |                 |           |            |  |  |           |  |  |  |           |  |        |  |       |  |    |  |      |  
|                    | (b | ) |  | Buy variable price/sell fixed price contracts: |  |      |           |      |  |      |           |      |  |      |           |          |  |                 |           |            |  |  |           |  |  |  |           |  |        |  |       |  |    |  |      |  
|                    |    |   |  | contract/notional amount ($ million)           |  |      | 344       |      |  |      | 73        |      |  |      | 30        |          |  |                 | 15        |            |  |  | 9         |  |  |  | 9         |  |        |  | 480   |  |    |  | 277  |  
|                    |    |   |  | Volume (m bbl)                                 |  |      | 994       |      |  |      | 210       |      |  |      | 79        |          |  |                 | 40        |            |  |  | 26        |  |  |  | 27        |  |        |  |       |  |    |  |      |  
|                    |    |   |  | average pay/receive ($/bbl)                    |  |      | 0.16/0.35 |      |  |      | 0.12/0.35 |      |  |      | 0.14/0.38 |          |  |                 | 0.17/0.38 |            |  |  | 0.19/0.35 |  |  |  | 0.13/0.33 |  |        |  |       |  |    |  |      |  
|                    |    |   |  |                                                |  |      |           |      |  |      |           |      |  |      |           |          |  |                 |           |            |  |  |           |  |  |  |           |  |        |  |       |  |    |  |      |  
|Total               |    |   |  |                                                |  |      |           |      |  |      |           |      |  |      |           |          |  |                 |           |            |  |  |           |  |  |  |           |  | 17,080 |  |       |  | 45 | 
|                    |    |   |  |                                                |  |      |           |      |  |      |           |      |  |      |           |          |  |                 |           |            |  |  |           |  |  |  |           |  |        |  |       |  |    |  |      |  

Group companies also held chemical product and natural gas liquid swaps at
December 21, 2002 with a contract/notional amount of $166 million (2001: $234
million) and fair value of $5 million (2001: $(3) million) and expected
maturity 2003-2004 (2002-2003).

Commodity swaps held for purposes other than trading

At December 31, 2002 Group companies held crude oil, natural gas and oil
product commodity swaps for purposes other than trading with a
contract/notional amount of $57 million (2001: $66 million) and an estimated
fair value of $7 million (2001: $(8) million).

G2   Royal Dutch/Shell Group of Companies



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##### Table of Contents



|                   |    |   |  |                                                  |  |      |           |      |  |      |           |      |  |      |         |           |  |                 |         |            |  |  |         |  |  |  |         |  |        |  |       |  |     |  |       |  
|------------------ | -- | - |  | ------------------------------------------------ |  | ---- | --------- | ---- |  | ---- | --------- | ---- |  | ---- | ------- | --------- |  | --------------- | ------- | ---------- |  |  | ------- |  |  |  | ------- |  | ------ |  | ----- |  | --- |  | ----- | -
|2001               |    |   |  | $ million                                       
|                   |    |   |  |                                                 
|                   |    |   |  |                                                  |  |      |           |      |  |      |           |      |  |      |         | 2007      |  | Total contract/ |         | Estimated 
|                   |    |   |  |                                                  |  | 2002 |           | 2003 |  | 2004 |           | 2005 |  | 2006 |         | and after |  | notional amount |         | fair value
|                   |    |   |  |                                                  |  |      |           |      |  |      |           |      |  |      |         |           |  |                 |         |           
|Crude oil swaps    |    |   |  |                                                  |  |      |           |      |  |      |           |      |  |      |         |           |  |                 |         |            |  |  |         |  |  |  |         |  |        |  |       | 
|                   | (a | ) |  | Variable price to variable price contracts:      |  |      |           |      |  |      |           |      |  |      |         |           |  |                 |         |            |  |  |         |  |  |  |         |  |        |  |       |  |     |  |       |  
|                   |    |   |  | contract/notional amount ($ million)             |  |      | 1,305     |      |  |      |          |      |  |      |        |           |  |                 |        |            |  |  |        |  |  |  |        |  |        |  | 1,305 |  |     |  | (4    | )
|                   |    |   |  | volume (million barrels m bbl)                 |  |      | 64        |      |  |      |          |      |  |      |        |           |  |                 |        |            |  |  |        |  |  |  |        |  |        |  |       |  |     |  |       |  
|                   |    |   |  | average pay/receive price ($ per barrel $/bbl) |  |      | 20.4/20.3 |      |  |      |          |      |  |      |        |           |  |                 |        |            |  |  |        |  |  |  |        |  |        |  |       |  |     |  |       |  
|                   | (b | ) |  | Buy fixed price/sell variable price contracts:   |  |      |           |      |  |      |           |      |  |      |         |           |  |                 |         |            |  |  |         |  |  |  |         |  |        |  |       |  |     |  |       |  
|                   |    |   |  | contract/notional amount ($ million)             |  |      | 431       |      |  |      | 36        |      |  |      |        |           |  |                 |        |            |  |  |        |  |  |  |        |  |        |  | 467   |  |     |  | (31   | )
|                   |    |   |  | volume (m bbl)                                   |  |      | 35        |      |  |      | 2         |      |  |      |        |           |  |                 |        |            |  |  |        |  |  |  |        |  |        |  |       |  |     |  |       |  
|                   |    |   |  | average pay/receive price ($/bbl)                |  |      | 12.3/11.5 |      |  |      | 22.0/20.0 |      |  |      |        |           |  |                 |        |            |  |  |        |  |  |  |        |  |        |  |       |  |     |  |       |  
|                   | (c | ) |  | Buy variable price/sell fixed price contracts:   |  |      |           |      |  |      |           |      |  |      |         |           |  |                 |         |            |  |  |         |  |  |  |         |  |        |  |       |  |     |  |       |  
|                   |    |   |  | contract/notional amount ($ million)             |  |      | 505       |      |  |      | 72        |      |  |      |        |           |  |                 |        |            |  |  |        |  |  |  |        |  |        |  | 577   |  |     |  | 60    |  
|                   |    |   |  | volume (m bbl)                                   |  |      | 36        |      |  |      | 4         |      |  |      |        |           |  |                 |        |            |  |  |        |  |  |  |        |  |        |  |       |  |     |  |       |  
|                   |    |   |  | average pay/receive price ($/bbl)                |  |      | 12.8/14.3 |      |  |      | 17.1/19.1 |      |  |      |        |           |  |                 |        |            |  |  |        |  |  |  |        |  |        |  |       |  |     |  |       |  
|                   |    |   |  |                                                  |  |      |           |      |  |      |           |      |  |      |         |           |  |                 |         |            |  |  |         |  |  |  |         |  |        |  |       |  |     |  |       |  
|Oil products swaps |    |   |  |                                                  |  |      |           |      |  |      |           |      |  |      |         |           |  |                 |         |            |  |  |         |  |  |  |         |  |        |  |       | 
|                   | (a | ) |  | Variable price to variable price contracts:      |  |      |           |      |  |      |           |      |  |      |         |           |  |                 |         |            |  |  |         |  |  |  |         |  |        |  |       |  |     |  |       |  
|                   |    |   |  | contract/notional amount ($ million)             |  |      | 28        |      |  |      | 38        |      |  |      |        |           |  |                 |        |            |  |  |        |  |  |  |        |  |        |  | 66    |  |     |  |      |  
|                   |    |   |  | volume (m bbl)                                   |  |      | 1         |      |  |      | 2         |      |  |      |        |           |  |                 |        |            |  |  |        |  |  |  |        |  |        |  |       |  |     |  |       |  
|                   |    |   |  | average pay/receive price ($/bbl)                |  |      | 20.6/20.7 |      |  |      | 20.9/20.8 |      |  |      |        |           |  |                 |        |            |  |  |        |  |  |  |        |  |        |  |       |  |     |  |       |  
|                   | (b | ) |  | Buy fixed price/sell variable price contracts:   |  |      |           |      |  |      |           |      |  |      |         |           |  |                 |         |            |  |  |         |  |  |  |         |  |        |  |       |  |     |  |       |  
|                   |    |   |  | contract/notional amount ($ million)             |  |      | 357       |      |  |      | 9         |      |  |      |        |           |  |                 |        |            |  |  |        |  |  |  |        |  |        |  | 366   |  |     |  | (22   | )
|                   |    |   |  | volume (m bbl)                                   |  |      | 34        |      |  |      | 3         |      |  |      |        |           |  |                 |        |            |  |  |        |  |  |  |        |  |        |  |       |  |     |  |       |  
|                   |    |   |  | average pay/receive price ($/bbl)                |  |      | 10.5/9.9  |      |  |      | 3.1/2.3   |      |  |      |        |           |  |                 |        |            |  |  |        |  |  |  |        |  |        |  |       |  |     |  |       |  
|                   | (c | ) |  | Buy variable price/sell fixed price contracts:   |  |      |           |      |  |      |           |      |  |      |         |           |  |                 |         |            |  |  |         |  |  |  |         |  |        |  |       |  |     |  |       |  
|                   |    |   |  | contract/notional amount ($ million)             |  |      | 480       |      |  |      |          |      |  |      |        |           |  |                 |        |            |  |  |        |  |  |  |        |  |        |  | 480   |  |     |  | 14    |  
|                   |    |   |  | volume (m bbl)                                   |  |      | 42        |      |  |      |          |      |  |      |        |           |  |                 |        |            |  |  |        |  |  |  |        |  |        |  |       |  |     |  |       |  
|                   |    |   |  | average pay/receive price ($/bbl)                |  |      | 11.2/11.5 |      |  |      |          |      |  |      |        |           |  |                 |        |            |  |  |        |  |  |  |        |  |        |  |       |  |     |  |       |  
|                   |    |   |  |                                                  |  |      |           |      |  |      |           |      |  |      |         |           |  |                 |         |            |  |  |         |  |  |  |         |  |        |  |       |  |     |  |       |  
|Natural gas swaps  |    |   |  |                                                  |  |      |           |      |  |      |           |      |  |      |         |           |  |                 |         |            |  |  |         |  |  |  |         |  |        |  |       | 
|                   | (a | ) |  | Buy fixed price/sell variable price contracts:   |  |      |           |      |  |      |           |      |  |      |         |           |  |                 |         |            |  |  |         |  |  |  |         |  |        |  |       |  |     |  |       |  
|                   |    |   |  | contract/notional amount ($ million)             |  |      | 3,547     |      |  |      | 671       |      |  |      | 299     |           |  |                 | 140     |            |  |  | 66      |  |  |  | 26      |  |        |  | 4,749 |  |     |  | (943  | )
|                   |    |   |  | volume (thousand million cubic feet bcf)       |  |      | 1,454     |      |  |      | 376       |      |  |      | 182     |           |  |                 | 94      |            |  |  | 50      |  |  |  | 40      |  |        |  |       |  |     |  |       |  
|                   |    |   |  | average pay/receive price ($/thousand cf)        |  |      | 2.8/2.4   |      |  |      | 3.2/1.8   |      |  |      | 3.1/1.7 |           |  |                 | 3.1/1.5 |            |  |  | 2.9/1.3 |  |  |  | 2.6/0.7 |  |        |  |       |  |     |  |       |  
|                   | (b | ) |  | Buy variable/sell fixed price contracts:         |  |      |           |      |  |      |           |      |  |      |         |           |  |                 |         |            |  |  |         |  |  |  |         |  |        |  |       |  |     |  |       |  
|                   |    |   |  | contract/notional amount ($ million)             |  |      | 3,743     |      |  |      | 746       |      |  |      | 248     |           |  |                 | 70      |            |  |  | 58      |  |  |  | 72      |  |        |  | 4,937 |  |     |  | 1,099 |  
|                   |    |   |  | volume (bcf)                                     |  |      | 1,467     |      |  |      | 374       |      |  |      | 161     |           |  |                 | 76      |            |  |  | 59      |  |  |  | 79      |  |        |  |       |  |     |  |       |  
|                   |    |   |  | average pay/receive price ($/thousand cf)        |  |      | 2.4/3.5   |      |  |      | 2.0/3.5   |      |  |      | 1.5/3.5 |           |  |                 | 0.9/3.3 |            |  |  | 1.0/3.1 |  |  |  | 0.9/2.9 |  |        |  |       |  |     |  |       |  
|                   |    |   |  |                                                  |  |      |           |      |  |      |           |      |  |      |         |           |  |                 |         |            |  |  |         |  |  |  |         |  |        |  |       |  |     |  |       |  
|Total              |    |   |  |                                                  |  |      |           |      |  |      |           |      |  |      |         |           |  |                 |         |            |  |  |         |  |  |  |         |  | 12,947 |  |       |  | 173 | 
|                   |    |   |  |                                                  |  |      |           |      |  |      |           |      |  |      |         |           |  |                 |         |            |  |  |         |  |  |  |         |  |        |  |       |  |     |  |       |  

Royal Dutch/Shell Group of Companies   G45



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##### Table of Contents



Commodity options held for trading purposes

|                      |                                      |           |      |       |      |  |      |      |                 |  |            |      |  |  |        |       |  |  |    |      |  
|--------------------- | ------------------------------------ | --------- | ---- | ----- | ---- |  | ---- | ---- | --------------- |  | ---------- | ---- |  |  | ------ | ----- |  |  | -- | ---- | -
|2002                  |                                      | $ million
|                      |                                      |          
|                      |                                      |           | 2003 |       | 2004 |  | 2005 |      | Total contract/ |  | Estimated 
|                      |                                      |           |      |       |      |  |      |      | notional amount |  | fair value
|                      |                                      |           |      |       |      |  |      |      |                 |  |           
|Crude oil buy calls   |                                      |           |      |       |      |  |      |      |                 |  |            |      |  |  |        |       |  |  |    |     
|                      | contract/notional amount ($ million) |           |      | 711   |      |  |      | 13   |                 |  |            |     |  |  |        | 724   |  |  |    | 57   |  
|                      | volume (m bbl)                       |           |      | 26    |      |  |      | *    |                 |  |            |     |  |  |        |       |  |  |    |      |  
|                      | average strike price ($/bbl)         |           |      | 27.6  |      |  |      | 23.1 |                 |  |            |     |  |  |        |       |  |  |    |      |  
|                      |                                      |           |      |       |      |  |      |      |                 |  |            |      |  |  |        |       |  |  |    |      |  
|Crude oil sell calls  |                                      |           |      |       |      |  |      |      |                 |  |            |      |  |  |        |       |  |  |    |     
|                      | contract/notional amount ($ million) |           |      | 620   |      |  |      | 59   |                 |  |            | 1    |  |  |        | 680   |  |  |    | (70  | )
|                      | volume (m bbl)                       |           |      | 23    |      |  |      | 2    |                 |  |            | *    |  |  |        |       |  |  |    |      |  
|                      | average strike price ($/bbl)         |           |      | 26.5  |      |  |      | 27.2 |                 |  |            | 25.1 |  |  |        |       |  |  |    |      |  
|                      |                                      |           |      |       |      |  |      |      |                 |  |            |      |  |  |        |       |  |  |    |      |  
|Crude oil buy put     |                                      |           |      |       |      |  |      |      |                 |  |            |      |  |  |        |       |  |  |    |     
|                      | contract/notional amount ($ million) |           |      | 416   |      |  |      | 90   |                 |  |            |     |  |  |        | 506   |  |  |    | 19   |  
|                      | volume (m bbl)                       |           |      | 21    |      |  |      | 4    |                 |  |            |     |  |  |        |       |  |  |    |      |  
|                      | average strike price ($/bbl)         |           |      | 20.2  |      |  |      | 20.4 |                 |  |            |     |  |  |        |       |  |  |    |      |  
|                      |                                      |           |      |       |      |  |      |      |                 |  |            |      |  |  |        |       |  |  |    |      |  
|Crude oil sell put    |                                      |           |      |       |      |  |      |      |                 |  |            |      |  |  |        |       |  |  |    |     
|                      | contract/notional amount ($ million) |           |      | 396   |      |  |      | 49   |                 |  |            |     |  |  |        | 445   |  |  |    | (19  | )
|                      | volume (m bbl)                       |           |      | 19    |      |  |      | 2    |                 |  |            |     |  |  |        |       |  |  |    |      |  
|                      | average strike price ($/bbl)         |           |      | 21.3  |      |  |      | 21.0 |                 |  |            |     |  |  |        |       |  |  |    |      |  
|                      |                                      |           |      |       |      |  |      |      |                 |  |            |      |  |  |        |       |  |  |    |      |  
|Natural gas buy call  |                                      |           |      |       |      |  |      |      |                 |  |            |      |  |  |        |       |  |  |    |     
|                      | contract/notional amount ($ million) |           |      | 7,284 |      |  |      | 814  |                 |  |            | 51   |  |  |        | 8,149 |  |  |    | 654  |  
|                      | volume (bcf)                         |           |      | 1,375 |      |  |      | 150  |                 |  |            | 12   |  |  |        |       |  |  |    |      |  
|                      | average strike price ($/thousand cf) |           |      | 5.3   |      |  |      | 5.4  |                 |  |            | 4.3  |  |  |        |       |  |  |    |      |  
|                      |                                      |           |      |       |      |  |      |      |                 |  |            |      |  |  |        |       |  |  |    |      |  
|Natural gas sell call |                                      |           |      |       |      |  |      |      |                 |  |            |      |  |  |        |       |  |  |    |     
|                      | contract/notional amount ($ million) |           |      | 5,336 |      |  |      | 654  |                 |  |            | 48   |  |  |        | 6,038 |  |  |    | (468 | )
|                      | volume (bcf)                         |           |      | 971   |      |  |      | 114  |                 |  |            | 8    |  |  |        |       |  |  |    |      |  
|                      | average strike price ($/thousand cf) |           |      | 5.5   |      |  |      | 5.7  |                 |  |            | 5.9  |  |  |        |       |  |  |    |      |  
|                      |                                      |           |      |       |      |  |      |      |                 |  |            |      |  |  |        |       |  |  |    |      |  
|Natural gas buy put   |                                      |           |      |       |      |  |      |      |                 |  |            |      |  |  |        |       |  |  |    |     
|                      | contract/notional amount ($ million) |           |      | 3,975 |      |  |      | 411  |                 |  |            | 47   |  |  |        | 4,433 |  |  |    | 132  |  
|                      | volume (bcf)                         |           |      | 1,157 |      |  |      | 124  |                 |  |            | 13   |  |  |        |       |  |  |    |      |  
|                      | average strike price ($/thousand cf) |           |      | 3.4   |      |  |      | 3.3  |                 |  |            | 3.7  |  |  |        |       |  |  |    |      |  
|                      |                                      |           |      |       |      |  |      |      |                 |  |            |      |  |  |        |       |  |  |    |      |  
|Natural gas sell put  |                                      |           |      |       |      |  |      |      |                 |  |            |      |  |  |        |       |  |  |    |     
|                      | contract/notional amount ($ million) |           |      | 5,481 |      |  |      | 467  |                 |  |            | 71   |  |  |        | 6,019 |  |  |    | (209 | )
|                      | volume (bcf)                         |           |      | 1,483 |      |  |      | 130  |                 |  |            | 21   |  |  |        |       |  |  |    |      |  
|                      | average strike price ($/thousand cf) |           |      | 3.7   |      |  |      | 3.6  |                 |  |            | 3    |  |  |        |       |  |  |    |      |  
|                      |                                      |           |      |       |      |  |      |      |                 |  |            |      |  |  |        |       |  |  |    |      |  
|Total                 |                                      |           |      |       |      |  |      |      |                 |  |            |      |  |  | 26,994 |       |  |  | 96 |     
|                      |                                      |           |      |       |      |  |      |      |                 |  |            |      |  |  |        |       |  |  |    |      |  



---

|* |  | less than one million barrels
|- |  | -----------------------------

Group companies also held chemical and oil products options/swaptions at
December 31, 2002 with a contract/notional amount of $51 million (2001: $46
million) and estimated fair value less than $1 million (2001: $4 million) and
expected maturity 20032004 (20022003).

G46   Royal Dutch/Shell Group of Companies



---



##### Table of Contents



|                      |                                      |           |      |       |      |  |                 |       |            |  |        |       |  |  |     |      |  
|--------------------- | ------------------------------------ | --------- | ---- | ----- | ---- |  | --------------- | ----- | ---------- |  | ------ | ----- |  |  | --- | ---- | -
|2001                  |                                      | $ million
|                      |                                      |          
|                      |                                      |           |      |       |      |  | Total contract/ |       | Estimated 
|                      |                                      |           | 2002 |       | 2003 |  | notional amount |       | fair value
|                      |                                      |           |      |       |      |  |                 |       |           
|Crude oil buy calls   |                                      |           |      |       |      |  |                 |       |            |  |        |       |  |  |     |     
|                      | contract/notional amount ($ million) |           |      | 690   |      |  |                 | 154   |            |  |        | 844   |  |  |     | 34   |  
|                      | volume (m bbl)                       |           |      | 25    |      |  |                 | 6     |            |  |        |       |  |  |     |      |  
|                      | average strike price ($/bbl)         |           |      | 27.3  |      |  |                 | 25.6  |            |  |        |       |  |  |     |      |  
|                      |                                      |           |      |       |      |  |                 |       |            |  |        |       |  |  |     |      |  
|Crude oil sell calls  |                                      |           |      |       |      |  |                 |       |            |  |        |       |  |  |     |     
|                      | contract/notional amount ($ million) |           |      | 476   |      |  |                 | 77    |            |  |        | 553   |  |  |     | (22  | )
|                      | volume (m bbl)                       |           |      | 18    |      |  |                 | 4     |            |  |        |       |  |  |     |      |  
|                      | average strike price ($/bbl)         |           |      | 26.1  |      |  |                 | 22.4  |            |  |        |       |  |  |     |      |  
|                      |                                      |           |      |       |      |  |                 |       |            |  |        |       |  |  |     |      |  
|Crude oil buy put     |                                      |           |      |       |      |  |                 |       |            |  |        |       |  |  |     |     
|                      | contract/notional amount ($ million) |           |      | 638   |      |  |                 | 11    |            |  |        | 649   |  |  |     | 55   |  
|                      | volume (m bbl)                       |           |      | 32    |      |  |                 | 1     |            |  |        |       |  |  |     |      |  
|                      | average strike price ($/bbl)         |           |      | 20.1  |      |  |                 | 18.2  |            |  |        |       |  |  |     |      |  
|                      |                                      |           |      |       |      |  |                 |       |            |  |        |       |  |  |     |      |  
|Crude oil sell put    |                                      |           |      |       |      |  |                 |       |            |  |        |       |  |  |     |     
|                      | contract/notional amount ($ million) |           |      | 706   |      |  |                 | 72    |            |  |        | 778   |  |  |     | (93  | )
|                      | volume (m bbl)                       |           |      | 34    |      |  |                 | 4     |            |  |        |       |  |  |     |      |  
|                      | average strike price ($/bbl)         |           |      | 20.8  |      |  |                 | 18.0  |            |  |        |       |  |  |     |      |  
|                      |                                      |           |      |       |      |  |                 |       |            |  |        |       |  |  |     |      |  
|Natural gas buy call  |                                      |           |      |       |      |  |                 |       |            |  |        |       |  |  |     |     
|                      | contract/notional amount ($ million) |           |      | 3,453 |      |  |                 | 1,005 |            |  |        | 4,458 |  |  |     | 203  |  
|                      | volume (bcf)                         |           |      | 752   |      |  |                 | 229   |            |  |        |       |  |  |     |      |  
|                      | average strike price ($/thousand cf) |           |      | 4.6   |      |  |                 | 4.4   |            |  |        |       |  |  |     |      |  
|                      |                                      |           |      |       |      |  |                 |       |            |  |        |       |  |  |     |      |  
|Natural gas sell call |                                      |           |      |       |      |  |                 |       |            |  |        |       |  |  |     |     
|                      | contract/notional amount ($ million) |           |      | 2,925 |      |  |                 | 1,060 |            |  |        | 3,985 |  |  |     | (149 | )
|                      | volume (bcf)                         |           |      | 633   |      |  |                 | 213   |            |  |        |       |  |  |     |      |  
|                      | average strike price ($/thousand cf) |           |      | 4.6   |      |  |                 | 5.0   |            |  |        |       |  |  |     |      |  
|                      |                                      |           |      |       |      |  |                 |       |            |  |        |       |  |  |     |      |  
|Natural gas buy put   |                                      |           |      |       |      |  |                 |       |            |  |        |       |  |  |     |     
|                      | contract/notional amount ($ million) |           |      | 2,552 |      |  |                 | 623   |            |  |        | 3,175 |  |  |     | 832  |  
|                      | volume (bcf)                         |           |      | 760   |      |  |                 | 175   |            |  |        |       |  |  |     |      |  
|                      | average strike price ($/thousand cf) |           |      | 3.4   |      |  |                 | 3.6   |            |  |        |       |  |  |     |      |  
|                      |                                      |           |      |       |      |  |                 |       |            |  |        |       |  |  |     |      |  
|Natural gas sell put  |                                      |           |      |       |      |  |                 |       |            |  |        |       |  |  |     |     
|                      | contract/notional amount ($ million) |           |      | 2,966 |      |  |                 | 654   |            |  |        | 3,620 |  |  |     | (938 | )
|                      | volume (bcf)                         |           |      | 855   |      |  |                 | 189   |            |  |        |       |  |  |     |      |  
|                      | average strike price ($/thousand cf) |           |      | 3.5   |      |  |                 | 3.5   |            |  |        |       |  |  |     |      |  
|                      |                                      |           |      |       |      |  |                 |       |            |  |        |       |  |  |     |      |  
|Total                 |                                      |           |      |       |      |  |                 |       |            |  | 18,062 |       |  |  | (78 | )   
|                      |                                      |           |      |       |      |  |                 |       |            |  |        |       |  |  |     |      |  

Royal Dutch/Shell Group of Companies   G47



---



##### Table of Contents



Commodity futures held for trading purposes

|                          |    |           |  |                                        |  |      |       |      |  |      |     |                 |  |            |    |  |        |  |       |  |     |   |      |  
|------------------------- | -- | --------- |  | -------------------------------------- |  | ---- | ----- | ---- |  | ---- | --- | --------------- |  | ---------- | -- |  | ------ |  | ----- |  | --- | - | ---- | -
|2002                      |    | $ million
|                          |    |          
|                          |    |           |  |                                        |  |      |       |      |  |      |     | Total contract/ |  | Estimated 
|                          |    |           |  |                                        |  | 2003 |       | 2004 |  | 2005 |     | notional amount |  | fair value
|                          |    |           |  |                                        |  |      |       |      |  |      |     |                 |  |           
|IPE Brent futures         |    |           |  |                                        |  |      |       |      |  |      |     |                 |  |            |    |  |        |  |       | 
|                          | (a | )         |  | Short contracts:                       |  |      |       |      |  |      |     |                 |  |            |    |  |        |  |       |  |     |   |      |  
|                          |    |           |  | contract/notional amount ($ million)   |  |      | 421   |      |  |      |    |                 |  |            |   |  |        |  | 421   |  |     |   | (24  | )
|                          |    |           |  | volume (m bbl)                         |  |      | 16    |      |  |      |    |                 |  |            |   |  |        |  |       |  |     |   |      |  
|                          |    |           |  | weighted average price ($/bbl)         |  |      | 26    |      |  |      |    |                 |  |            |   |  |        |  |       |  |     |   |      |  
|                          | (b | )         |  | Long contracts:                        |  |      |       |      |  |      |     |                 |  |            |    |  |        |  |       |  |     |   |      |  
|                          |    |           |  | contract/notional amount ($ million)   |  |      | 184   |      |  |      |    |                 |  |            |   |  |        |  | 184   |  |     |   | 20   |  
|                          |    |           |  | volume (m bbl)                         |  |      | 7     |      |  |      |    |                 |  |            |   |  |        |  |       |  |     |   |      |  
|                          |    |           |  | weighted average price ($/bbl)         |  |      | 26    |      |  |      |    |                 |  |            |   |  |        |  |       |  |     |   |      |  
|                          |    |           |  |                                        |  |      |       |      |  |      |     |                 |  |            |    |  |        |  |       |  |     |   |      |  
|IPE Gasoil futures        |    |           |  |                                        |  |      |       |      |  |      |     |                 |  |            |    |  |        |  |       | 
|                          | (a | )         |  | Short contracts:                       |  |      |       |      |  |      |     |                 |  |            |    |  |        |  |       |  |     |   |      |  
|                          |    |           |  | contract/notional amount ($ million)   |  |      | 417   |      |  |      |    |                 |  |            |   |  |        |  | 417   |  |     |   | (31  | )
|                          |    |           |  | volume (m bbl)                         |  |      | 13    |      |  |      |    |                 |  |            |   |  |        |  |       |  |     |   |      |  
|                          |    |           |  | weighted average price ($/bbl)         |  |      | 32    |      |  |      |    |                 |  |            |   |  |        |  |       |  |     |   |      |  
|                          | (b | )         |  | Long contracts:                        |  |      |       |      |  |      |     |                 |  |            |    |  |        |  |       |  |     |   |      |  
|                          |    |           |  | contract/notional amount ($ million)   |  |      | 137   |      |  |      |    |                 |  |            |   |  |        |  | 137   |  |     |   | 6    |  
|                          |    |           |  | volume (m bbl)                         |  |      | 5     |      |  |      |    |                 |  |            |   |  |        |  |       |  |     |   |      |  
|                          |    |           |  | weighted average price ($/bbl)         |  |      | 29    |      |  |      |    |                 |  |            |   |  |        |  |       |  |     |   |      |  
|                          |    |           |  |                                        |  |      |       |      |  |      |     |                 |  |            |    |  |        |  |       |  |     |   |      |  
|Nymex crude oil futures   |    |           |  |                                        |  |      |       |      |  |      |     |                 |  |            |    |  |        |  |       | 
|                          | (a | )         |  | Short contracts:                       |  |      |       |      |  |      |     |                 |  |            |    |  |        |  |       |  |     |   |      |  
|                          |    |           |  | contract/notional amount ($ million)   |  |      | 1,836 |      |  |      | 50  |                 |  |            |   |  |        |  | 1,886 |  |     |   | (100 | )
|                          |    |           |  | volume (m bbl)                         |  |      | 65    |      |  |      | 2   |                 |  |            |   |  |        |  |       |  |     |   |      |  
|                          |    |           |  | weighted average price ($/bbl)         |  |      | 28    |      |  |      | 23  |                 |  |            |   |  |        |  |       |  |     |   |      |  
|                          | (b | )         |  | Long contracts:                        |  |      |       |      |  |      |     |                 |  |            |    |  |        |  |       |  |     |   |      |  
|                          |    |           |  | contract/notional amount ($ million)   |  |      | 2,003 |      |  |      | 20  |                 |  |            |   |  |        |  | 2,023 |  |     |   | 140  |  
|                          |    |           |  | volume (m bbl)                         |  |      | 73    |      |  |      | *   |                 |  |            |   |  |        |  |       |  |     |   |      |  
|                          |    |           |  | weighted average price ($/bbl)         |  |      | 28    |      |  |      | 23  |                 |  |            |   |  |        |  |       |  |     |   |      |  
|                          |    |           |  |                                        |  |      |       |      |  |      |     |                 |  |            |    |  |        |  |       |  |     |   |      |  
|Nymex oil product futures |    |           |  |                                        |  |      |       |      |  |      |     |                 |  |            |    |  |        |  |       | 
|                          | (a | )         |  | Short contracts:                       |  |      |       |      |  |      |     |                 |  |            |    |  |        |  |       |  |     |   |      |  
|                          |    |           |  | contract/notional amount ($ million)   |  |      | 1,312 |      |  |      |    |                 |  |            |   |  |        |  | 1,312 |  |     |   | (78  | )
|                          |    |           |  | volume (m bbl)                         |  |      | 51    |      |  |      |    |                 |  |            |   |  |        |  |       |  |     |   |      |  
|                          |    |           |  | weighted average price ($/bbl)         |  |      | 26    |      |  |      |    |                 |  |            |   |  |        |  |       |  |     |   |      |  
|                          | (b | )         |  | Long contracts:                        |  |      |       |      |  |      |     |                 |  |            |    |  |        |  |       |  |     |   |      |  
|                          |    |           |  | contract/notional amount ($ million)   |  |      | 1,129 |      |  |      |    |                 |  |            |   |  |        |  | 1,129 |  |     |   | 41   |  
|                          |    |           |  | volume (m bbl)                         |  |      | 45    |      |  |      |    |                 |  |            |   |  |        |  |       |  |     |   |      |  
|                          |    |           |  | weighted average price ($/bbl)         |  |      | 25    |      |  |      |    |                 |  |            |   |  |        |  |       |  |     |   |      |  
|                          |    |           |  |                                        |  |      |       |      |  |      |     |                 |  |            |    |  |        |  |       |  |     |   |      |  
|Nymex natural gas futures |    |           |  |                                        |  |      |       |      |  |      |     |                 |  |            |    |  |        |  |       | 
|                          | (a | )         |  | Short contracts:                       |  |      |       |      |  |      |     |                 |  |            |    |  |        |  |       |  |     |   |      |  
|                          |    |           |  | contract/notional amount ($ million)   |  |      | 1,452 |      |  |      | 278 |                 |  |            |   |  |        |  | 1,730 |  |     |   | (293 | )
|                          |    |           |  | volume (bcf)                           |  |      | 358   |      |  |      | 71  |                 |  |            |   |  |        |  |       |  |     |   |      |  
|                          |    |           |  | weighted average price ($/thousand cf) |  |      | 4     |      |  |      | 4   |                 |  |            |   |  |        |  |       |  |     |   |      |  
|                          | (b | )         |  | Long contracts:                        |  |      |       |      |  |      |     |                 |  |            |    |  |        |  |       |  |     |   |      |  
|                          |    |           |  | contract/notional amount ($ million)   |  |      | 1,411 |      |  |      | 309 |                 |  |            | 24 |  |        |  | 1,744 |  |     |   | 284  |  
|                          |    |           |  | volume (bcf)                           |  |      | 348   |      |  |      | 78  |                 |  |            | 6  |  |        |  |       |  |     |   |      |  
|                          |    |           |  | weighted average price ($/thousand cf) |  |      | 4     |      |  |      | 4   |                 |  |            | 4  |  |        |  |       |  |     |   |      |  
|                          |    |           |  |                                        |  |      |       |      |  |      |     |                 |  |            |    |  |        |  |       |  |     |   |      |  
|Total                     |    |           |  |                                        |  |      |       |      |  |      |     |                 |  |            |    |  | 10,983 |  |       |  | (35 | )
|                          |    |           |  |                                        |  |      |       |      |  |      |     |                 |  |            |    |  |        |  |       |  |     |   |      |  



---

|* |  | less than one million barrels
|- |  | -----------------------------

Group companies also held electricity futures contracts at December 31, 2002
with a contract/notional amount of $4 million (2001: nil) and an estimated fair
value of $1 million (2001: nil) with expected maturity 2003.

G48   Royal Dutch/Shell Group of Companies



---



##### Table of Contents



|                          |    |           |  |                                        |  |      |      |      |  |      |     |                 |  |            |     |  |       |  |     |  |     |   |     |  
|------------------------- | -- | --------- |  | -------------------------------------- |  | ---- | ---- | ---- |  | ---- | --- | --------------- |  | ---------- | --- |  | ----- |  | --- |  | --- | - | --- | -
|2001                      |    | $ million
|                          |    |          
|                          |    |           |  |                                        |  |      |      |      |  |      |     | Total contract/ |  | Estimated 
|                          |    |           |  |                                        |  | 2002 |      | 2003 |  | 2004 |     | notional amount |  | fair value
|                          |    |           |  |                                        |  |      |      |      |  |      |     |                 |  |           
|IPE Brent futures         |    |           |  |                                        |  |      |      |      |  |      |     |                 |  |            |     |  |       |  |     | 
|                          | (a | )         |  | Short contracts:                       |  |      |      |      |  |      |     |                 |  |            |     |  |       |  |     |  |     |   |     |  
|                          |    |           |  | contract/notional amount ($ million)   |  |      | 243  |      |  |      |    |                 |  |            |    |  |       |  | 243 |  |     |   | (28 | )
|                          |    |           |  | volume (m bbl)                         |  |      | 12   |      |  |      |    |                 |  |            |    |  |       |  |     |  |     |   |     |  
|                          |    |           |  | weighted average price ($/bbl)         |  |      | 19.7 |      |  |      |    |                 |  |            |    |  |       |  |     |  |     |   |     |  
|                          | (b | )         |  | Long contracts:                        |  |      |      |      |  |      |     |                 |  |            |     |  |       |  |     |  |     |   |     |  
|                          |    |           |  | contract/notional amount ($ million)   |  |      | 229  |      |  |      |    |                 |  |            |    |  |       |  | 229 |  |     |   | (28 | )
|                          |    |           |  | volume (m bbl)                         |  |      | 12   |      |  |      |    |                 |  |            |    |  |       |  |     |  |     |   |     |  
|                          |    |           |  | weighted average price ($/bbl)         |  |      | 19.6 |      |  |      |    |                 |  |            |    |  |       |  |     |  |     |   |     |  
|                          |    |           |  |                                        |  |      |      |      |  |      |     |                 |  |            |     |  |       |  |     |  |     |   |     |  
|IPE Gasoil futures        |    |           |  |                                        |  |      |      |      |  |      |     |                 |  |            |     |  |       |  |     | 
|                          | (a | )         |  | Short contracts:                       |  |      |      |      |  |      |     |                 |  |            |     |  |       |  |     |  |     |   |     |  
|                          |    |           |  | contract/notional amount ($ million)   |  |      | 62   |      |  |      |    |                 |  |            |    |  |       |  | 62  |  |     |   | 10  |  
|                          |    |           |  | volume (m bbl)                         |  |      | 2.7  |      |  |      |    |                 |  |            |    |  |       |  |     |  |     |   |     |  
|                          |    |           |  | weighted average price ($/bbl)         |  |      | 22.9 |      |  |      |    |                 |  |            |    |  |       |  |     |  |     |   |     |  
|                          | (b | )         |  | Long contracts:                        |  |      |      |      |  |      |     |                 |  |            |     |  |       |  |     |  |     |   |     |  
|                          |    |           |  | contract/notional amount ($ million)   |  |      | 35   |      |  |      |    |                 |  |            |    |  |       |  | 35  |  |     |   | (1  | )
|                          |    |           |  | volume (m bbl)                         |  |      | 1.6  |      |  |      |    |                 |  |            |    |  |       |  |     |  |     |   |     |  
|                          |    |           |  | weighted average price ($/bbl)         |  |      | 22.9 |      |  |      |    |                 |  |            |    |  |       |  |     |  |     |   |     |  
|                          |    |           |  |                                        |  |      |      |      |  |      |     |                 |  |            |     |  |       |  |     |  |     |   |     |  
|Nymex crude oil futures   |    |           |  |                                        |  |      |      |      |  |      |     |                 |  |            |     |  |       |  |     | 
|                          | (a | )         |  | Short contracts:                       |  |      |      |      |  |      |     |                 |  |            |     |  |       |  |     |  |     |   |     |  
|                          |    |           |  | contract/notional amount ($ million)   |  |      | 67   |      |  |      |    |                 |  |            |    |  |       |  | 67  |  |     |   | (4  | )
|                          |    |           |  | volume (m bbl)                         |  |      | 3    |      |  |      |    |                 |  |            |    |  |       |  |     |  |     |   |     |  
|                          |    |           |  | weighted average price ($/bbl)         |  |      | 20.5 |      |  |      |    |                 |  |            |    |  |       |  |     |  |     |   |     |  
|                          | (b | )         |  | Long contracts:                        |  |      |      |      |  |      |     |                 |  |            |     |  |       |  |     |  |     |   |     |  
|                          |    |           |  | contract/notional amount ($ million)   |  |      | 50   |      |  |      |    |                 |  |            |    |  |       |  | 50  |  |     |   | (7  | )
|                          |    |           |  | volume (m bbl)                         |  |      | 2    |      |  |      |    |                 |  |            |    |  |       |  |     |  |     |   |     |  
|                          |    |           |  | weighted average price ($/bbl)         |  |      | 20.3 |      |  |      |    |                 |  |            |    |  |       |  |     |  |     |   |     |  
|                          |    |           |  |                                        |  |      |      |      |  |      |     |                 |  |            |     |  |       |  |     |  |     |   |     |  
|Nymex oil product futures |    |           |  |                                        |  |      |      |      |  |      |     |                 |  |            |     |  |       |  |     | 
|                          | (a | )         |  | Short contracts:                       |  |      |      |      |  |      |     |                 |  |            |     |  |       |  |     |  |     |   |     |  
|                          |    |           |  | contract/notional amount ($ million)   |  |      | 11   |      |  |      |    |                 |  |            |    |  |       |  | 11  |  |     |   | 2   |  
|                          |    |           |  | volume (m bbl)                         |  |      | *    |      |  |      |    |                 |  |            |    |  |       |  |     |  |     |   |     |  
|                          |    |           |  | weighted average price ($/bbl)         |  |      | 24.9 |      |  |      |    |                 |  |            |    |  |       |  |     |  |     |   |     |  
|                          | (b | )         |  | Long contracts:                        |  |      |      |      |  |      |     |                 |  |            |     |  |       |  |     |  |     |   |     |  
|                          |    |           |  | contract/notional amount ($ million)   |  |      | 58   |      |  |      |    |                 |  |            |    |  |       |  | 58  |  |     |   | 11  |  
|                          |    |           |  | volume (m bbl)                         |  |      | 2    |      |  |      |    |                 |  |            |    |  |       |  |     |  |     |   |     |  
|                          |    |           |  | weighted average price ($/bbl)         |  |      | 26.2 |      |  |      |    |                 |  |            |    |  |       |  |     |  |     |   |     |  
|                          |    |           |  |                                        |  |      |      |      |  |      |     |                 |  |            |     |  |       |  |     |  |     |   |     |  
|Nymex natural gas futures |    |           |  |                                        |  |      |      |      |  |      |     |                 |  |            |     |  |       |  |     | 
|                          | (a | )         |  | Short contracts:                       |  |      |      |      |  |      |     |                 |  |            |     |  |       |  |     |  |     |   |     |  
|                          |    |           |  | contract/notional amount ($ million)   |  |      | 258  |      |  |      | 29  |                 |  |            |    |  |       |  | 287 |  |     |   | 55  |  
|                          |    |           |  | volume (bcf)                           |  |      | 69   |      |  |      | 8   |                 |  |            |    |  |       |  |     |  |     |   |     |  
|                          |    |           |  | weighted average price ($/thousand cf) |  |      | 3.7  |      |  |      | 3.8 |                 |  |            |    |  |       |  |     |  |     |   |     |  
|                          | (b | )         |  | Long contracts:                        |  |      |      |      |  |      |     |                 |  |            |     |  |       |  |     |  |     |   |     |  
|                          |    |           |  | contract/notional amount ($ million)   |  |      | 369  |      |  |      | 38  |                 |  |            | 4   |  |       |  | 411 |  |     |   | (81 | )
|                          |    |           |  | volume (bcf)                           |  |      | 97   |      |  |      | 10  |                 |  |            | 1   |  |       |  |     |  |     |   |     |  
|                          |    |           |  | weighted average price ($/thousand cf) |  |      | 3.8  |      |  |      | 3.9 |                 |  |            | 4.7 |  |       |  |     |  |     |   |     |  
|                          |    |           |  |                                        |  |      |      |      |  |      |     |                 |  |            |     |  |       |  |     |  |     |   |     |  
|Total                     |    |           |  |                                        |  |      |      |      |  |      |     |                 |  |            |     |  | 1,453 |  |     |  | (71 | )
|                          |    |           |  |                                        |  |      |      |      |  |      |     |                 |  |            |     |  |       |  |     |  |     |   |     |  



---

|* |  | less than one million barrels
|- |  | -----------------------------

Futures contracts shown above represent unmatched positions. The total
contract/notional amount of short contracts represents an aggregation of Group
companies positions where, at December 31, 2002 and 2001 respectively, sales
contracts exceed the purchase contracts with the same maturity date. The total
contract/notional amount of long contracts represents an aggregation of Group
companies positions where, at December 31, 2002 and 2001 respectively,
purchase contracts exceed the sales contracts with the same maturity date.

Royal Dutch/Shell Group of Companies   G49



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G50   Royal Dutch/Shell Group of Companies



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##### Table of Contents






Exhibits

EXHIBIT INDEX

|        |      |             |  |                                                                                                                                                                                                                                                                                                                |  | 
|------- | ---- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|Exhibit |      |             |  |                                                                                                                                                                                                                                                                                                               
|No.     |      | Description |  |                                                                                                                                                                                                                                                                                                               
|        |      |             |  |                                                                                                                                                                                                                                                                                                               
|        | 1.1  |             |  | Articles of Association of Royal Dutch                                                                                                                                                                                                                                                                         |  | 
|        | 1.2  |             |  | Memorandum and Articles of Association of Shell Transport (incorporated by reference to the Report of Foreign
Issuer on Form
6-K (Commission File No. 1-4039) of Shell Transport furnished to the Securities and Exchange Commission on
June 21, 2002)                                                         |  | 
|        | 4.1  |             |  | Adjustment Agreement between Royal Dutch and Shell Transport dated July 5, 1907, and certain amendments thereto                                                                                                                                                                                                |  | 
|        | 4.2  |             |  | Shell Petroleum N.V. Stock Option Plan, as amended (incorporated by reference to the Post-Effective Amendment
No. 1 to Registration Statement on Form S-8 (Registration No. 333-7590) of Royal Dutch and Shell Transport filed
with the Securities and Exchange Commission on June 28, 2001)                   |  | 
|        | 4.3  |             |  | Shell Petroleum Company Limited Stock Option Plan (1967), as amended (incorporated by reference to the
Post-Effective Amendment No. 1 to Registration Statement on Form S-8 (Registration No. 333-7590) of Royal Dutch
and Shell Transport filed with the Securities and Exchange Commission on June 28, 2001) |  | 
|        | 8    |             |  | Significant Group companies as at December 31, 2002                                                                                                                                                                                                                                                            |  | 
|        | 23.1 |             |  | Consent of KPMG Accountants N.V., The Hague                                                                                                                                                                                                                                                                    |  | 
|        | 23.2 |             |  | Consent of PricewaterhouseCoopers LLP, London                                                                                                                                                                                                                                                                  |  | 
|        | 23.3 |             |  | Consent of KPMG Accountants N.V., The Hague and PricewaterhouseCoopers LLP, London                                                                                                                                                                                                                             |  | 
|        | 23.4 |             |  | Consent of KPMG Accountants N.V., The Hague                                                                                                                                                                                                                                                                    |  | 
|        | 23.5 |             |  | Consent of KPMG Accountants N.V., The Hague and PricewaterhouseCoopers LLP, London                                                                                                                                                                                                                             |  |