john hollowell – deepwater operations
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ROYAL DUTCH SHELL PLC
INVESTING FOR SUSTAINABLE GROWTH
1 Copyright of Royal Dutch Shell plc 29 November 2011
HOUSTON/SHREVEPORT
November 2011
JOHN HOLLOWELLEXECUTIVE VICE PRESIDENT DEEPWATER
DEFINITIONS AND CAUTIONARY NOTE
Resources: Our use of the term “resources” in this presentation includes quantities of oil and gas not yet classified as SEC proved oil and gas. Resources are consistent with the Society of Petroleum Engineers 2P and 2C definitions.
The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this presentation “Shell”, “Shell group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this presentation refer to companies in which Royal Dutch Shell either directly or indirectly has control, by having either a majority of the voting rights or the right to exercise a controlling influence. The companies in which Shell has significant influence but not control are referred to as “associated companies” or “associates” and companies in which Shell has joint control are referred to as “jointly controlled entities”. In this presentation, associates and jointly controlled entities are also referred to as “equity-accounted investments”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect (for example, through our 24% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.
This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements
2 Copyright of Royal Dutch Shell plc 29 November 2011
Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, “scheduled”, ‘‘estimate’’, ‘‘expect’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this presentation, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell’s Annual Presentation / Form 20-F for the year ended December 31, 2010 (available at www.shell.com/investor and www.sec.gov ). These factors also should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, 29 November 2011. Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this presentation.
We may have used certain terms in this presentation that United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC, such as resources and oil in place. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov. You can also obtain these forms from the SEC by calling 1-800-SEC-0330.
DEEPWATER DEVELOPMENT HISTORY
2011Tobago
3 Copyright of Royal Dutch Shell plc 29 November 2011
Development concept
MARS-B (GULF OF MEXICO) BC-10 PHASE 2 (CAMPOS, BRAZIL)
GROWTH DELIVERY
DEEPWATER UNDER CONSTRUCTIONCARDAMOM (GULF OF MEXICO)
Phase 1 FPSO Surface System and Subsea View
4 Copyright of Royal Dutch Shell plc 29 November 2011
� TLP design capacity ~100 kboe/d
� West Boreas + South Deimos
� Water depth 950 meters
� Shell 72% (operator)
� Expected peak production ~30 kboe/d
� Argonauta O-North field
� Water depth 1,600 meters
� Shell 50% (operator)
� Expected peak production ~50 kboe/d
� Tie back to Auger platform
� Water depth 830 meters
� Shell 100% (operator)
Part of >250 kboe/d deepwater production under construction
PROGRESS IN GULF OF MEXICO
Cardamom Deep�Auger TLP extended reach
W. Boreas, S. Deimos�>150 million boe resources� Tie-back to Mars B�Shell 72% (operator)
Mars B� FID for new TLP, Shell 72% (operator)
�~100 kboe/d
Vito �>200 million boe resources�~100 kboe/d potential�Shell 55% (operator)
Brutus
NakikaMars
UrsaAuger
SHELL GOM DEEPWATER PRODUCTION
0
250
500
'15+0
250
500
'94 '98 '02 '06 '10
Kboe/d
5 Copyright of Royal Dutch Shell plc 29 November 2011
SHELL LEASEHOLD
�Auger TLP extended reach discovery & appraisal
�> 100 million boe resources�50 kboe/d�Shell 100% (operator)
Stones�Assessing development options�Shell 35% (operator)
NEW HUB EXISTING PRODUCTION HUB
Caesar/Tonga�~50 kboe/d�2009 FID�Shell 22.5%
Perdido
Appomattox�~100 kboe/d hub potential �> 250 million boe resources�Shell 80% (operator)
2010 production ~230,000 boe/d
>250,000 boe/d new potential for Shell
Brutus
Holstein
Auger
0 200 KM
CURRENT RIG LOCATIONS
50
100
Kboe/d
SEISMIC OVERVIEW
NEW GROWTH AT AUGER: CARDAMOM DEEP
PRODUCTION
AugerPlatform
AugerNorth
AugerMain
50
100
6 Copyright of Royal Dutch Shell plc 29 November 2011
0'15+
Cardamom
Main
� Shell 100% (operator) Auger TLP & Cardamom
� Auger 1993: 1st application of a Tension Leg Platform in deepwater (820 meters water depth)
� Cardamom Deep discoveries in 2009/10(>100 million boe resources)
� FID 2011: 50 kboe/d expected peak production
Discovered First OilFirst TLP
1987 1993 2009/10
Deep Cardamomdiscoveries
1999-2004
Subsea-FieldsMacaroniSerranoOreganoHabanaro
Llano
2011
Deep Cardamom Subsea system
FID
~2014
Firstproduction
0'94 '96 '98 '00 '02 '04 '06 '08 '10
PERDIDO –TECHNOLOGY LEADER
� Shell 33.3% (operator); Peak production ~100 kboe/d
� Substantial oil in place > 3 billion boe
� We expect recoverable resources > 400 million boe …… upside from technology development
� First oil in March 2010
� Industry first production in Lower Tertiary
� Development drilling planned for 5+ years
� New world record deepest drilling and production system
RESERVOIR VIEW
7 Copyright of Royal Dutch Shell plc 29 November 2011
system
Seismic overview of Great White
4.8 km5 KM
OVERVIEW SHELL POSITIONS
SHELL BRAZIL PRODUCTION
BRAZIL GROWTH POTENTIAL
Parque das Conchas BC-10 • Start-up phase -1 2009• Phase 2 FID 2010
Gato do Mato BMS-54 Campos
Sao Francisco exploration
EspiritoSanto Basin
Bijupira-Salema
8 Copyright of Royal Dutch Shell plc 29 November 2011
UPSTREAM PRODUCTION
UPSTREAM POTENTIAL
2011-12 KEY WELLS
Gato do Mato BMS-54 discovery• multi-well drilling program in 2011&’12
Santos Basin
Campos Basin
Salema
Divested BMS-8
BC-10 FPSO
Stena Drillmax – Gato do Mato well
PLANS SUBMITTED REQUIRING EAS AND NEW APDS - BY PLAN
GOM: PERMITTING STILL A CHALLENGE
21 4329 29
30
58
31
5565
51 29
47
30 51 51
5224
5
60
33
250
300
350
400
450
Plans: Operator submission to "Deemed Submitted" Plans: "Deemed Submitted" to Final Action (Approval)
Plan Approved to First APD Total time for Plan Approval, 5 Plan Trend
Days
SeptemberAugustJulyJuneMay
9 Copyright of Royal Dutch Shell plc 29 November 2011
DEEPWATER PLANS WITH EA., APDS TARGETING HYDROCARBONS ONLY,
9
92
170
119
171
121
213192
43
107
203191 199
219 219
182 187 190176
232
204
231
203 204
73
158
76
122
62
133 126
238248
98
51
173
146
100
273
126
92
300288 288
173
52
40
47
46
25
2146
27
28
43
41 31
29 29
3031 28
28
58 55
17
46
35
33
50
35 42
24
74
29
30
7648
34
54
9
5224
1
5
73
13
21
165
0
50
100
150
200
Permitting averaging >150 days; 50 pre-Macondo
SAFE AND RELIABLE OPERATIONS
SAFETY CASE ‘BOW TIE’ MODEL: PREVENTION AND RECOVERY – INDUSTRYOUR APPROACH
� Global Standards
� Multiple Barriers
� Well Design
� Training
� Remote Monitoring
Control Control & Barriers& BarriersControl Control & Barriers& Barriers
IncidentIncidentIncidentIncidentResponse & Response & RecoveryRecoveryResponse & Response & RecoveryRecovery
Control Control & Barriers& Barriers
IncidentIncidentResponse & Response & RecoveryRecovery
HAZA
RD
CONSE
QUEN
CES
10 Copyright of Royal Dutch Shell plc 29 November 201110
PREVENTATIVE BARRIERS MINIMIZE LIKELIHOOD OF AN INCIDENT
Technical standards & procedures
Competent staff &
contractors; rigorous drills
Equipment testing &
certification
Safety Case management
of major hazards
Minimum two tested & independent
barriers
Human behaviours & culture
Zero process safety
incidents
+ + + + + =
� Safety Case Approach
� Leadership & Safety CultureMinimize Likelihood
Mitigate Consequences
CONSE
QUEN
CES
STANDARD ASSET INTEGRITY MANAGEMENT INTERNATIONAL RESPONSE
BLOWOUT PREVENTION & CONTAINMENT CAPABILITY
11 Copyright of Royal Dutch Shell plc 29 November 2011
� Founding & permanent Board Member of the Marine Well Containment Company (MWCC)
� MWCC will own & deploy the system in US GOM
� Subsea containment equipment designed for GOM
• Interim system was available Feb 2011
• Expanded system available 2012
� 9 participating members, Shell operator
� Near term the project team will:
• Design a capping toolbox & additional hardware for the subsea injection of dispersant
• Further assess the need for and feasibility of a containment system for shared use
• Assess deployment options
ALASKA – CHUKCHI & BEAUFORT SEA
Chukchi Sea
Beaufort Sea
0 100 SHELL LEASEHOLD
� Preparing for two rig, 2012 drilling program
• up to three Chukchi wells, including Burger
appraisal; up to two Beaufort wells
� Current focus on operational readiness and
securing necessary permits
12 Copyright of Royal Dutch Shell plc 29 November 2011
Burger1990
Crackerjack1991
Klondike1989
CHUKCHI
X-SECTION� Successful leasing in 2005-2008
• #1 Alaska position, 2.4 mln acres
� Proven petroleum province
• well understood North Slope geology
� Multi-billion boe potential in existing Chukchi
& Beaufort Sea discoveries
ROYAL DUTCH SHELL PLC
Q&A
13 Copyright of Royal Dutch Shell plc 29 November 2011
HOUSTON/SHREVEPORT
NOVEMBER 2011
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