shell exploration & production new shell developments in...

Shell Exploration & Production

New Shell Developments in the Gulf of Mexico


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Shell Exploration and Production- Global Operating Model

Growth Areas

EP Americas

EP Africa

EP Russia

EP Asia Pacific

EPEurope

EP MiddleEast & CaspianSea

EPX EPB EPS EPT EPH EPF


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EP Priorities Today

SAFETY TAKES PRIORITY

Our Six EP Business Priorities:1. Production2. Project Delivery 3. Competitive Cost Structure and Effectiveness4. Operational Excellence5. Reserves Replacement6. Grow resource base

People Make it Happen


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EP Americas 2006 Performance

EP Americas 23%

Rest of EP

1. Global Production:3.5 mln boe/d

14%

10%

9%

67%USACanadaOil sandsRest of EPW

3. EP Americas Production:0.8 mln boe/d

2. EP Earnings $15.2 bln

EP Americas 31%

Rest of EP


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Shell EP In The AmericasPinedale (Wyoming)

Gulf of Mexico

Shell Canada

Venezuela

Brazil

Argentina

Asset managed by RPD

Operating Interest managed by RPD

Asset managed outside of RPD

Aera (California)South Texas

Alaska


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North American Gas - USA

GreenRiverBasin

Columbia River Basin

South Texas

Exploration

Production

Pinedale

US Onshore Lower 48Integrated Gas


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Pinedale: Sustainable Development in ActionIntegrated Gas


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Producing Operations: • Merluza• Bijupira-Salema

Development• BC-10 FID’d

FPSO “Fluminense”

Shell OperatedShell Partnership

BC-10

Bijupira-Salema

BS-4Sau PauloRio de Janeiro

Vitoria

MerluzaBC-10 Development

Existing/New Material OilBrazil


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1964 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991

Cook Inlet

Gulf of

Alaska

Chukchi Sea

Beaufort Sea

BeringSea

Alaska

1964 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991

BeaufortSea

2007+

PrudhoeBay

Chukchi Sea

Beaufort Sea

103 Leases

Bristol Bay

33 Leases

TAPS

Historical Drilling Activities

Existing/New Material Oil

Frontier Discoverer 2007


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Unconventional Oil Positions

ColoradoOil Shale

TechnologyDevelopment

Production

Peace River• Current – 10 kboe/d

Aera• Current – 100 kboe/d• Piloting steam recovery of light

oil

AOSP• Current: 170 kboe/d

Key:

*Total gross daily capacity


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Gulf of Mexico

Na Kika

Ursa

MP-252

CognacWD-143

Enchilada

Auger

BoxerBullwinkle

Cougar

Fairway

Yellowhammer

NPI-975

BZ A19 WC-565

HolsteinPerdido

Deimos

Deepwater PlatformsNon-OperatedShelf PlatformsDevelopments

Mars

Ram Powell Marlin

Brutus


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Importance of GOM Deepwater• More than half GOM active leases are in deepwater• 12 new deepwater discoveries in 2006• In 2006, 70% of oil and 40% of gas produced in the GOM

came from deepwater leases

• 32% increase in number of tracts leased in 1500 to 4999 foot water depth

• 29% increase in tracts leased in 5000 to 7499 foot water depth

• MMS projects oil production in GOM to exceed 1.7 million bopd, could be as much as 2.1 in the next 10 years; gas production to level at 8 billion cfpd, could reach 9

*Minerals Management Data


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New Challenges in Deepwater

• Ultra-deep water and remote locations• Harsh environments• Small and/or sub-economic accumulations

• Viscous oil, low energy drive and lift• High cost drilling & infrastructure

• Lack of local logistics / service industry

• Ultra-deep water and remote locations• Harsh environments• Small and/or sub-economic accumulations

• Viscous oil, low energy drive and lift• High cost drilling & infrastructure

• Lack of local logistics / service industry

Deepwater fields getting more complex:

no single technology will “unlock”


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Deepwater GOM - PerdidoMaterial Opportunities, Increasingly Challenging EnvironmentPaleogene Play Opener

Perdido

Paleogene Play 3 - 6 bln boe


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Silver Tip

Tobago

Great White

Riser Base Subsea Separator/Boosting System (SBS)

DVA or “Local”

Perdido Spar Development

Challenges:• Ultradeep water ~ 7816 ft (2382m)• Remote location• Extreme weather• Low pressure, low temp. reservoirs,

requiring artificial lift + many wells

Solution:• “Low Cost” – Light weight Spar, Low Motion

• Single Lift Topsides• Small Well Bay – 6 slot

• Wet Tree Direct Vertical Access & Surface BOPs• Full platform access to 19 wells from a single

surface slot• Subsea Separation & Boosting System

• Enables development• Enhances Recovery• Overcomes flow assurance problems


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Subsea Boosting System

0’

8,000’

-350’

0’

8,000’

-350’

• Annular Cyclonic Degasser technique embodied within Inlet Assembly

• Multiphase flow is pre-conditioned through inlet piping prior to cyclonic separation

• Package design similar to subsea tree utilizing forged bodies and hydraulic connectors and valves

Gas

Liquid

Annular Cyclonic

Degasser Area

From Manifold

TTR Connector

Flow Base48/42/36 Conductors &

Caisson

Gas

Liquid

Annular Cyclonic

Degasser Area

From Manifold

TTR Connector


Caisson

Gas

Liquid

Annular Cyclonic

Degasser Area

From Manifold

TTR Connector


Caisson

Electrical Submersible

Pump

Top Tensioned

Riser

Flow Control

Assembly


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Significance of the Perdido Development Project for Shell

• First spar development

• Doubles our water depth capability for a platform drilling system

• Expands number of platform wells

• Enables development of difficult reservoirs

• Development of new Gulf of Mexico reservoir play


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Ursa Princess Waterflood

Scope

• Drill/ Complete 4 new Subsea Injector wells

• Install Topsides facilities to lift, clean, condition and deliver water to injectors (130 kbpd avg.)

• Build Subsea facilities to deliver water (flowlines/ umbilicals/ trees)

• 8 DVA Wells tbg. change-outs/ recompletions, and set-up for gas lift

Shell’s Largest Brownfield Project in the GoM

Ursa Princess

Water Flood


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2000

3000

4000

5000

6000

7000

8000

9000

10000

11000

12000

Jan-98 Jan-99 Jan-00 Dec-00 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06

Original Pressure

Depletion Abandonment Presure

Saturation Pressure

Jan04 Princess 1st prod

May06 A4st press.

Ursa Princess Yellow Pressures

Color of pressure point(s) = Color of Area boundary


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Main Technical Challenges

Subsurface

• Sparse well locations (large area, low coverage)

• Sub-salt imaging (Well Placement)

• Basin-wide communication

• Drilling through depleted sands

Surface

• New technologies (SRU + Minox)

• Non-sour tolerant materials

• High pressure / high rate pumps

• TLP load limit

Ursa Princess

Water Flood


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Adding >3000 tons


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