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
Flow Base48/42/36 Conductors &
Caisson
Gas
Liquid
Annular Cyclonic
Degasser Area
From Manifold
TTR Connector
Flow Base48/42/36 Conductors &
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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