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Key projects update


(Shell interest 60%; Shell operated)
The Athabasca Oil Sands Project (AOSP) extracts bitumen from the Muskeg River and Jackpine mines in the province of Alberta, Canada, and synthesises from it a crude oil at the Scotford Upgrader near Edmonton. The successful start-up of an expansion project in 2011 has increased the AOSP’s mining and upgrading capacity to 255 thousand boe/d. The focus will now be to improve operating efficiencies and reliability further, thereby adding more processing capacity with low capital investment and low business risk. This “debottlenecking” opportunity, which will be developed over the next 10 years, is expected to increase production by as much as 85 thousand boe/d while reducing unit costs. In 2011, we took the final investment decision on the first 10 thousand boe/d capacity-increasing increment.


(Shell interest 55%; Shell operated)
The Bonga North West project is Shell’s first brownfield subsea tieback in Nigerian deep water. The project connects newly discovered oil and gas fields to the existing Bonga floating production, storage and offloading unit. All engineering contracts have been awarded and the project is in the execution phase. Production is expected to come on-stream in 2014, reaching a peak of 45 thousand boe/d.


(Shell interest 100%; Shell operated)
The Cardamom Deep field lies below the Auger and Cardamom fields in the deep waters of the Gulf of Mexico. Shell discovered the Cardamom reservoir in 2010 using advanced seismic technology that was able to produce improved images versus traditional seismic methods. Furthermore, the Cardamom appraisal well was with the first deep-water exploration plan to be approved by the Bureau of Ocean Energy Management, Regulation and Enforcement after the BP Deepwater Horizon incident. The field is expected to produce a peak of 50 thousand boe/d through wells connected to the existing Auger platform, some directly and others via a new subsea tie-back system. The wells will be drilled over the next two years, following the final investment decision in 2011.


(Shell interest 28%)
The second phase of the Clair development involves drilling 36 wells and the design, fabrication and installation of two fixed platforms connected by a bridge. Drilling and production facilities will be situated on one platform, and utilities and living quarters will be on the other. The new facilities, located west of the Shetland Islands, are being designed for 40 years of production. The final investment decision was announced in 2011. Installation is scheduled for 2015, with production expected to come on-stream in 2016. Peak production is expected to be 120 thousand boe/d.


(Shell interest 33%; Shell operated)
The Gumusut-Kakap field is the first deep-water opportunity for Shell in Malaysia. Lying in water 1,200 m deep, the field is being developed on the basis of a semi-submersible platform with a production capacity of 150 thousand boe/d of oil from 19 subsea wells. The oil will be exported via a 200 km pipeline to a new terminal at Kimanis, Sabah. The gas associated with the oil production will be re-injected into the reservoir to help improve the oil recovery.


(Shell interest 71.5%; Shell operated)
The Mars B project will help boost production from the Mars field and bring on-stream two other nearby fields – West Boreas and South Deimos. The fields are located in water depth of around 900 m in the Gulf of Mexico. The Mars B project includes the construction of a new tension-leg platform – the second at the Mars field and the sixth of its type for Shell in the Gulf of Mexico. Production from the new platform, called Olympus, is expected to start around 2015; peak production will be 100 thousand boe/d. The Mars field has been one of Shell’s most important fields over the last 15 years. Yet by the end of 2011, the field still contained around 1.1 billion boe. The Mars B project extends the life of the field to at least 2050. We plan to start development drilling at the site of the Olympus TLP with the Noble Bully One drillship in spring 2012, having taken the final investment decision in September 2011.


(Shell interests various; Shell operated)
We have an industry-leading portfolio of tight-gas and liquids-rich shale resources in the USA and Canada. Our main regions of operation in the USA are: Eagle Ford, Texas; Marcellus, Pennsylvania and New York; Haynesville, Louisiana; and Pinedale, Wyoming. In Canada they are: Groundbirch, British Colombia; and Deep Basin and Foothills in Alberta. Production from these assets was about 220 thousand boe/d in 2011 and could reach more than 400 thousand boe/d (2.3 bcf/d) by 2015.


(Shell interest 67.5%; Shell operated)
In 2011 Shell took its first final investment decision to move ahead with building a floating liquefied natural gas (FLNG) facility. Total production capacity will be 3.6 mtpa of LNG, 1.3 mtpa of condensate and 0.4 mtpa of LPG. The floating processing and storage facility will be moored above an offshore gas field, liquefying the gas produced from the field. Ocean-going carriers will offload the liquefied natural gas, as well as other liquid by-products, for delivery to market. Located more than 200 km offshore Western Australia, the Prelude FLNG facility will be the largest offshore facility in the world, measuring 488 m by 74 m and weighing around 600,000 tonnes when fully loaded. Shell has moved forward rapidly to bring this project to reality; first production of LNG is expected some 10 years after the Prelude gas field has been discovered.


(Shell interest 36%)
The Schiehallion Redevelopment Project “Quad 204” will replace an existing floating production, storage and offloading unit (FPSO) with a newly built one. In so doing, the project extends the expected life (2023–2047) of the Schiehallion and Loyal deep-water fields west of the Shetland Islands, enabling continued production from the existing wells. The new FPSO will be capable of exporting as much as 130 thousand boe/d and store in excess of 900 thousand boe. The final investment decision for the project was announced in 2011. The FPSO installation is scheduled in 2015, and production is expected to come on-stream in 2016.