Australia

We have interests in offshore production and exploration licences in the North West Shelf (NWS) and Greater Gorgon areas of the Carnarvon Basin, as well as in the Browse Basin and Timor Sea. Some of these interests are held directly and others indirectly through a shareholding of approximately 23% in Woodside Petroleum Ltd (Woodside). Woodside is the operator of Pluto LNG.

Woodside is also the operator on behalf of six joint-venture participants of the NWS gas, condensate and oil fields, which produced 512 thousand boe/d in 2011. Shell provides technical support for the NWS development. In December 2011, the NWS joint venture announced the final investment decision on the Greater Western Flank Phase 1 project.

We also have a 50% interest in Arrow Energy Holdings Pty Limited (Arrow), a Queensland-based joint venture with PetroChina. Arrow owns coalbed-methane assets, a domestic power business, and the site for a proposed LNG plant on Curtis Island, near Gladstone. In 2011, Arrow entered into an agreement to acquire all the shares of coalbed-methane company Bow Energy Ltd (Bow) for a Shell share consideration of approximately $0.3 billion. The acquisition of Bow contributes to Arrow’s opportunity to expand the proposed 8 mtpa LNG project on Curtis Island. In December 2011, the transaction received final government and shareholder approval, and it was completed in January 2012.

The Gorgon LNG project (Shell interest 25%) involves the development of the largest gas discoveries to date in Australia, beginning with the offshore Gorgon (Shell interest 25%) and Jansz/Io fields (Shell interest approximately 20%). It includes the construction of a 15 mtpa LNG plant on Barrow Island. Construction activities on Barrow Island continued in 2011.

We are the operator of a permit in the Browse Basin in which two separate gas fields were found – Prelude in 2007 and Concerto in 2009. In 2011, we announced the final investment decision to develop these fields on the basis of our innovative floating liquefied natural gas (FLNG) technology. This technology enables gas to be processed offshore, reducing the development’s costs and minimising its environmental impact. The Prelude FLNG project is expected to produce some 110 thousand boe/d of natural gas and natural gas liquids, delivering some 3.6 mtpa of LNG, 1.3 mtpa of condensate and 0.4 mtpa of liquefied petroleum gas (LPG).

Shell also has rights to the gas of the nearby Crux field (AC/P23) and operates the AC/P41 block (Shell interest 75%), where the Libra-1 gas discovery was made in 2008.

We are also a partner in the Browse joint venture (Shell interest approximately 20%) covering the Torosa, Brecknock and Calliance gas fields. In 2010, as required by the Retention Lease, the joint-venture participants began planning the development of the Browse resources on the basis of an LNG plant at James Price Point on the Dampier Peninsula of Western Australia.

In the Timor Sea Shell holds interests in the large Greater Sunrise and Evans Shoal gas fields (Shell interest approximately 34% and 32.5%, respectively). The joint venture partners have selected FLNG as the preferred development concept for Greater Sunrise. The development is subject to approval from both the Australian and Timor Leste governments.

Shell also holds 6.4% interest in the Wheatstone LNG project which includes construction of two LNG trains with a combined capacity of 8.9 mtpa. The final investment decision for the Wheatstone LNG project was announced in 2011.