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Key projects update


(Shell interest 100%; Shell operated)
The Cardamom reservoir lies below the Auger field 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. 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 are currently being drilled. The start-up is expected within the next two years.


(Shell interest 17%)
Kashagan is located offshore, about 80 kilometres from Atyrau and extends over an area of approximately 75 kilometres by 45 kilometres. This is a deep, high-pressure reservoir in a region that experiences wide temperature variations from -40 to +40 degrees Celsius. Due to its size and technical complexity, the Kashagan field is being developed in phases. With its current configuration, Phase I is built to produce 300 thousand boe/d at peak production and is expected to start up later this year. The operator is North Caspian Operating Company (NCOC) and Shell has taken on significant elements of the project execution and production operations to help bring the project to a timely delivery.


(Shell interest 45%; Shell operated)
In 2009, Shell and Petronas Carigali were awarded a contract for technical assistance in developing the Majnoon field, which is located in Southern Iraq and is one of the largest oil fields in the world. Petronas holds a 30% interest and the Iraqi state has a 25% participating interest in the licence. The project is making good progress toward achieving the first commercial production target of 175 thousand b/d.


(Shell interest 35%; Shell operated)
In early 2013, Shell and partners announced the final investment decision to develop the deep-water Malikai oil field, located some 100 kilometres offshore Sabah, Malaysia. The field, located in waters up to 500 metres deep, is part of the Block G production sharing contract awarded by Petronas in 1995, and is expected to produce 60 thousand boe/d at peak production. Operated by Shell, it is the country’s third deep-water project. The Malikai development will require 17 wells drilled from a 23,500 tonne tension leg platform production facility, the first to be fabricated and installed in Malaysia. The contracts for the engineering, procurement and construction of this platform have been awarded.


(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 about 900 metres (some 3,000 feet) deep in the Gulf of Mexico. The Mars B project includes the construction of a new tension-leg platform. 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.


(Shell interests various; Shell operated)
Shell has an industry-leading portfolio of dry gas and liquids-rich shale (LRS) resources in the USA and Canada. Drilling focus has shifted away from dry gas plays to LRS, and about 75% of our 2013 capital expenditure in North American resources plays is expected to be in liquids-rich shale areas. Shell owns about 30,000 square kilometres of acreage in North America (an increase of 10,000 square kilometres in the last year), of which about 60% is LRS. The main regions of operation in the USA are Eagle Ford (Texas) and Permian (Delaware basin) where Shell is currently producing around 50 thousand boe/d. This production will also create new integrated gas options in the future.


(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. 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 kilometres offshore Western Australia, the Prelude FLNG facility will be the largest offshore facility in the world, measuring 488 metres by 74 metres. Total production capacity will be 3.6 mtpa of LNG, 1.3 mtpa of condensate and 0.4 mtpa of LPG. Shell has moved forward rapidly to bring this project to reality and in October 2012, the first steel was cut for the hull. First production of LNG is expected some 10 years after the Prelude gas field has been discovered.


(Shell interest 55%)
The Schiehallion field is located in blocks 204 and 205, approximately 175 kilometres west of the Shetland Islands, off the Scottish coast. The Schiehallion Redevelopment Project will replace an existing floating production, storage and offloading unit (FPSO) with a newly built one. In so doing, the project will extend the expected life of the field. 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. In 2012, we announced the signing of agreements with Murphy Oil Company and Hess Corporation to increase our stake to 55%. The additional equity offers Shell access to substantial additional reserves and redevelopment potential in the UK.