Africa

Egypt

We have a 50% interest in the Badr Petroleum Company (BAPETCO), a self-operated joint venture between Shell and the Egyptian General Petroleum Corporation (EGPC). BAPETCO onshore operations are in the Western Desert where we have an interest in nine oil and gas producing development leases, as well as four exploration concessions (North East Obaiyed, North Matrouh, North East Alam El Shawish and North Umbaraka).

We have interests in two gas-producing areas offshore the Nile Delta. We have a 40% interest in the Rashid Petroleum Company, a self-operated joint venture between Shell, EGPC and Edison, which operates the Rosetta concession (Shell interest 80%).

We also have a 25% interest in the Burullus Gas Company (Burullus), a self-operated joint venture between Shell, EGPC and PETRONAS. Burullus operates the West Delta Deep Marine concession (Shell interest 50%), which supplies gas to both the domestic market and an Egyptian LNG plant (see “Integrated Gas”).

We also have a 60% interest in the development rights over the Harmattan Deep discovery and in the Notus discovery offshore the Nile Delta.

Gabon

In October 2017, we sold our interests in eight onshore mining concessions and related infrastructure. We continue to hold 75% interests in Shell-operated Gabon deep-water exploration licences.

Nigeria

Our share of production, onshore and offshore, in Nigeria was 266 thousand boe/d in 2017, compared with 258 thousand boe/d in 2016. Security issues, sabotage and crude oil theft in the Niger Delta continued to be significant challenges in 2017.

Onshore

The Shell Petroleum Development Company of Nigeria Limited (SPDC) is the operator of a joint arrangement (Shell interest 30%) that has 17 Niger Delta onshore oil mining leases (OML), which expire in 2019; the renewal application process has started. Of the Nigeria onshore proved reserves, 89 million boe are expected to be produced before the expiry of the current licences, and 450 million boe beyond. To provide funding, modified carry agreements and alternative funding arrangements are in place for certain key projects and are being successfully implemented.

In 2017, we announced first production at Phase 2 of the Gbaran-Ubie integrated oil and gas development (Shell interest 30%) in the Niger Delta region. Expected peak production is around 175 thousand boe/d.

SPDC supplies gas to Nigeria LNG Ltd (see “Integrated Gas”) mainly through its Gbaran-Ubie and Soku projects.

Offshore

Our main offshore deep-water activities are carried out by Shell Nigeria Exploration and Production Company Limited (SNEPCO, Shell interest 100%), which has interests in four deep-water blocks, under PSC terms, in which production is via two FPSOs – Bonga and Erha. SNEPCO operates OMLs 118 (including the Bonga field FPSO, Shell interest 55%) and 135 (Bolia and Doro, Shell interest 55%) and has a 43.75% non-operating interest in OML 133 (including the Erha FPSO) and a 50% non-operating interest in oil prospecting licence (OPL) 245 (Zabazaba, Etan).

Authorities in various countries are investigating our investment in Nigerian oil block OPL 245 and the 2011 settlement of litigation pertaining to that block. See RDS Form 20-F for the year ended December 31, 2017.

SNEPCO also has an approximate 43% interest in the Bonga South West/Aparo development via its 55% interest in OML 118. Following the decision to delay the Bonga South West/Aparo project, a reframing exercise is under way to make this project economically viable in the current business environment. FID is not expected before 2019.

SPDC also has three shallow-water licences (OMLs 74, 77, and 79) and a 40% interest in the non-Shell-operated Sunlink joint venture that has one shallow-water licence (OML 144); all four OMLs expire in 2034.

In our Nigerian operations, we face various risks and adverse conditions which could have a material adverse effect on our operational performance, earnings, cash flows and financial condition. There are limitations to the extent to which we can mitigate these risks. We carry out regular portfolio assessments to remain a competitive player in Nigeria for the long term. We support the Nigerian government’s efforts to improve the efficiency, functionality and domestic benefits of Nigeria’s oil and gas industry, and we monitor legislative developments. We monitor the security situation and liaise with host communities, governmental and non-governmental organisations to help promote peace and safe operations. We continue to provide transparency of spills management and reporting, along with our deployment of oil-spill response capability and technology. We execute a maintenance strategy to support sustainable equipment reliability, and have implemented a multi-year programme to reduce routine flaring of associated gas. See RDS Form 20-F for the year ended December 31, 2017.

Rest of Africa

We also have interests in Algeria, Kenya, Namibia, South Africa, Tanzania and Tunisia.