Asia (including the Middle East and Russia)

Brunei

Shell and the Brunei government are 50:50 shareholders in Brunei Shell Petroleum Company Sendirian Berhad (BSP). BSP has long-term oil and gas concession rights onshore and offshore Brunei, and sells most of its gas production to Brunei LNG Sendirian Berhad (see “Integrated Gas”), with the remainder (12% in 2019) sold in the domestic market.

In addition to our interest in BSP, we have a 35% non-operating interest in the Block B concession, where gas and condensate are produced from the Maharaja Lela field.

We also have a non-operating interest in the deep-water exploration Block CA-2 (Shell interest 12.5%), under a PSC.

 A sale and purchase agreement was signed in October 2019 for the acquisition of Total E&P Deep Offshore Borneo B.V. and all of its interests in the deep-water exploration Block CA-1 (Shell interest 86.95%), under a PSC. The deal is expected to complete in 2020.

Over the course of 2019, we have relinquished our interests in the Block A concession (Shell interest 53.9%) following the drilling of the Rapong exploration well. Linked to the relinquishment of Block A, we have also relinquished our interests in the adjacent Block N (Shell interest 50%).

Iraq

We have a 44% interest in the Basrah Gas Company, which gathers, treats and processes associated gas that was previously flared from the Rumaila, West Qurna 1 and Zubair fields. The processed gas and associated products, such as condensate and liquefied petroleum gas (LPG), are sold to the domestic market. Any surplus condensate and LPG is exported. In 2019, Basrah Gas Company processed on average around 850 million scf/d of associated gas into dry gas, condensate and LPG.

Kazakhstan

We are the joint operator of the onshore Karachaganak oil and condensate field (Shell interest 29.3%), where we have a licence to the end of 2037.

We have an interest in the North Caspian Sea Production Sharing Agreement (Shell interest 16.8%) which includes the Kashagan field in the Kazakh sector of the Caspian Sea. The North Caspian Operating Company is the operator. This shallow-water field covers an area of around 3,400 square kilometres. Phase 1 development of the field is expected to lead to plateau oil production capacity of about 63 thousand boe/d by 2020 (Shell share), with the possibility of increases with additional phases of development.

We have a 7.4% interest in Caspian Pipeline Consortium, which owns and operates an oil pipeline running from the Caspian Sea to the Black Sea across parts of Kazakhstan and Russia.

In 2019 we made the decision not to progress the Kalamkas-Khazar projects. These projects were not competitive enough compared with other opportunities in Shell’s global portfolio.

Malaysia

We explore for and produce oil and gas offshore Sabah and Sarawak under 16 PSCs, in which our interests range from 20% to 85%.

Offshore Sabah, we operate two producing oil fields. These include the Gumusut-Kakap deep-water field (Shell interest 29%), and the Malikai deep-water field (Shell interest 35%). In August 2019, the phase 2 development of the Gumusut-Kakap field successfully achieved first oil and is expected to add 50 thousand boe/d of extra capacity (Shell share). In December 2019, we also took FID on phase 2 of the Malikai project. The project involves the drilling of two additional oil-producing wells and four water injection wells to enhance Malikai’s expected recoverable oil volumes. We also have a 21% interest in the Siakap North-Petai deep-water field and a 30% interest in the Kebabangan field, both operated by third parties. Additionally, we have exploration interests in Blocks SB-J, SB-G, SB-N, SB-3G, ND-6 and ND-7 PSCs.

Offshore Sarawak, we are the operator of eight producing gas fields (Shell interest 50%). In June 2019, the Block SK8 PSC expired (Shell equity 37.5%). In 2019, the abandonment of depleted wells for the Serai field (Shell interest 37.5%) and the Saderi field (Shell interest 37.5%) was completed. In December 2019, we signed a binding Heads of Agreement (HoA) for the extension of the MLNG PSC. Under the terms of the HoA, Shell will continue to be the PSC operator for the F6 and F23 hubs and retains the operatorship of the E8, F13 East and F13 West fields. Shell will also be the operator for the new exploration acreage and new fields (F22, F27, Selasih), which will now be part of the MLNG Extension PSC. The key terms in the HoA will be further detailed in the definitive agreements expected to be signed in 2020. Nearly all the gas produced offshore Sarawak is supplied to Malaysia LNG and to our GTL plant in Bintulu. See “Integrated Gas”.

In May 2019, first oil and gas were successfully achieved from the E6 field in the SK308 PSC (Shell interest 50%) where the field is the first carbonate thin oil-rim and gas development in Malaysia. First gas was also successfully achieved from the Larak field in the SK408 PSC (Shell interest 30%) in December 2019.

We also have interests in the Amended 2011 Baram Delta EOR PSC (Shell interest 40%) and in Block SK-307 PSC (Shell interest 50%), and exploration interests in Blocks SK318, SK320, SK408 and SK319.

Oman

We have a 34% interest in Petroleum Development Oman (PDO); the Omani government has a 60% interest. PDO is the operator of more than 200 oil fields, mainly located in central and southern Oman, over an area of 90,874 square kilometres. The concession expires in 2044.

In October, we signed an Exploration & Production Sharing Agreement for Block 55 in the south-east of the Sultanate. Oman Shell now has a 100% working interest in and operatorship of Block 55 with a total area of 7,564 square kilometres. The agreement includes a work programme of regional studies, seismic acquisition and other potential exploration activities. This agreement is awaiting ratification via Royal Decree.

Russia

We have a 50% interest in Salym Petroleum Development N.V., the joint venture with Gazprom Neft, developing the Salym fields in western Siberia, Khanty Mansiysk Autonomous District.

We and Gazprom Neft each have a 50% interest in Khanty-Mansiysk Petroleum Alliance VOF partnership through which Shell is a holder of 50% of shares in JSC Khanty-Mansiysk Petroleum Alliance.

In June 2019, we signed an agreement with Gazprom Neft on the future sales and purchase of the 50% participation interest in LLC Meretoyahaneftegaz. This transaction is expected to be completed in 2020.

With effect from January 1, 2019, Salym and Khanty-Mansiysk Petroleum Alliance VOF partnership are reported in the Upstream segment. Comparative information has not been restated.

As a result of European Union and US sanctions prohibiting certain defined oil and gas activities in Russia, we suspended our support to Salym and Khanty-Mansiysk Petroleum Alliance VOF partnership in relation to shale oil activities since 2014. Also, Salym and Khanty- Mansiysk Petroleum Alliance VOF partnership also suspended all of their shale oil-related activities since 2014 as well.

United Arab Emirates

In Abu Dhabi, we have a 15% interest in the licence of ADNOC Gas Processing, which expires in 2028. ADNOC Gas Processing exports propane, butane and heavier liquid hydrocarbons, which it extracts from the wet gas associated with the oil produced by ADNOC Onshore.

Rest of Asia

We also have interests in Jordan, Kuwait, the Philippines and Turkey.