Upstream overview

Key milestones

Portfolio and business development

• In Argentina, we won two exploration blocks in the deep-water bid round (Shell interest 60%);
• Also in Argentina, we agreed a 50:50 partnering with Equinor to jointly acquire Schlumberger’s 49% interest in the Bandurria Sur block located in the Vaca Muerta basin (Shell interest 24.5%);
• In Brazil, we announced the FID to contract the Mero 2 FPSO vessel to be deployed at the Mero field offshore Santos Basin in Brazil;
• In Brunei, we acquired the deep-water exploration Block CA-1 (Shell interest 86.95%). The deal is expected to complete in 2020;
• In Egypt, we announced the intention to sell our onshore upstream assets in the country;
• Also in Egypt, we were awarded onshore concessions with 100% Shell interest (West El Fayum, South East Horus, South Abu Sennan) and one producing concession extension (Bed 2-17);
• Also in Egypt, we were awarded two concessions in the Red Sea bid round: Block 4 (Shell interest 70%) and Block 3 as the sole operator. This is awaiting ratification;
• In Kazakhstan, we decided not to progress the Kalamkas-Khazar projects. These projects were not deemed competitive compared with other opportunities in our global portfolio;
• In Malaysia, we took FID on the second phase of the Malikai deep-water development (Shell interest 35%);
• In Nigeria, we announced the release of Invitation to Tender (ITT) to contractors for the development of the Bonga South West Aparo (BSWA) oil field;
• In Oman, our partnership with Oman Oil Company Exploration & Production to explore for oil and gas in Block 42 was ratified (Shell interest 50%);
• Also in Oman, we signed an Exploration & Production Sharing Agreement for Block 55 in the south-east of the Sultanate (Shell interest 100%). This agreement is awaiting ratification via Royal Decree;
• In São Tomé and Príncipe, in the Gulf of Guinea, we acquired interests in Block 6 (Shell interest 20%) and Block 11 (Shell interest 30%) exploration licences;
• In South Africa, we entered the frontier deep-water Cape Basin (Shell interest 40%) and a second block adjacent to our existing acreage in the Namibian Orange Basin (Shell interest 45%);
• In the UK, we announced FID to export gas and oil from the Pierce field, which is located 165 miles east of Aberdeen (Shell interest 92.5%);
• In the US Gulf of Mexico, we announced FID to develop the PowerNap field (Shell interest 100%);
• Also in the US Gulf of Mexico, we acquired 77 blocks across multiple plays in the Gulf of Mexico Lease Sale 252; and
• In the USA, we made a significant discovery at the Blacktip prospect in the deep-water US Gulf of Mexico (Shell interest 52.4%). Blacktip is our second significant discovery in the Perdido Corridor and is part of a continuing exploration strategy to add competitive deep-water options to extend our heartlands.

In the Netherlands, the Dutch government decided to halt Groningen production by 2022, eight years earlier than initially planned.

Operational milestones

• In deep water off Brazil, we announced first production from two of our FPSOs: P-67, in Lula North (Shell interest 23%, post-unitisation); and P-68, in Berbigão (Shell interest 25%, subject to unitisation);
• In Italy, the Tempa Rossa oil field started up in December 2019 (Shell interest 25%);
• In Malaysia, we completed phase 2 of the Gumusut-Kakap deep-water project, drilling four additional subsea wells (Shell interest 29%);
• In Malaysia offshore Sarawak, we produced first oil and gas from the E6 field in the SK308 PSC (Shell interest 50%). We also produced first gas from the Larak field in the SK408 PSC (Shell interest 30%);
• In the US Gulf of Mexico, we announced first production from Appomattox (Shell interest 79%). It is the first commercial discovery brought into production in the deep-water Norphlet formation in the US Gulf of Mexico.

Divestments

• In Canada, we sold our Foothills sour gas plants and the gas fields which feed them;
• In Denmark, we completed the sale of our 36.8% non-operating interest in our joint venture the Danish Underground Consortium, for $1.9 billion;
• In Norway, we sold 10% of our 12% interest in Nyhamna gas plant;
• In the US Gulf of Mexico, we sold our 22.45% non-operating interest in the Caesar Tonga asset;
• Also in the USA, we sold our non-Shell-operated interest in the Haynesville shale gas formation in Northern Louisiana; and
• Also in the USA, we sold our Norphlet deep-water gathering pipeline system in the US Gulf of Mexico.

Upstream earnings and cash flow [A]

$ billion

[A] Excluding identified items.

Upstream production

mboe/d