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Producing oil and natural gas

Conventional oil and gas

The most ambitious scenarios show that as the energy system transitions, the world will continue to need oil and gas for decades.

From exploration to refining and distribution, traditional fuels continue to play a key role in the energy system. In 2022, our crude oil and natural gas liquids production available for sale was 13% lower than in the previous year. This larger than usual decline was mainly driven by portfolio changes, including the sale of our Permian business in the USA in late 2021 and derecognition of Sakhalin-related volumes in Russia.

As we transform our business, we will continue to deliver the energy the world needs today and in the decades ahead. At the same time, we are accelerating the transition to low- and zero-carbon energy, which is at the heart of our strategy.

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Liquefied natural gas

As one of the world’s largest suppliers of liquefied natural gas (LNG), we can ship natural gas to where it is needed. For instance, in 2022 we delivered a record 194 cargoes of LNG to Europe – almost five times our usual average – to help replace Russian gas and maintain supply for people and businesses. LNG also plays an important role in enabling countries to replace coal-fired power generation with a less carbon-intensive alternative.

In 2022, our Colibri project (Shell interest 87%) in Trinidad and Tobago started production. Colibri delivers natural gas domestically and internationally through Atlantic LNG, one of the world’s largest LNG plants (Shell’s interest ranges from 46% to 57.5% in each of the four trains at the facility). We are also part of the North Field East and North Field South expansion projects in Qatar, the largest LNG project ever, which will supply markets worldwide and include carbon capture and storage to reduce emissions. And, we made final investment decisions to develop offshore gas projects in the UK North Sea and, with our partners, in Australia and Malaysia. First gas is expected from these projects in the mid-2020s.

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Shale oil and gas

Following the divestment of our Permian business in the USA in 2021, we have limited involvement in shale oil and gas production.

We work to unlock our remaining shale resources safely and responsibly through strict adherence to our Onshore Operating Principles for safety, air, water, footprint and community. We conduct our operations in a manner that aims to protect air quality and reduce emissions. For example, we are implementing greenhouse gas abatement projects for our facilities, such as using renewable power supply and energy efficiency improvement initiatives.

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We do not plan to pursue new oil exploration leases offshore in the Arctic Circle.

Shell ended offshore exploration drilling operations in Alaska in 2015. We hold one licence interest in the North Slope area of Alaska. In 2020, we received regulatory approval to combine our near-shore leases in West Harrison Bay into a single unit and we are currently seeking a co-owner to operate the unit. The Nikaitchuq North prospect, in which Shell held a 50% interest, was relinquished by both Shell and ENI in 2022.

In Norway, Shell is a 10% partner in Irpa, an offshore natural gas discovery located in an area of existing gas production within the Arctic Circle. Irpa is planned as a tie-in to the existing Aasta Hansteen platform (operated by Equinor), which already supplies natural gas to the Nyhamna processing plant, where Shell is responsible for providing significant exports of gas to Europe.

We also hold several licences from our previous activities in the Canadian Arctic, although we do not plan to develop these licences. Shell exited its 50% interest in the Gydan energy venture in Russia in 2022. At the time of exit, Gydan had no production and had yet to make a commercial discovery.

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liquefied natural gas
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