SPDC Flares Reduction Programme

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Copyright of Royal Dutch Shell plc 10 October, 2012 1 SPDC FLARES REDUCTION PORT HARCOURT OCTOBER 10, 2012 ROYAL DUTCH SHELL PLC

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Muhammad Shittu (GM Flared Gas) presented at a field visit Shell organised for Socially Responsible Investors in Port Harcourt, Nigeria on October 10, 2012.

Transcript of SPDC Flares Reduction Programme

  • 1.ROYAL DUTCH SHELL PLCSPDC FLARES REDUCTIONPORT HARCOURTOCTOBER 10, 2012Copyright of Royal Dutch Shell plc 10 October, 2012 1

2. SPDC FLARES REDUCTION PROGRAMMEMUHAMMAD SHITTUGM FLARED GASCopyright of Royal Dutch Shell plc 10 October, 2012 2 3. CAUTIONARY NOTEThe companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this presentation Shell, Shell group and RoyalDutch Shell are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words we, usand our are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served byidentifying the particular company or companies. Subsidiaries, Shell subsidiaries and Shell companies as used in this presentation refer to companies in whichRoyal Dutch Shell either directly or indirectly has control, by having either a majority of the voting rights or the right to exercise a controlling influence. The companiesin which Shell has significant influence but not control are referred to as associated companies or associates and companies in which Shell has joint control arereferred to as jointly controlled entities. In this presentation, associates and jointly controlled entities are also referred to as equity-accounted investments. The termShell interest is used for convenience to indicate the direct and/or indirect (for example, through our 23% shareholding in Woodside Petroleum Ltd.) ownershipinterest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements otherthan statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that arebased on managements current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance orevents to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning thepotential exposure of Royal Dutch Shell to market risks and statements expressing managements expectations, beliefs, estimates, forecasts, projections andassumptions. These forward-looking statements are identified by their use of terms and phrases such as anticipate, believe, could, estimate, expect,intend, may, plan, objectives, outlook, probably, project, will, seek, target, risks, goals, should and similar terms and phrases. Thereare a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in theforward-looking statements included in this presentation, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand forShells products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmentaland physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of suchtransactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developmentsincluding potential litigation and regulatory measures as a result of climate changes; (k) economic and financial market conditions in various countries and regions; (l)political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval ofprojects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this presentation areexpressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-lookingstatements. Additional factors that may affect future results are contained in Royal Dutch Shells 20-F for the year ended 31 December, 2011 (available atwww.shell.com/investor and www.sec.gov ). These factors also should be considered by the reader. Each forward-looking statement speaks only as of the date of thispresentation, 10 October 2012. Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-lookingstatement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferredfrom the forward-looking statements contained in this presentation. There can be no assurance that dividend payments will match or exceed those set out in thispresentation in the future, or that they will be made at all.We use certain terms in this presentation, such as resources, that the United States Securities and Exchange Commission (SEC) guidelines strictly prohibit us fromincluding in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC websitewww.sec.gov. You can also obtain these forms from the SEC by calling 1-800-SEC-0330.Copyright of Royal Dutch Shell plc 10 October, 20123 4. NIGERIA NATURAL GAS PRODUCTION ANDUTILISATIONEXPORT LNG3.2 bcf/d41% (Shell operated 56%: 1.8bcf/d)RE-INJECTION & OTHEROPERATIONAL USAGE32%2.5 bcf/d(Shell operated 4%: 0.1bcf/d)GAS FLARING1.2 bcf/d15%GAS WELLS (Shell operated 18%: 0.2bcf/d)PRODUCTION7.8 bcf/d(Shell operated 35%:DOMESTIC CONSUMPTION2.8 bcf/d)12% 0.9 bcf/d (power & industries)(Shell operated 67%: 0.6bcf/d)Copyright of Royal Dutch Shell plc 10 October, 20124 5. IMPROVEMENTS IN FLARING PERFORMANCESPDC JV FLARE VOLUMES & INTENSITYFLARING PERFORMANCEMMscf per day Mscf/bbl MMscf per day9001.20300 1.006000.80200 0.603000.40100 0.20 0 0.000 2010 2011 2012ACTUAL ACTUAL YTD Historical associated gas flared (MMscf/d) Active associated gas gatheringNon associated gas Flaring intensityInactive associated gas gatheringEA (Sea eagle)No associated gas gathering facilitiesCopyright of Royal Dutch Shell plc 10 October, 20125 6. SOUTHERN SWAMP ASSOCIATED GAS (AG)/DOMESTIC GASPROJECT SCOPE/DEVELOPMENT PLAN AG compression systems in 4 flow stations (75MMscf/d) Gas gathering pipelines Gas processing plant at Tunu 70 MMscf/d central compression system 160 MMscf/d dew pointing and export system Offshore pipeline to riser platform A Drilling and completion of 2 NAG wellsProposed gas plant at Tunu Drilling and completion of 18 Oil wellsToForcadosTerminalBENISEDE60MbpdPRODUCTION20MMScf /d70 kbbl/d of oil to Forcados via Trans Ramos OGBOTOBO12 x 16 km 45 Mbpd 10MMScf /dpipeline8 x 16 kmE BRASS CREEKMANIFOLD 100 mmscf/d to domestic gas market12 x 24 km OPUKUSHI Dodo N. 90 MbpTUNU10 x 10 km 30MMScf /d 80MMscfd AGCPF FID 2012120 MMScf/d NAG SlugCatcher160 MMScf/d HCDP 16x 32 km 15MMScf /dWith provision of bays for futureexpansion) EA RISER PLATFORM ONSTREAM 2014/2015EXISTING OIL PIPELINESNEW GAS GATHERING LINE EXPORT PIPELINE TO OGGSDISUSED LINESCopyright of Royal Dutch Shell plc 10 October, 20126 7. FORCADOS YOKRI INTEGRATED PROJECTLOCATION KANTUORIGINAL SCOPEC/ S74,75,78,87 YOKRI M ANI FOLD ADD. ACQ SI I O UI T N LI VI NG ACCO M AREM. A CO PRE STN M ALT. SI TE3CO PRE. SNM TNORTH BANKALT. SI TE2 HELI PAD4 new flow stations with gas gathering KF/ S76,85 79JCO PRESSO SNMRTBUFFER ZONE77,108115,116FS, FLB &Asisagbene IHF/ L TRACE51AE Yokri EgbeCCP/CPFGCentral processing facility (CPF)113 FORC-51,72,73,90 F FORC-103,104,105,106,107 SokoboloD CF/ S52A8" FORC. N.25 wells BANK D/ LFORC-95,97,98,101 BFORC-53 FORC-21 AGROUNDBEDFORC-52,64,65,68 Guogbene Bi gh t o f Beni n FORC-67 FORC-18,20,43,44 45,46,47Obotobo FORC-9,54,55,566 new platforms in estuary FORC-31,48.49,50FORC-69,70,71,82,83 5AFORC-10 JA / JB FORC-93,94FORC-5,22,23,24FORC-42,60,61,62FORC-120FORC-30,57,58,5963FORC-12 FORC-121,122,123,124FORC-3,25,26,663AFORC-4,32,33,34 FORC-2,27,28,29128 FORC-11,39,40,41,91,92FO R CADO S R I V ERFORC-1,37,38,89ADDITIONAL SCOPE NEW ESTUARY13,14,17,1980 FLOW STATION LO TERM - SO PRO CTI N M SURS NGH RE T O E E E A SCHO L O15Switch from LNG to domestic gas marketHOgulahaF/ S CAM P SI TE SHORELI NE 138- 6 - 7APRON JUNI O STAFFCLU R BSOUTH342FORCADOS JETTY6BANK 78GROUNDED SI TE1 non-associated gas wellsAGI P FACI LI I ET SCABLE RUN SI E T 1 I N- LI NE DEYDRATO SI E HI NT TERMINAL 5GROUNDED SI TEUNI - 1T RE - LOCATI ON 9 10 FORCADOS TERMI NAL AREA Renew estuary platforms & subsea bulk linesPRODUCTION 90 kbbl/d to Forcados terminal 60 mmscf/d to domestic gas FID 2012 ONSTREAM 2014/2015 Partially Completed North Bank CCP/CPFCopyright of Royal Dutch Shell plc 10 October, 2012 7 8. FLARING SUMMARYSUBSTANTIAL PROGRESS MADE SPDC JV committed to reduce continuous flaring inNigeria, and complies with Nigerian laws andregulations on flaring Flaring and flare intensity dropped by ~60% since2002 SPDC JV spent >$3bln to gather ~60% of itsassociated gas (AG) production since 2000 Closing in high gas to oil ratio wells Further ~$4bln on oil & gas projects, gathering afurther 35% by 2014/2015, taking SPDC JVflaring intensity below current global average Sustained funding, security and investment in gasinfrastructure and deregulated gas pricing arerequired in order to significantly grow domesticgas industryPartially Completed North Bank CCP/CPFCopyright of Royal Dutch Shell plc 10 October, 20128 9. SPDC FLARES REDUCTIONQUESTIONS & ANSWERSCopyright of Royal Dutch Shell plc 10 October, 2012 9