Shell Sets World Record for Deepest Subsea Oil and Gas Well

HOUSTON, Nov. 17, 2011 /PRNewswire/ -- Shell Oil Company is now producing oil from the world's deepest subsea well at its Perdido Development, utilizing advanced technology to lead the way in increasing the company's ability to produce more domestic oil and gas resources. The well, at 9,627 feet below the water's surface, is located in the Tobago Field 200 miles southwest of Houston in the ultra-deep water of the Gulf of Mexico. Tobago is jointly owned by Shell (32.5%, as operator), Chevron (57.5%), and Nexen (10.0%) and is one of three fields producing through the Perdido drilling and production platform.

(Photo: http://photos.prnewswire.com/prnh/20111117/DA08232)

Tobago breaks the world water depth record for subsea production, previously held by another field in the Perdido Development, the Silvertip field at 9,356 feet of water.

"Energy is fundamental to global economic growth. Providing this energy must be met practically, safely and in an environmentally responsible manner," said Marvin Odum, Upstream Americas Director. "Through our highly skilled workforce and cadre of global geoscientists, Shell has applied its advanced seismic and drilling technologies at Perdido to produce additional sources of oil and gas."

Moored in about 8,000 feet of water, the Perdido platform is jointly owned by Shell (33.34%), BP (33.33%) and Chevron (33.33%) and is the deepest drilling and production facility in the world with a capacity to handle 100,000 barrels of oil per day and 200 million standard cubic feet of gas per day. From Perdido, Shell accesses the Great White, Tobago, and Silvertip oil and gas fields through subsea wells directly below the facility and from wells up to seven miles away. At its peak, Perdido can produce enough energy to meet the needs of more than two million US households. Shell operates Perdido and its satellite fields on behalf of partners Chevron, Nexen, and BP.

This world-class project began with the 1996 lease sale when the technology to develop hydrocarbons at Perdido's water depth did not yet exist. By the time the final investment decision for commercial development was made in October 2006, Shell had pioneered several technological firsts which allowed the company to proceed with ultra deepwater oil and gas production. Development drilling began in July 2007, five years after the discovery of hydrocarbons. Perdido produced its first oil and gas on March 31, 2010.

Perdido Technical Facts and Firsts

• Deepest water depth record for an offshore oil drilling and production platform.
• First water injection in 8,000 feet of water in the Gulf of Mexico (Great White GB001) helps push oil through the reservoir, from the injector wells to the production wells.
• First commercial production from the Lower Tertiary geological formation, which many see as the next big opportunity in deep water.
• Deployment of an innovative subsea separation and boosting system that compensates for the low-pressure reservoir and about 2,000 psi of backpressure from the wells. The system includes five specially designed 1,500-horsepower electric pumps embedded in the seafloor to boost production to the surface.
• First spar with direct vertical access wells and production hardware on the seafloor at a depth of more than 8,000 feet.
• Perdido weighs 50,000-tons and sits in water six times deeper than the height of the Empire State Building.
• The entire Perdido project has achieved 13 million man-hours without a lost-time injury, testifying to the effectiveness of the safety regimes put in place by the construction and operating teams.

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Cautionary Note

The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this press release "Shell," "Shell group" and "Royal Dutch Shell" are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words "we," "us" and "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 by identifying the particular company or companies. ''Subsidiaries,'' "Shell subsidiaries" and "Shell companies" as used in this press release refer to companies in which Royal 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 companies in which Shell has significant influence but not control are referred to as "associated companies" or "associates" and companies in which Shell has joint control are referred to as "jointly controlled entities". In this press release, associates and jointly controlled entities are also referred to as "equity-accounted investments". The term "Shell interest" is used for convenience to indicate the direct and/or indirect (for example, through our 34% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.

This press release may contain forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management's expectations, beliefs, estimates, forecasts, projections and assumptions. 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. There are 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 the forward-looking statements that may be included in this press release, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for the Group's products; (c) currency fluctuations; (d) drilling and production results; (e) reserve estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including potential litigation and regulatory effects arising from recategorisation of reserves; (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 of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this press release are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional factors that may affect future results are contained in Royal Dutch Shell's 20-F for the year ended December 31, 2010 (available at www.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 this press release, November 17, 2011. Neither Royal Dutch Shell nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement 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 inferred from the forward-looking statements contained in this press release.

The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions.  We use certain terms in this press release that SEC's guidelines strictly prohibit us from including 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 website www.sec.gov. You can also obtain these forms from the SEC by calling 1-800-SEC-0330.

SOURCE Shell Oil Company

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