Shell Signs New Upstream Deals With CNOOC and CNPC

THE HAGUE, The Netherlands, July 25, 2012 /PRNewswire/ --

Shell (NYSE: RDS.A) (NYSE: RDS.B) announces today that it has signed two offshore oil and gas Production Sharing Contracts (PSCs) with CNOOC, and a PSC amendment with CNPC for a new development phase for the Changbei gas field in China. Shell has also entered an agreement with CNOOC for its participation in two Shell exploration blocks offshore Gabon, West Africa.

The two offshore oil and gas PSCs with CNOOC are for blocks 62/02 and 62/17 in the Yinggehai Basin.  Shell, as operator, will apply advanced seismic acquisition and processing technologies to conduct 3D seismic data surveys in the Yinggehai blocks. Shell will cover the costs for   the acquisition of seismic data and will use advanced drilling technologies to drill exploration wells during the exploration phase. Shell will hold a 100% working interest during the exploration phase, that will be reduced to 49% in any eventual development phase, with CNOOC as majority partner.

The onshore tight gas PSC amendment with CNPC represents a new phase for the development of the existing Changbei block with 1,692.5 square kilometers in the Ordos Basin, and adds scope to develop additional tight gas sands and further develop the already producing main reservoir.  Subject to government approval and pending the outcome of the appraisal campaign, this additional development project could increase the current production plateau of 320mmscf/d.  Shell will continue to be the operator at Changbei.

In Gabon, CNOOC will acquire a 25% participating interest in offshore exploration blocks BC9 and BCD10.  CNOOC will reimburse Shell for 25% of certain past exploration costs and carry part of the future exploration costs. Shell will remain operator with 75% interest. The agreement is subject to government approval.

Lim Haw-Kuang, Executive Chairman of Shell Companies in China, said: "We are delighted about the return to offshore exploration in China and the opportunity to work with CNOOC again on a major project in the country.  We are equally delighted to continue and expand the Changbei success story in partnership with CNPC.  Moreover, we are very pleased to have entered the farm-out agreement with CNOOC in Gabon.  These new projects in partnership with Chinese companies are the latest showcase of our China strategy to work with our Chinese counterparts both in China and globally to help meet the country's energy needs to fuel its fast growing economy."

Note for editors:

Royal Dutch Shell plc is incorporated in England and Wales, has its headquarters in The Hague and is listed on the London, Amsterdam, and New York stock exchanges.  Shell companies have operations in more than 90 countries and territories with businesses including oil and gas exploration and production; production and marketing of liquefied natural gas and gas to liquids; manufacturing, marketing and shipping of oil products and chemicals and renewable energy projects. For further information, visit http://www.shell.com.

In China, Shell operates the onshore Changbei tight-gas field under a PSC with PetroChina.  The two parties have also agreed to appraise, develop and produce tight gas in the Jinqiu block in the central Sichuan province under a 30-year PSC (Shell interest 49%), which expires in 2040. The Jinqiu project achieved first gas production in September 2011.  Also in Sichuan, Shell and PetroChina are assessing shale gas opportunities in the Fushun-Yongchuan block. The two parties are also assessing opportunities in coalbed methane in the Ordos Basin, where Shell has an agreement to evaluate resources in North Shilou. Shell is also a partner in the Hangzhou city ring joint venture that develops, operates and manages a high-pressure natural gas pipeline system.

Our Downstream business in China has 15 joint ventures and 9 wholly-owned companies. The various Shell ventures cover about 700 Retail fuel stations, 7 Lubricant blending plants, 10 Bitumen plants, and the Nanhai Petrochemicals complex.

Cautionary note
The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this 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 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 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 23% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.  

This release contains 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 included in this release, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell's products; (c) currency fluctuations; (d) drilling and production results; (e) reserves 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 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 of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this 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 31 December, 2011 (available at http://www.shell.com/investor and http://www.sec.gov ). These factors also should be considered by the reader.  Each forward-looking statement speaks only as of the date of this release, 25 July 2012. 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 release. There can be no assurance that dividend payments will match or exceed those set out in this release in the future, or that they will be made at all. 

We use certain terms in this release, such as resources, that the United States Securities and Exchange Commission (SEC) 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 http://www.sec.gov. You can also obtain these forms from the SEC by calling 1-800-SEC-0330

Enquiries
Shell Media Relations
International, UK, European Press: +44-207-934-5550

Shell Investor Relations
Europe - Tjerk Huysinga: +31-70-377-3996
United States - Ken Lawrence: +1-713-241-2069

SOURCE Royal Dutch Shell plc

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

440k+
Newsrooms &
Influencers

9k+
Digital Media
Outlets

270k+
Journalists
Opted In

GET STARTED