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First million barrels of oil from ultra-deep water off Brazil

Production has now hit over one million barrels of oil at the Parque das Conchas fields 120 kilometres off the coast of Brazil, where ultra-deep water and a constant swell makes for tough operating conditions.

A series of technology firsts unlocked major new resources beneath water nearly two kilometres deep. Huge technical challenges had to be overcome to bring the fields to production. Remote-controlled submarines operating in massive pressures on the ice-cold sea floor installed the equipment needed to produce the oil from deep beneath the seabed.

A vast network of wells and pipelines connect reservoirs scattered up to 20 kilometres apart. In a double technical first, oil and gas are separated on the seabed before powerful electric pumps push the oil upwards from the low-pressure reservoirs to a specially converted production vessel on the surface that stores it for shipping to shore.

And kilometres-long umbilical cables stretching out from the vessel channel continuous power and chemicals — vital to prevent frozen solids forming in the oil — to the production machinery far below.

As long-term energy demand soars, accessing hard-to-reach resources such as those at Parque das Conchas will be increasingly vital. To develop the fields economically, the reservoirs of Parque das Conchas were connected through a single production process centred on the converted vessel.

Production from the fields — currently ramping up — is the latest step in Shell’s strategy of delivering an additional 1 million barrels per day of oil and gas production in the coming years.

At the heart of the Parque das Conchas project — formerly known as BC-10 — is a floating production, storage and offloading vessel (FPSO) with the capacity to produce up to 100,000 barrels of oil and 50 million cubic feet of natural gas a day. Shell is the operator with a 50% share with partners Petroleo Brasileiro (Petrobras) holding 35% and India’s ONGC Campos Ltda. 15%.

“Oil and gas will continue to play a major part in meeting the world’s growing energy demands, and bringing Parque das Conchas production on-stream marks an important milestone for oil production in the region,” says Shell Upstream Americas Director Marvin Odum. “This also reinforces Shell’s presence in the country with a project that has created jobs and encouraged investments.”

Pumping up the oil

Remotely operated vehicle (ROV) working some 200 metres below sea level at the Argonauta field.

Remotely operated vehicle (ROV) working some 200 metres below sea level at the Argonauta field.

To combat the low pressure in the reservoirs, Shell installed 1,500-horsepower electric submersible pumps on the seabed. Each pump uses the thrust of a Formula 1 car engine to drive the oil to the surface. The oil travels through specially-developed steel pipes that are flexible enough to move with the ocean’s persistent swell.

Production comes from the Abalone, Ostra and Argonauta B-West fields lying at depths of between 950 to 2,500 metres below the seabed, south-east of the city of Vitória. Some 5,000 men and women worked together to overcome huge technical challenges to make Parque das Conchas a reality. The first phase of the project now on-stream involves nine producing wells. A second phase currently in planning will focus on the Argonauta O North field.

The pressure of water on the seabed is about 180 bar (2,600 pounds per square inch) — 180 times the average pressure at sea level  — and too much for a human diver to bear. Temperatures are near-freezing and the sun’s rays cannot penetrate. Remotely operated submarines steered by crews at sea level installed the pumps, well-head machinery and other equipment piece by piece.

Adding to the challenges, the resources lie in small to medium-sized reservoirs under a seabed terrain made unstable by shifting sands. To prevent sand, mud and shale from falling back into the well while drilling, Shell pumped in a mix of synthetic oil with additives under high pressure to hold the hole open. And the geological make-up of each reservoir varies, with the density of oil ranging from very heavy in the Ostra field to light in Abalone.

Some of the oil at Parque das Conchas has a high gas content. To prevent this gas from entering the pumps and damaging them, Shell installed machines to separate the oil from gas on the seabed, rather than on a surface platform or onshore. Instead of burning this gas off, it is being pumped back into the Ostra field for storage until construction of a gas export pipeline system is complete.

Round-the-clock operations

The oil is pumped up to an FPSO because of the remote location of the fields, far from any pipelines, The vessel — a converted tanker — can store nearly 1.5 million barrels of oil for shipment to shore, enough to fill over 600 million soft drink cans. Laid end-to-end, the cans would circle the world twice. From there, tankers take it to markets.

In a further technical breakthrough, Shell developed huge steel umbilical cables to connect the FPSO to the seabed equipment in each of the reservoirs over a 270-square kilometre area. The electrical and hydraulic power they supply, along with the anti-freeze chemicals, is vital to keep operations running around the clock.

“Developing breakthrough technologies and being successful in Parque das Conchas will allow the development of other deep-water projects in Brazil and elsewhere,” says Steven Grant, Subsea Team Lead of the project at Shell Brasil.

More information

For more information, interview requests or photography, please contact:
Wendel Broere or David Williams at Shell Media Relations
T: +31 70 377 3600 


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 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 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, 2008 (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, December 9, 2009. 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.

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