Andy Brown, Upstream Director, Shell

Today’s winning bids for Shell include a block adjacent to Shell’s Gato do Mato field (Shell 80% operating, Total 20%), a now unitized area to the Sapinhoá field (Petrobras 45% operating, Shell 30%, Repsol 25%), and the new Alto de Cabo Frio – West block (Shell 55% operating, Qatar Petroleum 25%, CNOOC Limited 20%).

“We are very pleased to expand our number of operated fields in Brazil,” said Andy Brown, Upstream Director, Shell. “These winning bids were submitted after our thorough evaluation and add strategic acreage to our already leading set of global deep-water growth options. We will determine our next steps with a focus on continued value to Shell and our shareholders. Our deep-water expertise is well-suited for the opportunities that lie ahead.”

Prior to these bidding results, Shell had previously stated plans for $10-billion investment into the early 2020s for its existing offshore developments in Brazil to support deep water as its Upstream growth priority. Shell first began working under a production sharing contract in Brazil in 2013 when it entered the Libra consortium, led by Petrobras. Shell’s history in Brazil covers more than 100-years with businesses in Upstream and Downstream.

Shell pioneered deep-water exploration and production 40-years ago in the U.S. Gulf of Mexico, and together with its partners in Brazil, the company will combine that expertise to grow its offshore production. World-wide last quarter, Shell produced more than 710-thousand barrels of oil equivalent per day (boe/d) from its deep-water business, with approximately 330-thousand boe/d production in Brazil. Other deep-water projects for Shell are in the Gulf of Mexico, offshore Nigeria, and offshore Malaysia.

Editor’s notes:

  • Today’s winning bids add more than 1,700 square kilometres to Shell’s deep-water Brazil portfolio.
  • The newly acquired blocks range 160-310 kilometres from shore.
  • Shell currently operates 2 floating, production, storage and offloading (FPSO) vessels in Brazil and is a partner in 10 other FPSOs, operated by Petrobras.

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Cautionary Note

The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal 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 announcement refer to companies over which Royal Dutch Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally referred to “joint ventures” and “joint operations” respectively. Entities over which Shell has significant influence but neither control nor joint control are referred to as “associates”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.

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With respect to operating costs synergies indicated, such savings and efficiencies in procurement spend include economies of scale, specification standardisation and operating efficiencies across operating, capital and raw material cost areas. We may have used certain terms, such as resources, in this release that United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our 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.

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