Shell begins production at Parque das Conchas (BC-10) offshore Brazil

13 July, 2009

Rio de Janeiro, July 13, 2009 - Shell today started production at its multi-field Parque das Conchas project 110 kilometres off Brazil's south-east coast, where heavy oil resources lie beneath waters nearly two kilometres deep in the Campos Basin.

"This marks a major milestone in delivering oil from Brazil's deep water and demonstrates Shell's capability of delivering projects on time and on budget in a complex environment" said Marvin Odum, Shell Upstream Americas Director. "We are proud of the many technologies this project advanced, the jobs it created and the investment it spurred," he added. "It's a testament to strong relationships and shared values -- a true partnership between the people and government of Brazil and Shell."

Parque das Conchas is a two-phase project with initial production drawn from three fields: Abalone, Ostra and Argonauta B-West. The first phase, now on-stream, involves nine producing wells and one gas injector well. The second phase will focus on the Argonauta O-North field. Shell executed a host of new and advanced technologies to meet the project's many challenges, among them water depth and oil viscosity:

Electric pumps of 1,500 horsepower drive the oil 1,800 metres up to the surface for processing in a floating, production, storage and offloading vessel (FPSO), Espírito Santo, which is more than 330 metres long. It can process 100 thousand barrels of oil and 50 million cubic feet of natural gas per day and store nearly 1.5 million barrels of oil for shipment to shore by transport tankers

Technology highlights:

• Parque das Conchas is the first full-field development using subsea oil and gas separation and subsea pumping.
• The water depth required weight reduction and the development of buoyant steel risers - flexible steel pipes several kilometres long that anchor the FPSO in place.
• The field geology with its scattered formations demanded extended horizontal drilling for better production.
• To keep the heavy oil (API 16-42) flowing, the FPSO, with 68 megawatts of power generation capacity, feeds power to the deep-water separation and high pressure pumping systems through huge electrical umbilical cables.
• To avoid flaring and reduce CO2 emissions, natural gas produced with the oil will be separated and pumped back into the Ostra field until a gas export pipeline system is complete.
Project interests
Shell Brasil Ltda. (operator) 50%; Petróleo Brasileiro S.A. - Petrobras (35%); and ONGC Campos Ltda. (15%). Shell has produced oil in Brazil since 2003, in the Bijupirá and Salema fields.

Project Timeline
· First discovery well drilled in 2000.
· Final discovery well (to date) drilled in 2003.
· Final Investment Decision taken in October 2006.

Shell