NORTH AMERICA INVESTOR VISIT

Transcription

1 ROYAL DUTCH SHELL PLC NORTH AMERICA INVESTOR VISIT UPSTREAM AMERICAS: PROFITABLE GROWTH IN SHELL HEARTLAND MARVIN ODUM DIRECTOR UPSTREAM AMERICAS 1 Copyright of Royal Dutch Shell plc 28/9/21

2 SHELL UPSTREAM AMERICAS OVERVIEW ORGANISATION PRODUCTION AND CAPITAL INVESTMENT PRODUCTION CAPITAL INVESTMENT Heavy Oil Deepwater/ Oil Onshore Gas Exploration 714 KBOE/D $9.2 BILLION ONSHORE GAS DEEPWATER HEAVY OIL On-shore tight gas and shale gas operations DW operations Other Oil operations Oil Sands mining + In-situ Exploration strategy Growing resource base 29 2 Copyright of Royal Dutch Shell plc 28/9/21

3 TRACK RECORD UPSTREAM COST IMPROVEMENT $ Bln SAFETY UPSTREAM AMERICAS Injuries TRCF per million working hours FX PENSIONS PROVISIONS COST SAVINGS Q QUARTERS ROLLING 3 Continuous improvement Organization efficiency Logistics Procurement/Contract management 2 jan 28 apr 28 jul oct jan apr 29 jul oct jan apr 21 jul oct Copyright of Royal Dutch Shell plc 28/9/21

4 SUSTAINABLE DEVELOPMENT CO2 WATER MANAGEMENT STAKEHOLDER + NON-TECHNICAL QUEST CARBON CAPTURE & STORAGE Alaska drilling program Athabasca river - Alberta Groundbirch tight gas drilling 4 Copyright of Royal Dutch Shell plc 28/9/21

5 UPSTREAM AMERICAS EXPLORATION 5 Copyright of Royal Dutch Shell plc 28/9/21

6 EXPLORATION GLOBAL STRATEGY EARLY ACCESS & UNIQUE GEOLOGICAL KNOWLEDGE DRIVE DISCOVERIES TO PRODUCTION DEPLOY INTEGRATED TECHNOLOGY ALASKA FOCUS, DELIVERY, CAPABILITY IMAGING BC-1 LEVERAGE NEARBY INFRASTUCTURE FOCUS ON MATERIAL OPPORTUNITIES HAYNESVILLE MARS PLATFORM 6 Copyright of Royal Dutch Shell plc 28/9/21

7 EXPLORATION PORTFOLIO UPSTREAM AMERICAS Arctic Alaska Beaufort Leases, 5 & 7 Chukchi Leases, 8 North America Gas Haynesville entry, 7 & 8 Groundbirch entry, 8 EagleFord & Marcellus entry, 1 Gulf of Mexico OCS Lease Sales, 7-1 Guyana / Fr. Guiana Offshore Blocks, 9 & 1 Colombia Onshore Leases, 7-1 Offshore Leases, 1 Brazil Onshore & offshore leasing 7 Copyright of Royal Dutch Shell plc 28/9/21

8 ALASKA CHUKCHI & BEAUFORT SEA Chukchi Sea Alaska North Slope type stratigraphy SHELL LEASEHOLD Beaufort Sea 1 8s 9s undeveloped d oil and gas discoveries Shallow-water drilling (~3-5 meters water depth) and shallow target depths ( kilometer) Key challenge remains regulatory and judicial delay CHUKCHI SECTION Crackerjack Klondike Burger 199 Successful leasing in #1 Chukchi position with 1.6 mln acres #1 Beaufort Sea position with.8 mln acres Proven, undeveloped petroleum province with multi-billion boe potential 8 Copyright of Royal Dutch Shell plc 28/9/21

9 GULF OF MEXICO DEEPWATER EXPLORATION THREE ACTIVE PLAYS Paleogene Perdido, Stones Miocene W. Boreas, S. Deimos Vito, Cardamom Deep Mesozoic Appomattox, Vicksburg 1 Miles Paleogene - Stones, Perdido Miocene South Deimos, West Boreas, Vito, Cardamom Deep CONCEPTUAL X-SECTION Mesozoic Appomattox, Vicksburg In-depth regional studies & subsurface models to high-grade portfolio Proprietary seismic imaging technologies and well calibration Infrastructure advantage 9 Copyright of Royal Dutch Shell plc 28/9/21

10 GULF OF MEXICO PORTFOLIO REJUVENATION PORTFOLIO RELOADING 2-21 DRILLING SUCCESS RATE # of blocks leased 1 Miocene 8 Paleogene 6 Mesozoic 4 2 ' '1 '2 '3 '4 '5 '6 '7 '8 '9 '1 H1 SYSTEMATIC DE-RISKING 1% 5% % ' '1 '2 '3 '4 '5 '6 '7 '8 '9 '1 H1 MIO/PALEOGENE Princess Discovery 1 st EGoM Lease Sale Drill 1 st Pg Discovery & Expand Leashold Stones Discovery Expand Leasehold Drill Vito, W. Boreas, S. Deimos, & Card Deep Discoveries Subsurface Evaluation MESOZOIC Shiloh Discovery Vicksburg Discovery & Expand Leasehold Appomattox Discovery & Appraisal Early acreage moves ahead of the competition Systematic de-risking with advanced seismic imaging and key well data Step-up in success rates since drilling adds >5 mln boe for Shell 1 Copyright of Royal Dutch Shell plc 28/9/21

11 29-1 DISCOVERIES: VITO AND APPOMATTOX HUB CLASS DISCOVERIES WITH 1 KBOE/D POTENTIAL (1% BASIS) Vito Vito Appomattox (Shell 8%, operator) Discovery well and successful sidetracks drilled in first half 21 Potential to establish Shell-operated, area infrastructure hub > 25 million boe resources with upside potential Synergy with 27 Vicksburg discovery (Shell 75%) ~1 kilometers east Vito (Shell 55%, operator) Successful appraisal first half 21 Pre-salt reservoirs unlocked with proprietary seismic processing > 2 million boe resources Vito Discovered Vito Appraised Appomattox Discovered Appomattox Appraisal FID Expected Appomattox 11 Copyright of Royal Dutch Shell plc 28/9/21

12 UPSTREAM AMERICAS DEEPWATER PRODUCTION & GROWTH 12 Copyright of Royal Dutch Shell plc 28/9/21

13 DEEPWATER DEVELOPMENT HISTORY 13 Copyright of Royal Dutch Shell plc 28/9/21

14 GULF OF MEXICO RECENT EVENTS SPONSOR OF THE MARINE WELL CONTAINMENT SYSTEM Shell moratorium impacts 4 Floater and 4 TLP/platform rigs impacted in GoM, 1Fl Floater in Alaska Delayed drilling & exploration activities: Production 21 impact ~8 kboe/d Alaska drilling program delayed Standby period to upgrade and recertify Rigs/Equipment/Mgt Systems for safe and compliant deployment post-moratorium Cost mitigation on rigs negotiated: 75-9% reduction in standby rig rates Development activities continuing Mars B FID Mitigation for moratorium industry response progressing new developments 14 Copyright of Royal Dutch Shell plc 28/9/21

15 MARS BASIN RESOURCES GROWTH ADDING VALUE WITH TECHNOLOGY & EXPLORATION MARS RESOURCE OVERVIEW Deimos Subsea Mars TLP Sea Floor Million Boe (1%) 2, 1,5 Antares Salt 1, Produced Venus Salt 5 Mars discovery 1989 Satellite finds + Mars performance 21 view Mars Basin Prolific hydrocarbon basin Shell leadership position Technology + innovation 1996: Mars platform towed to location 15 Copyright of Royal Dutch Shell plc 28/9/21

16 CONTINUED VALUE CREATION: MARS BASIN PRODUCTION HISTORY Kboe/d at 1% / Expansion/PtL 98 Debottle- 24/5 neck Waterflood Katrina Mars Discovery First Oil Mars First Oil King & Europa First Oil Deimos Subsea Tie-Back West Boreas Discovery South Deimos Discovery 5 KM Mars-B FID '96 '98 ' '2 '4 '6 '8 '1 71.5% Shell (Operator) 1989 discovery;~9 meters water depth Mars-B FID September 21: 1 kboe/d TLP; 215 start-up Tapping new resources on Mars basin South Deimos and West Boreas tie-backs Mars B Mars A ' Copyright of Royal Dutch Shell plc 28/9/21

17 NEW POTENTIAL AT AUGER: CARDAMOM DEEP SEISMIC OVERVIEW Auger Platform PRODUCTION Kboe/d 1 1 Auger North Auger Main 5 5 Cardamom '94 '96 '98 ' '2 '4 '6 '8 '1 ' /1 Discovered First Oil First TLP Subsea-Fields Macaroni Serrano Oregano Habanaro Llano Deep Cardamom discoveries 211/12 Deep Cardamom Subsea system Expected FID Shell 1% (operator) Auger TLP & Cardamom Auger 1993: 1 st application of a Tension Leg Platform in deepwater (82 meters water depth) Cardamom Deep discoveries in 29/1 (>1 million boe resources) Development options > 2 kboe/d 17 Copyright of Royal Dutch Shell plc 28/9/21

18 PERDIDO: START-UP IN 21 Shell 33.3% (operator); Peak production ~1 kboe/d Substantial oil in place > 3 billion boe Recoverable resources > 4 million boe upside from technology development First oil in March 21 Industry first production in Lower Tertiary Development drilling planned for 5+ years New world record deepest drilling and production system RESERVOIR VIEW 4.8 km 5 KM Seismic overview of Great White 18 Copyright of Royal Dutch Shell plc 28/9/21

19 SHELL DEEPWATER GULF OF MEXICO SHELL GOM DEEPWATER PRODUCTION Kboe/d 5 5 W. Boreas, S. Deimos >15 million boe resources Tie-back to Mars B Shell 72% (operator) Mars B FID for new TLP, Shell 72% (operator) ~1 kboe/d '94 '97 ' '3 '6 '9 Cardamom Deep Auger TLP extended reach discovery & appraisal > 1 million boe resources > 2 kboe/d potential Shell 1% (operator) Vito >2 million boe resources ~1 kboe/d potential '15+ Shell 55% (operator) Auger Brutus Holstein Mars Nakika Ursa Appomattox ~1 kboe/d hub potential > 25 million boe resourcesrces Shell 8% (operator) Perdido Caesar/Tonga ~5 kboe/d 29 FID Shell 22.5% Stones Assessing early production options ~8 kboe/d potential Shell 35% (operator) 2 KM NEW HUB EXISTING PRODUCTION HUB SHELL LEASEHOLD 29 production ~25, boe/d >25, boe/d new potential for Shell 19 Copyright of Royal Dutch Shell plc 28/9/21

20 BRAZIL: BC-1 PRODUCTION PERFORMANCE FIELD LAY-OUT Kboe/d at 1% Jan Feb March April May June July August 2 BC-1 Discovered Shell 35% ACTUAL 21 PLAN BC-1 Declared Commercial Shell stake increased to 5% First Oil Phase 2 FID Shell 5% (operator); 178 meters water depth; Oil in place: ~1.1 billion boe; resources >3 million boe Unlocking heavy oil in deepwater Phase 2 FID September 21 Argonauta ON field development Sustaining gplateau production Exploration upside 2 Copyright of Royal Dutch Shell plc 28/9/21

21 NORTH AMERICA HEAVY OIL 21 Copyright of Royal Dutch Shell plc 28/9/21

22 SHELL NORTH AMERICA HEAVY OIL PORTFOLIO MINING IN SITU/OTHER PRODUCTION OVERVIEW 29 Production; ~17 kboe/d Peace River Athabasca Cold Lake IN SITU/ OTHER MINING AERA CAPACITY OUTLOOK Kboe/d 4 2 Mine + In Situ+ AERA Expansion Debottlenecking Carmon Creek Mine Expansions Large resources + growth potential Cost performance Footprint management ~22+ ONSTREAM CONSTRUCTION OPTIONS 22 Copyright of Royal Dutch Shell plc 28/9/21

23 IN-SITU AND COLD PRODUCTION AERA TRACK RECORD PEACE RIVER POTENTIAL AERA TRACK RECORD Belridge field CYCLIC STEAM STIMULATION AERA Energy LLC Shell/Exxon (Shell 51.8%) Production ~16 Kboe/d (1%) 9 key fields ~ 15, wells Drill ~ 8 to1, wells /year Enhanced Oil Recovery (Waterflood and Steam Injection) One of California s largest oil and gas producers 18 Kboe/d (21 est.) Cold & thermal Studying Carmon Creek development ~8 Kboe/d Cyclic steam and vertical steam drive injection 1.5 billion resources potential Produced its billionth barrel in Copyright of Royal Dutch Shell plc 28/9/21

24 AOSP: OIL SANDS MINING >7 BILLION BARRELS RESOURCES POTENTIAL Substantial portfolio of 125, hectares Rapid growth since FID in1999 (base project + Expansion-1) 255 Kboe/d mine capacity Ramp-up in bln boe of resources in production ~4 years of production Next Steps: optimization + debottlenecking ~85 Kboe/d growth opportunity Paced incremental investment SCALE: 1 km Assessing >1 mtpa CO 2 CCS scheme (QUEST) Long term growth potential ti FID pace slowed in 28 Continuing with selected permit applications AOSP & QUEST = 6% SHELL AND 2% EACH CHEVRON & MARATHON. VOLUMES ON 1% BASIS 24 Copyright of Royal Dutch Shell plc 28/9/21

25 OIL SANDS ECONOMICS >$1 BN/YEAR CASH FLOW POTENTIAL FOR SHELL AOSP net cash flows = $Bln (Shell).32.5 Base project 2 start up Expansion 1 start up Kbbl/d Upgrader start up CASH FROM OPERATIONS CAPITAL INVESTMENT PRODUCTION (RHS) Bulldozer in Muskeg Mine 255 Kbbl/d from a 3.4 Bln bbls Resource base $19 Bln development cost: $5 - $6/bbl $75,/flowing barrel Base project pay-back <5 years@ $54/bbl Expansion 1 adds value >$7 - $75/bbl Overview Scotford upgrader 25 Copyright of Royal Dutch Shell plc 28/9/21

26 NORTH AMERICA TIGHT GAS 26 Copyright of Royal Dutch Shell plc 28/9/21

27 NORTH AMERICA TIGHT GAS: PORTFOLIO COMPETITIVE POSITIONING IN KEY PLAYS PRODUCTION GROWTH Kboe/d 25 Mmscf/d + 17 % 1,4 29Acreage New Positions West Canada Foothills Pinedale % 1,2 1, 8 Marcellus 1 6 Eagle Ford South Texas Haynesville JV Rapid portfolio growth build following Pinedale success since H1 Industry leading tight gas portfolio ~$17 billion E&A + acquisition invested since 21: ~4tcfe resources potential Focus on low cost entry + contiguous acreage positions 27 Copyright of Royal Dutch Shell plc 28/9/21

28 TIGHT GAS ECONOMICS SHELL ACREAGE BREAK-EVEN PRICES $/mcfe 8 6 Expected gas price range 4 LEARNING CURVE ACCELERATION Indexed Well Delivery Time per year since first production Mature plays Emerging plays Total BREAKEVEN PRICE ONGOING BASIS ENTRY COST Drill + complete: rapid pay-back + cost performance Economics: Low break-even: $3-$5/mcfe (NPV basis) Cash operating costs < $2/mcfe Attractive returns and price upside 2 Pinedale - 22 Early Deep Basin - 25 Deep Basin - 28 Haynesville - 28 Groundbirch Years 28 Copyright of Royal Dutch Shell plc 28/9/21

29 TIGHT GAS POTENTIAL ~215 PRODUCTION OUTCOMES Bcf/d CAPEX AND CASH FLOW POTENTIAL $Bl Bln 8 6 ~$15 Bln ~$2 Bln ~$25 Bln Investment CASH FLOW OUTCOMES ON $4 BLN/YR CAPEX SCENARIO $8 HH $6 HH 4 Capex range $4 HH ~4 Tcfe resource potential Portfolio can support spend $3-5 billion per year Budgeting on a 6-12 month rolling programme Range of production outcomes Cash flow potential + price upside Copyright of Royal Dutch Shell plc 28/9/21

30 SUMMARY 3 Copyright of Royal Dutch Shell plc 28/9/21

31 UPSTREAM AMERICAS OUTLOOK PRODUCTION Kboe/d Significant growth for Shell OECD risk profile + price upside Safety, SD and cost performance Build-up of investment choices Exploration to production Tight gas & heavy oil Investment pace ONSHORE GAS DEEPWATER HEAVY OIL TIGHT GAS GROWTH DRIVEN BY INVESTMENT PACE; PRE-ASSET SALES 31 Copyright of Royal Dutch Shell plc 28/9/21