Shell CEO: Alberta Tops List of New Production 'Heartlands'

Shell is rejuvenating its portfolio for a world of higher and more volatile commodity prices, increased competition, and higher costs. As part of the annual review of strategy, Shell said it is building over 50 large projects that will underpin new cash flows for decades to come.

Upstream, Shell has over 10 billion barrels of oil equivalent (boe) resources under construction, which will add approximately 1 million boe/d of production.

Jeroen van der Veer, Royal Dutch Shell's Chief Executive commented, "This is an unprecedented phase of activity for the company, leveraging our strong brand, technology, integration and scale. We are creating new heartlands for Shell in a new energy landscape."

Major investments underway today include investment in some 10 billion boe of resources that will deliver approximately 1 million boe/d of oil & gas, and are the foundation for long-term growth potential of 2 to 3%/year; 60,000 b/d of oil sands capacity, an increase of more than 60% from today's levels; and over 7 million tonnes per year of new liquefied natural gas (LNG) capacity, an increase of 50%.

Looking beyond the portfolio that is currently under construction, Shell has significant additional resources that could be developed for production, and exploration portfolios in some 14 focus basins. Over 20 potential new projects are being designed, that could commercialize over 6 billion boe of discovered resources, and produce approximately 0.8 million boe/d. There is particular potential in North America heavy oil and tight gas, and LNG in Australia.

Group oil and gas resources estimates have been increased to some 66 billion boe, with a resources life of some 55 years. This improvement reflects exploration performance, where Shell added 1.4 billion boe in 2007, and an update to the portfolio overall.

Van der Veer commented "We have made considerable progress with access to resources. Canadian heavy oil, where we have some 20 billion barrels of resources, is a classical new technology and integration play that Shell can do well. Alberta has the potential to become a major production heartland for Shell for decades to come."

Total net reserves attributable to Shell shareholders at end-2007 were 11.9 billion boe, unchanged from year ago levels.

Organic reserves additions for 2007, excluding acquisitions, divestments and year-end price effects, were 1.5 billion boe, compared to 1.2 billion boe of production, and reserves replacement was 124%. Organic reserves replacement, including year-end price effects, was 109%.

Van der Veer concluded "Shell has a substantial set of growth opportunities. We have the largest investment programme in the industry today. In a world where there are concerns about energy supply and climate change, we are making real progress with positioning the company into new heartlands. I expect top quartile performance, in a period where delivery is the key. These are exciting times at Shell."


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