Shell Emphasizes Commitment to the North Sea

Shell recently emphasized the company's continued commitment to mature basins, including the North Sea.

Shell has the skills, technology and resources on a global scale to make the most of maturity said Tom Botts, Managing Director, Shell Expro and CEO designate of Shell EP Europe, on behalf of Walter van de Vijver, a Managing Director of Shell and Chief Executive Officer of Shell Exploration and Production, in a keynote speech at Offshore Europe, a major industry conference in Aberdeen.

One-third of Shell's reserves and production are located in the European offshore - the North Sea and the Atlantic margin – and Shell considers the area to be a heartland of its exploration and production business alongside the North America, Nigeria, Oman, Malaysia, Brunei and Australia.

"There is still very good business in mature areas for those with the necessary capabilities," said Mr. Botts on behalf of Mr. van de Vijver. "We continue to have a strong commitment to the European offshore, the North Sea and Aberdeen. This is driven not by sentiment but a clear appreciation of the potential of this area and our ability to add value here."

Shell has earmarked a third of its exploration and production capital expenditure budget to growing in its existing heartlands, a third to maximizing delivery from existing assets and a third to building new long-term positions as future heartlands around the world.

Mr. Botts said on behalf of Mr. van de Vijver that cooperation between industry and governments was essential to ensure continuing fiscal and regulatory competitiveness and to enable cross-border co-operation. He welcomed progress by British and Norwegian ministers towards agreeing essential frameworks that will allow the development of Norwegian gas to meet the impending shortfall in British supplies.

He also pointed to the importance of developing and applying technology advances in mature areas. The future of maximizing recovery lies in advances in subsurface imaging, well technology and downhole instrumentation and control to create smart wells.

Shell is reorganizing its Exploration and Production business in order to leverage global strengths, capture synergies from existing operations, standardize systems and run the growth portions of the business - Exploration and New Business Development - in a truly global way. In Europe, eight national organizations will be brought together as Shell EP Europe. Aberdeen will serve as a center for production operations in the new European organization and as a global technical centre. The new operating model will be in place by January 1, 2004.