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28 Shell Investors’ Handbook
Upstream
AMERICAS
HIGHLIGHTS
� Production amounted to nearly 0.7 million boe/d, which was around 21% of our total
2011 production.
� After-tax earnings from oil and gas exploration and production operations of our
subsidiaries in the region were $3.2 billion. Our share of oil and gas exploration and
production earnings of equity-accounted investments was $1.3 billion.
� We are participating in the development of five projects in North and South
America: AOSP Debottlenecking; Parque das Conchas (BC-10) Phase 2; Eagle Ford;
Cardamom; Mars B; as well as various tight-gas projects.
KEY FIGURES
2011 % of total
Total production (thousand boe/d) [A] 688 21%
Liquids production (thousand b/d) [A] 284 18%
Natural gas production (million scf/d) [A] 1,589 18%
Synthetic crude oil production (thousand b/d) [A] 115 100%
Bitumen production (thousand b/d) [A] 15 100%
Gross developed and undeveloped acreage (thousand acres) 62,898 25%
Proved oil and gas reserves excluding non-controlling interest (million boe) [B] 3,624 26%
[A] Available for sale.
[B] Includes proved reserves associated with future production that will be consumed in operations.
NORTH AMERICA
CANADA
In total, we hold over 2,000 mineral
leases in Canada (mainly in Alberta and
British Columbia). We produce and market
natural gas, NGL, sulphur, synthetic crude
oil and bitumen. Bitumen is a very heavy
crude oil produced through conventional
methods as well as through enhanced oilrecovery
methods, such as those based on
heating the reservoirs. Synthetic crude oil
is produced by mining bitumen-saturated
sands, extracting the bitumen from the
sands, and transporting it to a processing
facility where hydrogen is added to
produce a wide range of feedstock for
refineries.
Gas
Half of our Canadian gas production
comes from the Foothills region of Alberta.
We own and operate four natural gas
processing and sulphur-extraction plants
in southern and south-central Alberta and
are among the world’s largest producers
and marketers of sulphur. Additionally,
we hold a 31.3% interest in the Sable
Offshore Energy project, a natural gas
complex offshore eastern Canada, and
have a 20% non-operating interest in an
early stage deep-water exploration asset
off the east coast of Newfoundland. We
also hold a number of exploration licences
in the Mackenzie Delta. Shell continued
to develop tight and shale gas fields in
west-central Alberta and east-central
British Columbia during 2011, through
drilling programmes and investment in
infrastructure facilitating new production.
Shell holds rights to approximately 3,200
km 2 (800,000 acres) in these tight-gas
areas.
Synthetic crude oil
We operate the Athabasca Oil Sands
Project (AOSP) in north-east Alberta as
part of a joint venture (Shell interest 60%).
The bitumen is transported by pipeline
for processing at the Scotford Upgrader,
which is operated by Shell and located
in the Edmonton area of central Alberta.
AOSP’s bitumen production capacity is 255
thousand boe/d, following an expansion
project completed in 2010. In 2011, the
expansion of the Scotford Upgrader was
completed, delivering first commercial
production in May and allowing it to
process 255 thousand boe/d. In addition,
we took the final investment decision on a
debottlenecking project for AOSP, which
is expected to add an additional 10
thousand boe/d at peak production. This
project is the first of several debottlenecking
opportunities for AOSP. We also signed
agreements with the governments of
Alberta and Canada to secure some $0.9
billion in funding for the Quest Carbon
Capture and Storage (CCS) project (Shell
interest 60%), which is expected to capture
and permanently store more than one mtpa
of CO 2 from the Scotford Upgrader.
Shell also holds a number of other minable
oil sands leases in the Athabasca region
with expiry dates ranging from 2012 to
2020. By completing a certain minimum
level of development prior to their expiry,
leases may be extended.
Bitumen
We produce and market bitumen in the
Peace River area of Alberta, and have a
steam-assisted gravity drainage project
in operation near Cold Lake, Alberta.
Additional heavy oil resources and
advanced recovery technologies are under
evaluation on about 1,200 km 2 (300,000
acres) in the Grosmont oil sands area, also
in northern Alberta.
LNG
In 2011, Shell announced investment in the
Green Corridor LNG-for-transport project
(Shell interest 100%). Pending regulatory
approval, the Green Corridor project
includes a 0.3 mtpa LNG production
facility.
UNITED STATES
We produce oil and gas in the Gulf of
Mexico, heavy oil in California and
primarily onshore tight gas in Louisiana,
Pennsylvania, Texas and Wyoming. The
majority of our oil and gas production
interests are acquired under leases granted
by the owner of the minerals underlying the
relevant acreage (including many leases
for federal onshore and offshore tracts).
Such leases usually run on an initial fixed
term that is automatically extended by the
establishment of production for as long as
production continues, subject to compliance
with the terms of the lease (including, in the
case of federal leases, extensive regulations
imposed by federal law).
Gulf of Mexico
The Gulf of Mexico is the major production
area, accounting for a little over 50%
of Shell’s oil and gas production in
the USA. We hold approximately 600
federal offshore leases in the Gulf, about
one third of which are producing. Our
share of production in the Gulf of Mexico
averaged over 180 thousand boe/d in
2011. Key producing assets are Auger,
Brutus, Enchilada, Holstein, Mars, NaKika,
Perdido, Ram Powell and Ursa.