Conventional sources of oil alone will struggle to meet growing demand. In addition to developing conventional fields in countries such as Brunei, Malaysia and Oman, where we have been for many decades we are increasing production from more difficult-to-reach sources.
Gulf of Mexico, USA
STILL DEEPER WATER
Shell pioneered deep-water exploration and production in the 1970s, when “deep” meant producing in 450–500 metres of water. Today, “deep” means producing in more than two kilometres of water, where the pressure is more than 200 times higher than at sea level. We are producing in deep water in the Gulf of Mexico and off the Norwegian coast and remain at the technological and commercial forefront in this area.
The Perdido development in the Gulf of Mexico, for example, will connect three fields over a 50-kilometre radius and include the world’s deepest undersea wells. Production is expected to begin early in 2010. BC-10, off the Brazilian coast, will use a floating production storage and offloading (FPSO) vessel rather than a platform, to extract, store and offload the oil. It will produce from several fields that lie in waters nearly two kilometres deep. We are also developing the Gumusut-Kakap field, our first deep-water project off the coast of Malaysia. Together, these three projects are expected to contribute more than 140,000 barrels a day (more than 4%) to our production capacity after 2012.
Miri, Malaysia
THE ARCTIC FRONTIER
We are working in the Arctic and sub-Arctic regions of Alaska, Canada, Norway and Russia. These are some of the world’s harshest operating conditions and most fragile environments. The experience we have gained on projects such as the Salym joint venture in Western Siberia (see Salym) and Sakhalin II (see Sakhalin) in Russia’s far east has helped us develop many of the technologies and skills needed to operate safely and environmentally responsibly in these areas, and build effective relationships with local communities.
SQUEEZING MORE FROM EXISTING FIELDS
Today, only 30–40% of the oil contained in most reservoirs can typically be extracted economically. Technology is helping us to extract more. In Oman, for example, the joint venture we are part of is investing to increase production from mature oil fields by injecting steam into one field, gas into another and a chemical polymer into a third field. We are also injecting water to sweep out more oil at the Ursa and Princess fields in the US Gulf of Mexico, keeping those fields producing for an extra decade. We estimate that, by 2030, enhanced recovery using techniques like these could account for about 20% of the world’s oil production, up from 3% today.
Shell’s Smart Fields® technology is another option for producing more from existing fields. It uses underground sensors to get real-time information about conditions in a producing field, allowing operators to quickly react to circumstances and better plan and steer production. With this information, combined with the latest drilling and reservoir-monitoring techniques, we expect to be able to increase the total amount of oil recovered from reservoirs by 5–10%. By the end of 2009 we plan to be using Smart Fields® technology in more than 50 new and mature fields worldwide.
