Shell starts production at Appomattox in the Gulf of Mexico

First structure in Norphlet comes online ahead of schedule, below FID estimate

HOUSTON, May 23, 2019 /PRNewswire/ — Royal Dutch Shell plc, through its subsidiary Shell Offshore Inc (Shell) announces today that production has started at the Shell-operated Appomattox floating production system months ahead of schedule, opening a new frontier in the deep-water US Gulf of Mexico. Appomattox, which currently has an expected production of 175,000 barrels of oil equivalent per day (boe/d), is the first commercial discovery now brought into production in the deep-water Gulf of Mexico Norphlet formation.

Shell’s Appomattox Platform in the Gulf of Mexico

“That Appomattox was safely brought online ahead of schedule and far under budget is a testament to our ongoing commitment to drive down costs through efficiency improvements during execution,” said Andy Brown, Upstream Director, Royal Dutch Shell. “Appomattox creates a core long-term hub for Shell in the Norphlet through which we can tie back several already discovered fields as well as future discoveries.”

Appomattox is a story of efficiency through innovation. By way of optimised development planning, better designs and fabrication, and expert drilling execution, Appomattox has realised cost reductions of more than 40% since taking final investment decision in 2015. The start of production at Appomattox is only just the beginning of further maximising the flow of resources in the prolific Norphlet surrounding Appomattox.

Shell’s global deep-water business has a strong funnel of development and exploration opportunities in Brazil, the US, Mexico, Nigeria, Malaysia, Mauritania, and the Western Black Sea.  Production worldwide is on track to reach more than 900,000 boe/d by 2020 from already discovered, established reservoirs. The company continues to be one of the largest leaseholders in the US deep water and remains one of the most prolific offshore producers of oil and natural gas in the Gulf of Mexico. Shell designs and operates its deep-water projects to be competitive and, since 2014, has reduced its unit development costs and unit operating costs by about 45%.

Cautionary Note

The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities. In this release “Shell”, “Shell group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to Royal Dutch Shell plc and its subsidiaries in general or to those who work for them. These terms are also used where no useful purpose is served by identifying the particular entity or entities. ”Subsidiaries”, “Shell subsidiaries” and “Shell companies” as used in this release refer to entities over which Royal Dutch Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally referred to as “joint ventures” and “joint operations”, respectively.  Entities over which Shell has significant influence but neither control nor joint control are referred to as “associates”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.

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This release contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as “aim”, “ambition’, ”anticipate”, ”believe”, ”could”, ”estimate”, ”expect”, ”goals”, ”intend”, ”may”, ”objectives”, ”outlook”, ”plan”, ”probably”, ”project”, ”risks”, “schedule”, ”seek”, ”should”, ”target”, ”will” and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this release, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. No assurance is provided that future dividend payments will match or exceed previous dividend payments.  All forward-looking statements contained in this release are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Royal Dutch Shell’s Form 20-F for the year ended December 31, 2017 (available at www.shell.com/investor and www.sec.gov). These risk factors also expressly qualify all forward-looking statements contained in this release and should be considered by the reader.  Each forward-looking statement speaks only as of the date of this release, May 23, 2019. Neither Royal Dutch Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this release.

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Editor’s Notes: – Appomattox is a joint venture between Shell (79%, operator) and CNOOC Petroleum Offshore S.A. Inc., a subsidiary of CNOOC Limited (21%). – The Appomattox floating production system is located approximately 80 miles (129 kilometres) south east of Louisiana in the Gulf of Mexico Norphlet formation, in approximately 7,400 feet (2,255 metres) of water. – In 2010, Appomattox was an industry-first in a series of commercial discoveries by Shell in the Norphlet. – The estimated peak production for Appomattox represents 100% total gross figures. – The Mattox Pipeline Co. LLC (Mattox) is a 90-mile (145 km), 24-inch (61 centimetres) system with a 300,000 barrels per day capacity that will move the produced crude oil from Appomattox westward to the Proteus pipeline system and then onshore. Mattox is jointly owned by Shell GOM Pipeline Company LLC and CNOOC Petroleum Sales U.S.A. Inc., an indirectly wholly-owned subsidiary of CNOOC Limited. – Mattox was completed months ahead of schedule and under budget.