Deepwater Gumusut-Kakap field commences production
Nov 20, 2012
Shell Malaysia today announced the first oil production from the deepwater Gumusut-Kakap (GK) field, located about 120km offshore Sabah, Malaysia.
This early production, achieved on November 18th, 2012, is ahead of the completion of the GK’s Floating Production System (FPS). This is made possible by an innovative linking or tie-back of two of GK’s production wells to the Kikeh production facility, the country’s first deepwater development also offshore Sabah, operated by Murphy Sabah Oil.
The GK field, located in waters up to 1,200 metres deep in Blocks J and K, is being developed using 19 subsea wells with oil to be exported via a pipeline to the Sabah Oil and Gas Terminal in Kimanis. The project will eventually employ the FPS -- the region’s first deepwater FPS -- once it is fully on stream, currently expected end 2013. The GK Kikeh tie-back early production option is an interim measure that is expected to bring an additional 25,000 barrels of oil per day to Malaysia.
“We are delighted that we have started production from the Gumusut-Kakap field.” said Iain Lo, Chairman of Shell Malaysia.
“The tie-back is an innovative solution that will allow us to produce from the GK field ahead of the completion of the FPS, currently being fabricated by Malaysia Marine and Heavy Engineering (MMHE) in Johor. We thank Murphy for their partnership and cooperation that has enabled this opportunity. We look forward to ramping up the production once the FPS goes on stream.”
Projects such as GK are critical to the industry’s long term sustainability in Malaysia as the country develops its deepwater resources. Shell is playing an active role in developing a deepwater service industry in Malaysia by bringing its technology and expertise into the country. The company began deep water exploration and production research in the 1960s and has been a global leader in deepwater exploration and production for the last 30 years.
In January last year, Shell announced an investment of RM5.1 billion to further develop oil and gas facilities across the country. The major part of which were three projects that included a new diesel processing unit at Port Dickson refinery, a new solid wax plant at Shell Middle Distillate Synthesis (SMDS) in Bintulu, Sarawak and the GK deepwater development offshore Sabah. The wax plant is now operational while the Port Dickson and GK projects are ongoing.
The Gumusut and Kakap fields were combined into a single development under a Unitisation and Unit Operating Agreement signed by co-ventures Shell Malaysia, Murphy Sabah Oil, PETRONAS Carigali and ConocoPhillips Sabah Ltd in 2006. Shell Malaysia and ConocoPhillips Sabah Ltd each hold 33% interests in the development, PETRONAS Carigali has 20% and Murphy Sabah Oil Company Ltd has 14%. Shell Malaysia upstream company, Sabah Shell Petroleum Company, is the operator of the development.
Shell Media Relations
Asia: Serene Loo, firstname.lastname@example.org, +65 97297294
Cindy Lopez, email@example.com
Malaysia: Norhayati Sulaiman-Adzhar, firstname.lastname@example.org, +603 2091 3795
ABOUT SHELL MALAYSIA EXPLORATION & PRODUCTION
Operating as production sharing contractors to PETRONAS, Shell Malaysia’s exploration and production companies are engaged in the exploration for and efficient development and extraction of crude oil and natural gas from offshore Sarawak and Sabah, with onshore operations and offices in Miri, Kota Kinabalu, Labuan, Bintulu and Kuala Lumpur. Shell also builds and operates the infrastructure needed to deliver hydrocarbons to market.
The pioneer of Malaysia's exploration and production sector, Shell drilled Malaysia’s first commercial oil well in Miri, Sarawak in 1910. The company’s upstream base is still located in Miri after a century of operations.
DEFINITIONS & CAUTIONARY NOTE:
Resources: Our use of the term “resources” in this announcement includes quantities of oil and gas not yet classified as Securities and Exchange Commission of the United States ("SEC") proved oil and gas reserves or SEC proven mining reserves. Resources are consistent with the Society of Petroleum Engineers 2P and 2C definitions.
The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this announcement "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 subsidiaries in general or to those who work for them.
These expressions are also used where no useful purpose is served by identifying the particular company or companies. "Subsidiaries", "Shell subsidiaries" and "Shell companies" as used in this announcement refer to companies in which Shell either directly or indirectly has control, by having either a majority of the voting rights or the right to exercise a controlling influence.
The companies in which Shell has significant influence but not control are referred to as "associated companies" or "associates" and companies in which Shell has joint control are referred to as "jointly controlled entities".
In this announcement, associates and jointly controlled entities are also referred to as "equity-accounted investments". The term "Shell interest" is used for convenience to indicate the direct and/or indirect (for example, through our 23 per cent shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.
This announcement contains forward looking statements concerning the financial condition, results of operations and businesses of Shell and the Shell Group.
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 Shell and the Shell Group 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 "anticipate", "believe", "could", "estimate", "expect", "goals", "intend", "may", "objectives", "outlook", "plan", "probably", "project", "risks", "seek", "should", "target", "will" and similar terms and phrases.
There are a number of factors that could affect the future operations of Shell and the Shell Group and could cause those results to differ materially from those expressed in the forward looking statements included in this announcement, 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.
All forward looking statements contained in this announcement 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 factors that may affect future results are contained in Shell's 20-F for the year ended 31 December 2011 (available at www.shell.com/investor and www.sec.gov). These factors also should be considered by the reader. Each forward looking statement speaks only as of the date of this announcement, 20 November 2012. Neither Shell nor any of its subsidiaries nor the Shell Group 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 announcement.
Shell may have used certain terms, such as resources, in this announcement that the SEC strictly prohibits Shell from including in its filings with the SEC. U.S. investors are urged to consider closely the disclosure in Shell's Form 20-F, File No 1-32575, available on the SEC website www.sec.gov. You can also obtain these forms from the SEC by calling 1-800-SEC-0330.