Shell Signs Two New Contracts to Explore Offshore Sarawak
Apr 12, 2012
Shell Malaysia upstream operating company Sarawak Shell Berhad and partner PETRONAS Carigali Sdn Bhd today announced the signing of two new exploration and production sharing contracts (PSCs) with PETRONAS. The contracts represent new Malaysian acreage for the multinational.
Andrew Brown, Royal Dutch Shell’s Upstream International Director commented, ”Shell has been doing business in Malaysia for over 100 years and it remains a vital country central to Shell's long term global strategy. I am therefore delighted that we are still able to find new opportunities to explore and develop Malaysia’s excellent hydrocarbon resources, delivering value to the nation and energy with the world's growing needs.”
Shell’s minimum financial commitment for activities in the two blocks will be in the region of USD 145 million over the next four years. These new contracts underpin Shell’s commitment to Malaysia where the Company already invests an average of around USD 1 billion annually.
The PSCs are for blocks 2B and SK318, both offshore Sarawak. Under the agreements, Shell will undertake an aggressive drilling campaign to comprehensively explore an area totalling an estimated 9000 square kilometres in the two blocks over the respective exploration periods. The minimum work commitment includes acquisition of 3D seismic data, 5 electromagnetic surveys to acquire electromagnetic data and the drilling of 5 exploration wells in total. Shell is operator and has an 85% interest in both contracts with Carigali holding the remaining 15%.
Deepwater Block 2B is located some 300 kilometres offshore in water depths ranging from 300 to 2000 metres. The production sharing contract covers 35 years with an initial four year exploration phase. Block SK 318 is located about 200 kilometres offshore in water depths of between 200 to 1000 metres. The contract covers 27 years with a 3 year exploration period.
In executing their obligations under the PSCs, Shell will be employing new technologies such as Broadband 3D Seismic Data Acquisition, Advanced PSDM (pre-stack depth migration), advanced seismic interpretation software and tools.
The aggressive exploration program is expected to de-risk the challenging deepwater environment in the waters of North Luconia, especially with the employment of these new technologies.
Anuar Taib, Shell Malaysia chairman and managing director of Sarawak Shell Berhad commented, “We are pleased to continue to be a partner in Malaysia’s progress by helping to meet the country’s aspiration to sustain oil and gas production through intensifying our exploration activities. We thank PETRONAS for their continued confidence in us through the award of these blocks, and I look forward to using our global technology and expertise in a successful exploration campaign here.”
Shell has been operating in Malaysia since 1910, successfully venturing offshore Sarawak in the 1960s. Earlier in January this year, the company signed two new production sharing contracts to bring in enhanced oil recovery technologies to improve extraction rates in mature fields offshore Sarawak and Sabah.
Enquiries
Shell Media Relations
Asia: Cindy Lopez (cindy.lopez@shell.com) +603 2091 3719
Malaysia: Stephanie Khoo (stephanie.khoo@shell.com) +603 2091 2115
Cautionary note
The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate 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 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 release refer to companies in which Royal Dutch 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”.
The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest. This release contains forward-looking statements 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 ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘probably’’, ‘‘project’’, ‘‘will’’, ‘‘seek’’, ‘‘target’’, ‘‘risks’’, ‘‘goals’’, ‘‘should’’ 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 the Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserve 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 potential litigation and regulatory measures as a result of climate changes; (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 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 factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended 31 December, 2010 (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 release. Neither Royal Dutch Shell 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. There can be no assurance that dividend payments will match or exceed those set out in this release in the future, or that they will be made at all.
The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this release, such as resources and oil in place, that SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our 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.