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Shell Beaufort and Chukchi Sea Program Briefing

Pete SlaibyShell Alaska Vice President

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Historical Drilling Activities

A Familiar Frontier

Shell operated in Alaska for 50 years until 1998

1st royalty Payer to State of Alaska

Extensive experience and operations in Cook Inlet

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Shell’s Alaska OCS Leases

BPXoMTotal

Camden Bay

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Shell’s 2012 Drilling Plan

Up to three wells in Chukchi

Up to two wells in Beaufort

Two drilling rigs working in parallel

Normal Press

Near Normal Press

High Press

Very High Press

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Offshore Recovery

Nearshore Recovery

Skimming Vessels

Mini Barges

Booms, Skimmers, and Pumps

Onshore RecoveryPre-staged Equipment and Personnel

Protection Booms

Landing Craft and Utility Vessels

Skimmers

Subsea Containment System OSR Vessel (OSRV) Nanuq with Skimming Vessels

Arctic Tanker

Vessel of Opportunity

Booms, Skimmers, and Pumps

Oil Spill Response Barge (OSRB)

World Class Oil Spill Response (pre-Macondo)

9/8/2011

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Primary attachment will be directly to top of blow-out preventer (BOP) stack forming tight pressure seal

Stack is composed of conventional well control equipment assembled to allow 4 functions:

Shut well in via blind rams (with redundancy)

Flow well in controlled fashion to containment system

Pump kill fluid down wellbore

Re-enter well for well intervention activities

Conceptual Design

Capping & Kill Equipment/ Well Intervention

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Capture & Containment System

Developing Arctic Containment System

System provides a toolkit to capture oil for multiple potential well control scenarios

Primary components:

Subsea – umbilical, well intervention connections, ROV

Containment vessel

Processing - separation equipmentoil and

Containment Dome

Hydraulically powered pump

Flare Boom

Multi-PhaseHose

Support Vessel

Temp Oil Storage

Mooring Line

Anchor

Leak

PinchValve Water Outlet

Overboard

Oil/Water Separator

Gas/Liquid Separator

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Wainwright

Pt. Lay

Oil Spill Tanker Tug & BargeAnchor Handler

Sustainable Oil Spill Response

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Drill Rig

Arctic Endeavor

Kulluk

Oil Spill Recovery Barge

Arctic Tanker

Nanuq

Noble Discoverer

Hull 247

Harvey Spirit

WCD: Chukchi = 25 bopd response WCD: Beaufort = 16 bopd response

Supply

Containment Barge

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Prepared for the Arctic

Shell alone is responsible for responding to worst-case scenario

Building Arctic assets for long-term success

Hull 247 latest in Shell investments in ice-capable vessels Polar Code 3 360 feet long 70 feet wide 30,000 HP

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Baseline Science Supports Exploration In Alaska

$500 Million and growing (Shell $60M)

5000 independent scientific studies since1973

5 years of marine mammal monitoring

Tagging studies – walrus and seals

First air quality station in OCS – Beaufort

Ongoing offshore, nearshore, and onshore ecological characterization studies

Traditional knowledge studies

Health impact assessments

Up to $5 million annual science initiative with North Slope Borough

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Materiality: The Size of the Prize

USGS: Alaska OCS = 25 Billion Barrels of Oil

ISER/Northern Econ: Alaska OCS = 54,000 Jobs for 50 Years

$145 Billion in Payroll

$200 Billion in Federal Treasury

Estimated 700,000 New Barrels Per Day for TAPS