January 29, 2008

Shell Scotford Upgrader Expansion 1 UpdateShell Scotford Upgrader Expansion 1 Update

René Rombout, Project ManagerDocument #: LLS.56561.ppt Agenda Item #: 7.1

Athabasca Oil Sands project construction, 1999-20Athabasca Oil Sands project construction, 1999-20

• AOSP was the first fully integrated oil sands project in 25 years

• One of the largest employers in trades and construction workers in Canada, with a peak workforce of 10,000 in 2002

• Set an industry safety record in Alberta and a new standard for safety in Canada

• Created about 450 full-time jobs at Shell, plus 150 full-time contractor positions

• Flawless startup, with full production in just over a year

What is AOSP Expansion 1?What is AOSP Expansion 1?

• Expansion of the Scotford Upgrader, increasing capacity to 255,000 barrels per day from the current 155,000 barrels per day

• Construction of mining and extraction facilities at the Jackpine Mine, north of Fort McMurray

• Expansion of froth treatment facilities at the existing Muskeg River Mine

• Common infrastructure to support long-term bitumen production plans at the mine and upgrader

Shell Scotford Upgrader Expansion 1Shell Scotford Upgrader Expansion 1

• Our craft and construction management workforce at site will peak in 2009

• Once operating, the expansion will create 350 full-time Shell positions and 100 full-time contractor jobs at the upgrader

Upgrader by the numbersUpgrader by the numbers

• Amount of cable used … 2,400 km or nearly the distance between Toronto and Vancouver

• Amount of concrete poured … 60,000 cubic metres, enough to build a sidewalk curb from Fort McMurray to Edmonton

• Amount of steel used … 30,000 mt, or enough to build a railroad track from Toronto to Ottawa

• Number of piles … 18,000 pounded into the ground at an average depth of 20 metres, or the length of about 350 Canadian football fields

Construction Activities 2007Construction Activities 2007

• High safety performance

• Very good local companies

• New 80-metre steel storage tank built for early diluent stock

• Piling activity nearing completion

• First piperack module, made by Aecon, placed in December

Construction Activities 2007Construction Activities 2007

• Construction of concrete batch plant completed summer 2007

• Delivery of high-pressure vessels to site in Q2 2007

• Attracting enough carpenters and ironworkers has been a challenge

Construction Activities 2008Construction Activities 2008

• Construction of new control room

• Placement of steel, vessels and equipment will commence

• Erection of some 600 modules made by Aecon, KBR, PCL, TIC

EngineeringEngineering

• Engineering peaked at 1,500 staff in Calgary, Edmonton, Toronto, Houston, New Delhi and Shanghai

• Lessons learned from the existing Scotford Upgrader were used

• Canadian construction companies and steel fabricators were brought in early to capture their best practices

WorkforceWorkforce

• We see motivated and experienced workers at our site. Open and positive culture

• We support the training and development of workers by investing in schools like NAIT

• Target is to exceed 20% trades apprentices

Traffic managementTraffic management

• Improved the intersection of Highway 15 and Range Road 214/Highway 830

• Improved site access along Township Road 560A

• Gravel trucks timed at off-peak hours. Our batch plant “removes” 100 concrete trucks per day from roads

• Continued consultation with area industry on traffic planning

Traffic managementTraffic management

• Bussing program started Spring 2007

• Currently 50% of our site personnel use the Diversified busses

• As our construction workforce increases, bussing use will rise to 80%

• Number of busses expected to peak at approximately 130

Upgrader Expansion 2Upgrader Expansion 2

• Increase production by 400,000 barrels per day in four phases

• Each phase includes diluentrecovery unit, bitumen blender, supporting utilities

• One-hundred per cent Shell-owned

• Stakeholder consultation will continue through 2008

• With approval, construction could begin in early- to mid-2009

Questions???Questions???