Shell adds new, deep-water production with latest FPSO in Brazil

"The Brazilian pre-salt fields are some of the best deep-water provinces in the world," said Andy Brown, Upstream Director for Shell.  "With significant flow rates, deep-water Brazil projects are breaking even under $40 per barrel.  We commend Petrobras on this production milestone, and we look forward to progressing additional development plans with our consortium partners as well as for our recently-acquired, deep-water Brazil blocks."

Following Lula Extreme South, the next FPSO is P-67 for Lula North. The Libra product sharing agreement continues to progress with an extended well test as well as the Mero 1 FPSO, and additional FPSOs are planned.  Shell also has development drilling planned for its operated, Gato do Mato South field in 2019.

Shell has a 25 percent stake in the Lula consortium, operated by Petrobras (65 percent).  Galp, through its subsidiary Petrogal Brasil, holds the remaining 10 percent interest.

Editor's Notes:

• P-69 is Shell's 14^th deep water FPSO in Brazil, which includes FPSOs in the pre-Salt Campos and Santos Basin. Shell operates the BC-10 and Bijupira & Salema FPSOs.
• Shell's interest in the Lula field is subject to unitization agreements.
• Shell's deep water business produces approximately 740 thousand barrels of oil equivalent per day (boe/d) and is expected to reach approximately 900 thousand boe/d by 2020 from already discovered, established areas.
• Recent bid rounds offer Shell significant potential for additional deep-water discoveries, bringing the company's total operated presence offshore Brazil to 27 concessions and approximately 2.7 million acres.
• The forward-looking breakeven price presented above is calculated based on all forward-looking costs associated from FID. Accordingly, this typically excludes exploration and appraisal costs, lease bonuses, exploration seismic and exploration team overhead costs. The forward-looking breakeven price is calculated based on our estimate of resources volumes that are currently classified as 2p and 2c under the Society of Petroleum Engineers' Resource Classification System. As this project is expected to be multi-decade producing, the less than $40 per barrel projection will not be reflected either in earnings or cash flow in the next five years.

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