Shell Beaufort and Chukchi Sea

Program: Arctic Panel Discussion

Pete Slaiby
Vice President, Shell Alaska

September 27, 2010

1
 2011 Proposed Operations

Drill two offshore wells during brief

open water drilling season (July-
October)

Shallow hazards surveying (future

drill site clearance)

Ecological science data gathering

(offshore and onshore)

Offshore ice gouge surveying &

geotech soil sampling to support
needed infrastructure technology

Marine mammal monitoring

The Noble Discoverer anchored in Dutch Harbor, Alaska in 2007
supporting operations

2
 Shell Three-Tier Oil Spill Response

Nearshore Onshore
Offshore
Vessels Vessels
Vessels - landing craft and utility
- OSRV (Nanuq) - Barge
- Work boats vessels
- Arctic Tanker
- Work boats - Skimming vessel
- Vessel of Opportunity - Mini barges
Booms

Skimmers & Pumps

Skimmers & Pumps

Booms

Misc Equipment
- Decon connex Misc Equipment
- Workshop/Tool connex - Storage and tools
Booms

3
 Oil Spill Contingency Plan Support
State and Federal Standards reviewed and approved
World class Contingency Plan reviewed by BOEM, EPA, US Coast Guard,
FWS, NMFS, North Slope Borough and upheld in court(s)
Worst Case Discharge Scenario for 2011 significantly lower than required
Response Planning Standard
Shell response capabilities exceed required Response Planning Standard
SINTEF (oil in ice research) study and trials

4
 Proposed Sub-sea Containment System Development

Flare Boom Gas/Liquid

Separator

Oil/Water Temp Oil

Separator Storage

Pinch Hydraulically
Valve powered pump
Water Outlet
Overboard Support
Vessel

Submitted new commitments to

BOEM May (5th) 2010 Multi-Phase
Hose

System to capture and recover

hydrocarbons from well control
incident Containment
Dome

Mooring Line
Leak

Leveraging GOM DW Industry

Anchor

Solution Post BP Macondo Additions

Will be ready for 2011 Season
Available for on site deployment
• Second rig relief well capability
• BOP testing every 7 days instead
• Use of second set of shear rams
• Sub-sea remote operating panel
relocation
• ROV/Diver options on/near site

5
Shell – Size of the Prize
Conservative estimates: 25 billion
Chukchi Sea Beaufort Sea
barrels of oil and 120 TCF of gas in
275 Leases 137 Leases
Alaska Arctic (MMS mean estimate)

Most material OCS hydrocarbon

Trans-Alaska
outside of Deepwater GOM OCS Pipeline

Exceeds east/west coast OCS

resources combined

National economic benefits

Hundreds of millions with Alaskans

/offshore service providers

137 Beaufort leases - $84M; 275

Chukchi leases - $2.1 Billion; Total
investment to date: $3.5 billion

6
7
 Baseline Science Supports Exploration in Alaska

$500 Million and growing (Shell $50M)

 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
8
 Stakeholder Solutions

Finding common ground with

the people of the North Slope

Over 400 meetings with

stakeholders since 2006

Incorporating feedback: air

permit, discharge, drilling
blackouts during whaling in
Beaufort Sea

Revised program reflects our

social performance goal:

“Minimize impacts to people and the

environment where we work”