SPDC Sets Out its Future Intent for Nigeria

Royal Dutch Shell plc

SPDC Sets Out its Future Intent for Nigeria

AsiaNet 53480

PORT HARCOURT, Nigeria, June 22, 2013/PRN=KYODO JBN/--

    The Shell Petroleum Development Company of Nigeria Ltd (SPDC) as operator

of the Nigerian National Petroleum Corporation (NNPC)/SPDC joint venture (SPDC

JV) today announced that the SPDC JV (NNPC 55%, SPDC 30%, TOTAL 10%, NAOC 5%)

has taken final investment decisions for the Trans Niger Pipeline loop-line

(TNPL) and the Gbaran-Ubie Phase Two projects, both in Nigeria's eastern Niger

Delta.  The total capital investment for the two bundles of projects is around

$3.9 billion.  SPDC has also announced today a strategic review of the

interests that it holds in selected onshore leases in the SPDC JV.

    SPDC Managing Director, Mutiu Sunmonu said: "Today's announcements

demonstrate our long term commitment to Nigeria by clearly signaling our intent

for the strategic direction of Shell in Nigeria."

    New investment in Nigeria oil and gas

    The Trans Niger Pipeline (TNP) is important for Nigeria, pumping some

180,000 barrels per day of crude oil to the Bonny Export Terminal and is part

of the gas liquids evacuation infrastructure, critical for continued domestic

power generation (Afam VI power plant) and liquefied gas exports.

    Sections of the TNP have been heavily impacted by sabotage and crude oil

theft. The design of the TNPL includes improvements which make the pipeline

better protected against crude oil theft and sabotage, which should help to

reduce pollution related to criminal activity which was a key aspect of a 2011

United Nations Environment Programme (UNEP) report on Ogoniland. The total

capital investment for the TNPL project bundle is expected to be $1.5 billion.

    The Gbaran-Ubie Phase Two project consists of five gas supply and

infrastructure projects which are critical for the continued gas supply to the

Nigeria Liquefied Natural Gas (NLNG) plant and the Gbaran-Ubie domestic power

plant (IPP). The total investment for the Gbaran-Ubie Phase Two bundle is $2.4

billion. The expected peak production from these projects is 215 kboe per day

(100%).

    Mutiu Sunmonu commented: "These investments will help to secure energy

supplies for domestic and international markets.  The TNPL project demonstrates

the tangible steps SPDC and its partners are taking to tackle the scourge of

criminal activity - pipeline sabotage and crude theft in the Niger Delta, which

is the cause of so much environmental and economic damage in this region."

    Strategic review of SPDC interests in selected onshore leases

    Today, Shell's 100%-owned subsidiary, SPDC, announced the initiation of a

strategic review, consultation with partners, and the potential exit from the

interests it holds in some further onshore leases in the Eastern part of the

Niger Delta, subject to partner and regulatory approvals. The SPDC JV produced

around 750 kboe per day of oil and gas in 2012 from 28 Oil Mining Licenses

(OMLs) across the Niger Delta, both onshore and in the near offshore. SPDC has

been following a strategy of selective divestments of its onshore portfolio,

concentrating the operating footprint into a smaller, more contiguous area,

while supporting the Government's policy of encouraging investment by

indigenous companies in the Nigerian oil and gas industry. Since 2010, SPDC has

sold its interest in eight OMLs for a total of $1.8 billion.

    Mutiu Sunmonu further commented: "Nigeria remains an important part of

Shell's portfolio, with clear growth potential, particularly in deepwater and

onshore gas. This strategic review marks another step in re-focusing the SPDC

portfolio."

    Notes for editors

    The Shell Petroleum Development Company of Nigeria Ltd (SPDC) is the

operator of an unincorporated joint venture (SPDC JV) with the Nigerian state

oil company NNPC, Total E&P Nigeria Limited ("TOTAL") and Nigerian AGIP Oil

Company Limited ("NAOC").

    TNPL is proposed to be executed by three indigenous contractors who have

grown steadily over the past five years from medium sized companies to big

players in the industry. The construction of the Gbaran-Ubie Phase Two project

includes local and international companies. The estimated Nigerian Content

value in terms of in-country manpower, goods and services that will be utilized

in the execution of these projects is over 66%.

    The social and economic benefits to the local communities are substantial.

Aside from direct employment, many of the sub contractors will come from the

local communities in line with the JV partners' local content commitment to

develop capabilities within the Niger Delta region. There will also be direct

social investment in skills growth and direct investment via the Global

Memorandum of Understanding (GMOU) model.

    Figures for oil & gas production and capital investment in this press

release are shown on a 100% joint venture basis.

    Cautionary note

    The companies in which Royal Dutch Shell plc directly and indirectly owns

investments are separate entities. In this announcement "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

announcement refer to companies in which 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". In this announcement, associates and jointly

controlled entities are also referred to as "equity-accounted investments". The

term "Shell interest" is used for convenience to indicate the direct and/or

indirect (for example, through our 23 per cent shareholding in Woodside

Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or

company, after exclusion of all third-party interest.

    This announcement contains forward looking statements concerning the

financial condition, results of operations and businesses of Shell and the

Shell Group. 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

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exposure of Shell and the Shell Group 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

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"expect", "goals", "intend", "may", "objectives", "outlook", "plan",

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operations of Shell and the Shell Group and could cause those results to differ

materially from those expressed in the forward looking statements included in

this announcement, including (without limitation): (a) price fluctuations in

crude oil and natural gas; (b) changes in demand for Shell's products; (c)

currency fluctuations; (d) drilling and production results; (e) reserves

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

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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 announcement 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

Shell's 20-F for the year ended 31 December 2012 (available at:

http://www.shell.com/investor and http://www.sec.gov ). These factors also

should be considered by the reader.  Each forward looking statement speaks only

as of the date of this announcement, 21 June 2013. Neither Shell nor any of its

subsidiaries nor the Shell Group 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 announcement.

    Enquiries:

    Shell Media Relations

    International:  +44-207-934-5550

    Americas: +1-713-241-4544

    Shell Investor Relations

    International: +31-70-377-4540

    North America: +1-713-241-1042

    SOURCE: Royal Dutch Shell plc  

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