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Shell Moves Ahead With 80,000 Barrel Per Day Carmon Creek Project

THE HAGUE, The Netherlands, October 31, 2013 /PRNewswire/ --

Royal Dutch Shell plc (Shell) (NYSE:RDS.A) (NYSE:RDS.B) today announced its decision to proceed with its Carmon Creek project in Alberta, Canada, expected to produce up to 80,000 barrels of oil per day. Carmon Creek is a thermal in situ project that is 100 per cent Shell owned and will be part of the company's broader production, refining and marketing business across the full value chain in North America.

"I'm pleased we're moving ahead with this important project," said Lorraine Mitchelmore, Executive Vice President Heavy Oil.  "Shell's Peace River oil leases represent a significant development opportunity. Our decision to invest in Carmon Creek has been carefully studied with the goal of designing a project that is competitive from a commercial, technological and environmental perspective."

At Carmon Creek, Shell combined its global procurement reach and technology with access to local expertise to design a facility that is both commercially viable and minimizes environmental impacts. This design includes a novel well delivery system and the use of cogeneration that will also feed power into the Alberta grid; enough to power half a million homes. Once the project is up and running the aim is to virtually eliminate the need for freshwater use for steam generation through recycling of water produced with the oil.

Carmon Creek will build on Shell's more than 30 years of experience developing its Peace River heavy oil leases and established relationships with local communities and First Nations. It is expected to employ more than 1,000 local trades and contractors during peak construction periods.

Shell submitted its regulatory application for Carmon Creek in 2010 and received approval from the Alberta Energy Regulator in April 2013, following a rigorous and transparent review process. The project is expected to provide a secure, reliable energy source and benefits to Alberta and Canada for more than 35 years.

Notes to Editors:

  • For the startup of Phase One and Two, Carmon Creek will produce from 13 well pads. An inter field pipeline system will transport steam to the wells and produce bitumen, water and natural gas that will be sent to central processing facilities. The central processing facilities will separate bitumen from water and natural gas, which can then be used to produce steam. Diluted bitumen is expected to be exported to existing North American refineries.
  • Cogeneration units are expected to produce an annual average of up to 630 megawatts (MW) of electricity, of which about 500 MW is expected to be sold to the northwest Alberta power grid.
  • Shell is taking a well manufacturing approach to drill and complete the wells using the Sirius Well Manufacturing Services joint venture. This approach is based on standardization of components, and allows quicker and repeatable operations that provides opportunities to reduce costs.
  • To minimize surface disturbance, approximately 48 wells will be closely spaced on each well pad. Each well pad will have a life of 10 to 15 years and as pads come to the end of their life the well pad equipment will be refurbished and reused on new pads and the land will be reclaimed to minimize project footprint. .
  • As is common in heavy oil construction, modules will be built elsewhere and transported to site for final assembly and commissioning.

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