ROYAL DUTCH SHELL PLC SPILLS AND REMEDIATION

Transcription

1 ROYAL DUTCH SHELL PLC SPILLS AND REMEDIATION PORT HARCOURT, NIGERIA OCTOBER 10, 2012 Copyright of Royal Dutch Shell plc 10 October

2 SPILLS JURGEN JANZEN PIPELINE ASSET MANAGER Copyright of Royal Dutch Shell plc 10 October

3 CAUTIONARY NOTE Spill volumes, both due to operational and crude theft/sabotage activities, are estimates made during the regulated Joint investigation visits. The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this presentation 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 presentation refer to companies in which Royal Dutch 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 presentation, 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% shareholding in Woodside Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest. This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. 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 statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell 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 terms and phrases such as anticipate, believe, could, estimate, expect, intend, may, plan, objectives, outlook, probably, project, will, seek, target, risks, goals, should and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this presentation, 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 completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including potential litigation and regulatory measures as a result of climate changes; (k) economic and financial market conditions in various 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 presentation 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 Royal Dutch Shell s 20-F for the year ended 31 December, 2011 (available at and ). These factors also should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, 10 October Neither Royal Dutch Shell nor any of its subsidiaries 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 presentation. There can be no assurance that dividend payments will match or exceed those set out in this presentation in the future, or that they will be made at all. We use certain terms in this presentation, such as resources, that the United States Securities and Exchange Commission (SEC) guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No , available on the SEC website You can also obtain these forms from the SEC by calling SEC Copyright of Royal Dutch Shell plc 10 October

4 CHALLENGES: CRUDE OIL THEFT AND THE ENVIRONMENT Copyright of Royal Dutch Shell plc 10 October

5 CHALLENGES: ILLEGAL REFINING & THE ENVIRONMENT Illegal refining in Niger Delta Copyright of Royal Dutch Shell plc 10 October

6 CHALLENGES: CRUDE OIL THEFT STEALING CRUDE OIL FROM THE PIPELINE SYSTEM Copyright of Royal Dutch Shell plc 10 October

7 CHALLENGES: CRUDE OIL THEFT Cotonu boats used in crude theft Copyright of Royal Dutch Shell plc 10 October

8 CHALLENGES: CRUDE OIL THEFT Okololunch fire during theft attempt, Sep Copyright of Royal Dutch Shell plc 10 October

9 CHALLENGES: CRUDE OIL THEFT Okololunch: fire SPDC during and theft NLNG attempt, initial fire-fighting Oct 2012 and clean-up efforts, Oct 2nd 2012 Copyright of Royal Dutch Shell plc 10 October

10 CHALLENGES: CRUDE OIL THEFT Jones Creek 47 sabotage 2009 initial blaze Efforts after road construction Copyright of Royal Dutch Shell plc 10 October

11 SOKU GAS PLANT: EFFECTS OF CRUDE OIL THEFT Soku gas plant 2008 Copyright of Royal Dutch Shell plc 10 October

12 SOKU GAS PLANT: AFTER CLEAN UP Soku gas plant 2010 Copyright of Royal Dutch Shell plc 10 October

13 SPDC JV 3 RD PARTY PIPELINE INCIDENTS JAN AUG Copyright of Royal Dutch Shell plc 10 October

14 THEFT FROM SPDC JV PRODUCTION MEASURED THEFT FROM SPDC TRUNKLINES 000 bbl/d 60 PERSISTENT LONG TERM THEFT Theft measured from trunk lines only Unquantified amount stolen from wellheads and flow lines Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Oil theft loss Oil theft: Imo River area THEFT: ~15,000,000 bbls (2011) SPDC OPERATIONAL SPILLS: ~3600 bbls (2011) Copyright of Royal Dutch Shell plc 10 October

15 2012 YTD OIL SPILLS 2012 SPILLS (VOLUME) barrels OPERATIONAL SPILL VOLUMES (2011 VS 2012) barrels 5,000 1,000 4, , , , Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Sabotage/theft Operational Others 2011 Operational 2012 Operational Other : 9 Spills with cause yet to be determined Copyright of Royal Dutch Shell plc 10 October

16 OPERATIONAL SPILLS Security problems limit access + maintenance Pipeline corrosion internal + external Cathodic protection (CP) Corrosion inhibition Integrity data Clamp failure Nembe Creek trunk line replacement Copyright of Royal Dutch Shell plc 10 October

17 PIPELINE SURVEILLANCE CURRENT PIPELINE MONITORING Station discharge pressures significant pressure drops in the line will shut-in production (in case of line rupture/massive spill or oil theft). Walking-the-Line 600 community contracts in place to physically check our lines for leaks, encroachment, oil theft and to maintain Right of Way (RoW). Weekly helicopter flight check major pipeline systems for spills and oil theft TECHNOLOGY INITIATIVES UNDERWAY RoW intrusion and leak detection - trial installation of FibreOptics Pressure monitoring OnRamp wireless data transmission of all manifold pressures Watercut metering on production station outlets Hacksaw cut on 12 line at Ikarama, Oct 2011 Copyright of Royal Dutch Shell plc 10 October

18 TRANSPARENCY IN OIL SPILL REPORTING TRANSPARENCY spills Copyright of Royal Dutch Shell plc 10 October

19 REMEDIATION TONY ATTAH VICE PRESIDENT SAFETY, ENVIRONMENT, SD & COMMS Copyright of Royal Dutch Shell plc 10 October

20 OIL SPILL RESPONSE PROCESS Stop the leak by shutting down Contain the spill by booms, dykes, or in pits Joint Investigation Visit (JIV) Investigate the cause of the spill Record damage from spill Estimate spilled volume of oil & JIV Report Sample JIV Report 2012 online spill database since January 2011 Recover the spilled volume Carry out site clean-up Surface cleaning of the site Remediate site remove oil from soil/groundwater Get the site remediation certified Compensate the damage where applicable Carry out root cause analysis Copyright of Royal Dutch Shell plc 10 October

21 REMEDIATION TECHNOLOGIES BIOTIC REMEDIATION ABIOTIC REMEDIATION In-situ Ex-situ Immobilization (Fixation & Stabilization) Thermal desorption RENA Technique: Systematic soil tilling, windrows construction & leveling coupled with nutrient amendment Remediated & Restored site Periodic soil analysis to assess TPH biodegradation degree & soil quality Regulatory certification Copyright of Royal Dutch Shell plc 10 October

22 REMEDIATION PERFORMANCE REMEDIATION PERFORMANCE REMEDIATION OUTSTANDING # of spills sites # of spills sites Special Sites 2012 Spills 2011 Spills 2010 Spills 2009 Spills 2008 Spills 2007 Spills 2006 Spills 2005 Spills Aug Aug 2012 No. Spills in Year Total Outstanding TRANSPARENCY BACKLOG REDUCTION Legacy Copyright of Royal Dutch Shell plc 10 October

23 2012 OIL SPILL CLEAN-UP PERFORMANCE PRE-2012 BACKLOG PERFORMANCE number of spills REDUCE TIMELINES 120 days days 324 days days days days Actual pre-2012 backlog certification Actual pre-2012 backlog remediated REMOVAL OF PRE-2012 BACKLOG FASTER CLEAN UP OF SPILLS Containment JIV (swamp) Oil recovery Clean up PCI Assessment Contracting Execute remediation Certification Copyright of Royal Dutch Shell plc 10 October

24 REMEDIATED SITES EXAMPLES BEFORE & AFTER Trunkline spill at Iriama: before cleanup Trunkline spill at Iriama: cleanup Trunkline spill at Iriama: cleanup and remediation Trunkline spill at Iriama: post cleanup and remediation Copyright of Royal Dutch Shell plc 10 October

25 REMEDIATED SITES EXAMPLES BEFORE & AFTER 16 Nun River Kolo Creek T/L at Aguobiri before Remediation 16 Nun River Kolo Creek T/L at Aguobiri after Remediation Copyright of Royal Dutch Shell plc 10 October

26 THIRD PARTY REVIEW BUREAU VERITAS To provide independent limited assurance for SPDC JV s externally reported data (number of spill incidents, spill volumes and cause of spill) To verify effectiveness of SPDC Oil spill management processes and procedures To verify that execution in SPDC aligns with documented processes/procedures and standards. Also to confirm that the processes meet international standards and are transparent, involve key stakeholders 3 RD PARTY VERIFICATION OF OIL SPILL RESPONSE BV participation in JIV Nkpoku - Bomu trunkline, Aug 2012 Copyright of Royal Dutch Shell plc 10 October

27 THIRD PARTY ADVISORY PANEL IUCN Ensure the remediation and rehabilitation of SPDC oil spill affected ecosystems are based on sound scientific advice Develop a set of standards and good practice guidance for SPDC JV s implementation of remediation and rehabilitation practices.. Work with the Nigerian regulator(s) Develop appropriate monitoring and environmental, social and health impacts and recovery indicators.. Provide periodic assessments of the success of SPDC s implementation of the Panel recommendations Develop a strategy to safeguard remaining areas of biodiversity importance from effects of potential future spills. Build/increase capacity of local Nigerian organisations 3 RD PARTY VERIFICATION OF REMEDIATION PRACTISES Copyright of Royal Dutch Shell plc 10 October

28 SPILL AND REMEDIATION PERFORMANCE QUESTIONS & ANSWERS Copyright of Royal Dutch Shell plc 10 October