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Shell Beaufort and Chukchi SeaProgram: Arctic Panel Discussion

Pete Slaiby

Vice President, Shell Alaska

September 27, 2010

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2011 Proposed Operations

Drill two offshore wells during briefopen water drilling season (July-October)

Shallow hazards surveying (futuredrill site clearance)

Ecological science data gathering(offshore and onshore)

Offshore ice gouge surveying &geotech soil sampling to support

needed infrastructure technology

Marine mammal monitoringsupporting operations The Noble Discoverer anchored in Dutch Harbor, Alaska in 2007

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Shell Three-Tier Oil Spill Response

Nearshore

Vessels- Barge- Work boats- Skimming vessel- Mini barges

Skimmers & Pumps

Booms

Misc Equipment- Decon connex- Workshop/Tool connex

Offshore

Vessels- OSRV (Nanuq)- Arctic Tanker- Work boats- Vessel of Opportunity

Skimmers & Pumps

Booms

Onshore

Vessels- landing craft and utility

vessels

Booms

Misc Equipment- Storage and tools

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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 requiredResponse Planning Standard

Shell response capabilities exceed required Response Planning Standard

SINTEF (oi

l in ice research) study and trials

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Proposed Sub-sea Containment System Development

Submitted new commitments to

BOEM May (5th) 2010

System to capture and recover

hydrocarbons from well controlincident

Leveraging GOM DW Industry

Solution

Will be ready for 2011 SeasonAvailable for on site deployment

Containment

Dome

Hydraulically

powered pump

Flare Boom

Multi-Phase

Hose

Support

Vessel

Temp Oil

Storage

Mooring Line

Anchor

Leak

Pinch

ValveWater Outlet

Overboard

Oil/Water

Separator

Gas/Liquid

Separator

Post BP Macondo Additions 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

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Trans-AlaskaPipeline

Beaufort Sea137 Leases

Chukchi Sea275 Leases

Conservative estimates: 25 billionbarrels of oil and 120 TCF of gas in

Alaska Arctic (MMS mean estimate)

Most material OCS hydrocarbonoutside of Deepwater GOM OCS

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

Shell Size of the Prize

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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

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Stakeholder Solutions

Finding common ground withthe people of the North Slope

Over 400 meetings withstakeholders since 2006

Incorporating feedback: airpermit, discharge, drillingblackouts during whaling inBeaufort Sea

Revised program reflects oursocial performance goal:

Minimize impacts to people and theenvironment where we work