SPDC Sets out its Future Intent for Nigeria

Port Harcourt, Nigeria (ots/PRNewswire) -

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.

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