4-IsG General Presentation-CGGR Conference

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1May 2010

CHALLENGES AND SOLUTIONS OF REDUCING GASFLARING IN IRAQ

Regional Forum on Gas Flaring and Associated Gas UtilisationMuscat, May 10th -11th 2010

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Mounir BouazizVice President Commercial, New Business, LNGMiddle East and North AfricaRoyal Dutch Shell Plc


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2May 2010

Disclaimer Statement

The companies in which Royal Dutch Shell plc directly or indirectly owns investments are

separate entities. In this presentation the expressions "Shell", "Group" and "Shell Group" are

sometimes used for convenience where references are made to Group companies in general.Likewise the words "we", "us" and "our" are also used to refer to Group companies in general or

those who work for them. The expressions are also used where there is no purpose in identifying

specific companies.

The information contained in this presentation contains forward-looking statements, that are

subject to risk factors which may affect the outcome of the matters covered. None of Shell

International B.V., any other Shell company and their respective officers, employees and agents

represents the accuracy or completeness of the information set forth in this presentation and

none of the foregoing shall be liable for any loss, cost, expense or damage (whether arising from

negligence or otherwise) relating to the use of such information.

All copyright and other (intellectual property) rights in all text, images and other information

contained in this presentation are the property of Shell International B.V. or other Shell

companies. Permission should be sought from Shell International B.V. before any part of this

presentation is reproduced, stored or transmitted by any means.


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3May 2010

Gas Flaring in Iraq

1.0

3


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4May 2010

Iraqs Gas Sector Fundamentals

70% of proven gas is associated gas

Supply highly dependent on oil production

Non-Associated Gas >15 tcf*

Limited gas infrastructure between regions (South Iraq holds 70% of gas)

Usable power capacity of ~5,000 MW*

Iraq needs in excess of 10,000 MW*

* Source: Energy Information Administration, Ministry of Electricity


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5May 2010

Current Status of Flaring in Iraq

Substantial volumes of Associated Gas is flared in Basrah Province

Of the ~1100 mmscf/day produced, greater than 700 mmscfe/day of gas flare

- This is equivalent to 560 mmscf/day of dry gas *, sufficient to generate

4500 MW * (the current operational power generation is 5000 MW)

- 4000 t per day of LPG * (equivalent to 320,000 LPG cylinders per day)

- 770 tons per day of Condensates *

- The current gas flare is releasing ~ 14 mtpa of CO2 per year *

Significant shortage in dry gas to fuel power plants

Significant shortage in LPG production forcing import of LPG

Loss of opportunity revenue from export of surplus LPG or dry gas

*Source: Shell estimates


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6May 2010

Flaring Will Increase Across All Licensing RoundFields

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

M

illionstandardcubifeetperday

Gas Production fromlicensing rounds(6 MMbbl/d scenario)

Current operationalGas processingcapacity

Gas

flare

d

*Source: Shell estimates based on current oil and products prices. A 4 bcf/day gas flare assumes no action is taken over the next 3

years


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7May 2010

Southern Iraq Gas Supply/Demand Scenario (LR data)

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

[bcf/day]

Domestic Demand for South Iraq Gas

LR1 + LR2 majors' bids

~4 bcf/day *

Gas demand Curve assumes: 10% annual growth in Power & Industry

The needed incremental Gas Gathering & Processing Capacity inplace

*Oil Production > 9 mbpd *

Significant Surplus

Gas

NAG & YTFPotential*

*Source: Shell estimates of gas production and demand

Assumes 80% of domestic demand for the whole of Iraq to be in the South of the country

LR :Licensing Round 1 & 2


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8May 2010

Basrah Gas Company:

A Gas Solution for South Iraq

2.0


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9May 2010

South Gas Joint Venture Key Facts

Shareholders:

South Gas Company (51%), Shell

(44%), Mitsubishi (5%)


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10May 2010

Khor Al-ZubairNGL/LPGPlant

Infrastructure Master Planning

Surplus Train

NGL train

LPG 3

NGL 1LPG 2LPG 1

NGL 2

West Qurna area

North Ramaila

South Ramaila

Zubair

LPG Terminal

Domgas

Domgas

New NGL trains

Export

LPG 4+

North RumailaNGL Plant

Existing operational capacity

Rehabilitated existingfacilities

Expansion / new facilities

Repair/Rejuvenation Plans in place and Development Plans ready for

implementation


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11May 2010

Gas Infrastructure Chain - Development andUtilisation

NGLExtraction

GasCompression

Stations

Gas TransmissionPipelines

NGL Extraction

Gas Treatment Plant

Oil Export

Infield

compression,degassingstations, pipelines

Domestic Gas

NGLs fordomesticand export

Shell has gained good insights into the current gas infrastructure and the

existing operational issues


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12May 2010

Shells in country activities and early gas capture

Development of Iraq Gas Master Plan together with MoO and Mitsubishi (2005)

First IOC to re-enter South Iraq in September 2008.

More than 700 site visits to oil & gas facilities in Basra province

To date, the South Gas Company and Shell have completed the following quick wins:

- Captured 135 MMscf/d (20% of total amount flared)

- Reduced CO2 emissions by some 4 MT/a

- $500mln/annum value created for SGC and $350mln one off savings*

- 18MW of power re-established and 52MW of new power in the pipeline

- Completed early social investment projects

*Source: Shell estimates


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13May 2010

Shells in country activities and early gas capture

(continued)

Quick Wins underway:

North Rumaila Compression Stations Upgrades target capture 90MMscf/d

- Compressor repairs and re-routing of LP gas to other station

- Sour Gas 1st stage gas capture

- Repair and replace the gas blowers in all stations

South Rumaila target capture 60MMscf/d

- Re-instate and repair compressors and re-route 1st stage gas

West Qurna compression & North Rumaila Plant target capture 150MMscf/d

- Complete gas pipeline to Rumaila plant, re-instate sweetening facilities at NR

plant- Construct compression booster station at North Rumaila plant

Zubair compression and KAZ Plant target capture 80MMscf/d

- Complete Zubair compression stations, and installations of pipelines to KAZplant

Total Quick Wins target of over 515MMscf/d* of flared gas and over 15MT/a CO2 **Source: Shell estimates


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14May 2010

Technical Quick Wins (under the HoA)

Joint work at KAZFrame 5 Procurement

K03 Compressor Repair Joint team at KAZ Plant


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15May 2010

Working Jointly with SGC

North Rumaila PlantShut Down Inspections

October 09


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16May 2010

Shell in Basrah since 2008

Stakeholder Townhall meetings inBasrah

1st Joint Mgt Com. inBasrah(outside the Shell Office)

Shell staff at KAZ Plant

Handover of refurbishedWorkshop to Vocational TrainingCenter


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17May 2010

Shell in Basrah since 2008

Shell solar-powered

street lightingproject

Celebration of QuickWins with South GasCo

Basra Oil TrainingInstitute

Vocational TrainingCentre

Training CertificatesAward in Basra


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18May 2010

Challenges and Solutions

3.0


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19May 2010


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Q & A

Documents

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