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Copyright of Shell UK Limited Subsea P&A: A step change in rig site hazard exposure through risk- based design and execution Lynda Nwike Wells Subsea Design Engineer Shell UK 1 October 2017

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Copyright of Shell UK Limited

Subsea P&A:

A step change in rig site hazard exposure through risk-

based design and execution

Lynda Nwike

Wells Subsea Design EngineerShell UK

1October 2017

Shell

The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal 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 over which Royal Dutch Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally

referred to “joint ventures” and “joint operations” respectively. Entities over which Shell has significant influence but ne ither control nor joint control are referred to as “associates”. The term “Shell interest”

is used for convenience to indicate the direct and/or indirect 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’’, ‘‘goals’’,

‘‘intend’’, ‘‘may’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, “schedule”, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ 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 regulatory measures addressing climate change; (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 risk factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended December 31, 2016 (available at

www.shell.com/investor and www.sec.gov ). These risk factors also expressly qualify all forward looking statements contained in this presentation and should be considered by the reader. Each forward-

looking statement speaks only as of the date of this 15 March 2017. Neither Royal Dutch Shell plc 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.

We may have used certain terms, such as resources, in this presentation that United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. U.S.

Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov.

Definitions and Cautionary Note

2Copyright of Shell UK Limited

Shell

Agenda

• Overview of A&C wells

• The Risk Based Approach to Design

• Scope removal & Optimisation from 2016 Base Case

• A&C Planning and Execution Improvements

• 2016 Plan vs 2017 Execution

• Total HSE exposure reduction & Execution times

• The bigger picture. What next?

• Q&A

October 2017 3Copyright of Shell UK Limited

Shell

A&C Well Overview

14

Shell

Atlantic and Cromarty Field Overview

▪ 3x suspended subsea production gas wells in the

Central North Sea.

▪ Project in partnership with Hess.

▪ Cameron STM -15 wellheads and horizontal trees.

▪ Horizontal trees – all operations conducted with tree

in place.

▪ Water depth ~380ft

October 2017 5Copyright of Shell UK Limited

Shell

Atlantic and Cromarty project timeline

6October 2017

2005-06• Wells drilled with Global Santa Fe 140

2010• Cessation of production for the A&C wells

2014

• Well Enhancer LWIV used to plug and lubricate all wells.

• Well content bullheaded into reservoir

• 2 x bridge plugs installed in well

• 2 x crown plugs set in SXT

2017

• Rig move survey March

• Atlantic and Cromarty PDHG Pressure check on Goldeneye April to confirm P&L plugs still holding.

• Well abandonment completed July-Aug with Ocean Patriot rig

• Subsea tree and wellhead severance planned for October

Copyright of Shell UK Limited

ShellCopyright of Shell UK Limited

Subsurface overview

• All wells have sidetracks in the Chalk which is predominantly

without flow potential.

• All side-tracks deemed as fully abandoned.

7

Reservoir: One NPNT hydrocarbon reservoir: Captain

Sandstone. Sub hydrostatic reservoir. Max recharge pressure

would be to a hydrostatic gradient.

Reservoir seals: Rodby and Carrack formations are the original

reservoir seal. Signs of instability when the well was drilled.

Formations would provide an additional annular seal to lateral

isolations in chalk.

Tertiary group: Water bearing sands right above the Chalk

group. No indications of abnormal pressures.

Chalks: The chalk group forms the external element for the

reservoir lateral isolation.

Shell October 2017 8

Well Status BeforeWell P&L’d with LWIV

2x plugs set:1x in liner

1x in tailpipe

Tubing cut

Hold open sleeve set

2x crown plugs set:1x in internal tree cap

1x in tubing hanger

Well Status

AfterWell P&A’d with Rig

1x barrier set:• 1x combined PWC

plug to isolate

captain reservoir set

across the Chalks

1x environmental plug:• 1x plug to cap OBM

using Perforate

Circulate Cement

technique

630pptf

OB

M

510pptf

WB

M

HSXT (no guideposts) HSXT (no guideposts)

510pptf

WB

M

Environmental plug

Combined

abandonment

barrier

Top Chalk Gp

Herring

Black Band Bed

Hidra

Rodby

Carrack

🔴 Captain

Sea

Undifferentiated

Tertiary

Lower Mackerel

Upper Mackerel

Top Chalk Gp

Herring

Black Band Bed

Hidra

Rodby

Carrack

🔴 Captain

Sea

Undifferentiated

Tertiary

Lower Mackerel

Upper Mackerel

Copyright of Shell UK Limited

Shell

Risk Based Approach to Design

29Copyright of Shell UK Limited

Shell October 2017 10

Brent/ Subsea Experience

Competitive Scoping

Strong collaboration

between Wells and subsurface teams

Experience & lessons learnt from

other Operators

Holistic Ways of Thinking

Risk Based

Approach Cost Reduction

Lower HSE Exposure

Removal of unnecessary

scope

Copyright of Shell UK Limited

Shell

Scope removal and optimisation

311Copyright of Shell UK Limited

Shell October 2017 12

84 total

46 total

38

11

21 days WOW/NPT

11 days WOW/NPT 4 days WOW/NPT

0

10

20

30

40

50

60

70

80

90

2016 Plan Planning Optimisations 2017 Plan Execution Optimisations 2017 Delivered

Da

ys

Time

A&C Planning & Execution Improvements

35 total

Copyright of Shell UK Limited

Shell October 2017 13

• Subsea Tree tied back to Goldeneye platform.

• Pressure gauge deep in well allowed pressure monitoring capability.

• Allowed well pressure to be measured and confirm deep set barrier integrity.

• Removed risk of having to rig up pressure containing intervention equipment

(Subsea Test Tree etc.)

• Pulled completion with crown plugs and barriers in place.

• Removed requirement to rig up e-line to pull crown plugs and install isolation

sleeve.

Removed requirement to pull crown plugs from wellhead and rig

up subsea test tree

Days removed ~ 2 days

Risks removed :

❖ Multiple lifts

❖ Working at height

Copyright of Shell UK Limited

Shell

Isolating the Captain Reservoir

October 2017 14

• PWC performed on all 3x wells.

• First deployment of PWC method on a subsea well for Shell UK.

• Hydrawell provided PWC service.

• Use single trip method on A1Y and A2Z wells.

• 2 trip solution required for C6Z due to lack of gun sump space to leave

guns below cement base.

• Did not displace excess cement from 800ft above base of

cement, final cement plug length ~1400ft. Reduced slops handling at

surface

Days removed ~ 5 days

Risks removed :

❖ Multiple lifts

❖ Swarf handling

❖ Swarf damage to equipment

❖ Swarf disposal

0

1

2

3

4

5

6

A1Y PWC

(actual)

A2Z PWC

(actual)

C6Z PWC

(actual)

Actual

Section mill

+ cement

Annulus remediation

timings (days)

Copyright of Shell UK Limited

Hydrawell’s Hydrahemera tool

ShellCopyright of Shell UK Limited

Environmental Barrier

October 2017 15

• Previous subsea wells used perforating guns, sized to perforate only one or

two casing strings with mixed success.

• A&C did not need to remediate 13-3/8” annulus.

• No requirement to cap water based mud in C-annulus.

• This will be exposed to sea during wellhead recovery operations this year.

• Utilised Gator tool from Lee Energy systems.

• GATOR tool enabled large flow areas.

• No explosives were required shallow in the well.

0

1

2

3

Cut & Pull PCC with

Perf guns

A2z PCC

with Gator

Environmental Plug Clean

Times

Days

510pptf

WB

M

HSXT (no guideposts)

510pptf

WB

M

HSXT (no guideposts)

Days removed ~2 days

Risks removed :

❖ Multiple heavy lifts on deck

❖ Casing handling and transportation

❖ Rigging up & down of casing handling

equipment

PCC Strategy Cut and pull strategy

ShellCopyright of Shell UK Limited

Wellhead and Subsea Tree Recovery

October 2017 16

• Wellhead severance and recovery: Rig based Vessel based.

• Subsea Xmas tree recovery: Rig based Vessel based.

• Unlocked Xmas tree from wellhead and locked dogs prior to

setting on wellhead for recovery later in year.

• Removes risk of handling tree/wellhead on rig – deck

constraints, rig ergonomics.

Days removed ~ 4.5 days

Risks removed :

❖ No handling of trees or wellheads

in moonpool area.

❖ Heavy Lift to supply vessel from rig

Shell

Plan vs Execution

2016 Base Plan

• Recover ~7000ft of completion

• Perform USIT/CBL log (A1 only)

• Set CH cement plug (Section mill & set OH plug on A2z

& C6)

• If unsuccessful, section mill 150ft window and set

plug

• Cut & pull production casing from ~2000ft

• Cut and pull intermediate casing from ~2000ft

• Set 500ft cement plug

• Cut and retrieve 20” and 30” string with MOST tool

• Pull and retrieve Wellhead

• Conduct seabed clearance scan

Total Days = 84.0days

October 2017 17

2017 Execution

• Recover ~7000ft of completion

• Perform USIT/CBL log (A1 only)

• Perforate 250ft of 9 ⅝” casing

• Wash perforated interval to remove solids and set

combined barrier cement plug across perforated

interval and in wellbore

• Perforate, circulate and cement B-annulus to isolate

OBM

• Wellhead and tree recovery to be performed on

separate campaign (~1.5days/well)

Total Rig days = 34.6days

Total Days (inc. vessel) = 39.1days

Days removed ~45days

Copyright of Shell UK Limited

Shell

A&C Comparative Time Review

18October 2017

0

2

4

6

8

10

12

14

16

18

20

Atlantic A1Y Atlantic A2Z Cromarty C6Z

Da

ys

Well

WOW

NPT

Clean time

Benefits of scope reduction:

• 45 days ahead of 2016 plan equates to >57,000hrs of

HSE exposure eliminated (106 POB average).

• PWC method eliminated handling of swarf in surface

circulation system and reduced deck congestion.

• Perf, circulate and cement method eliminated

handling of 48 joints of 9 ⅝” casing at surface,

shipment back onshore and disposal.

• Blending cement and expanding additive onshore

eliminated requirement for cement batch tank rig up

on the rig.

• SXT and wellheads to be recovered with vessel, no

heavy lifts from rig to supply vessel required.

Copyright of Shell UK Limited

Shell

The bigger picture

419Copyright of Shell UK Limited

Shell

WHAT DOES THIS TRANSLATE

TO?

October 2017 20Copyright of Shell UK Limited

Shell October 2017 21

LESS…

Wo

rkin

g a

t he

igh

t

CO2 emissions

Ca

sing

ha

nd

ling

Exposure Things

Exp

osu

re t

o w

ea

the

r

Logistics

Slops handling

Heavy Lifts

Manual

Handling

Slips Trips

Falls

Sw

arf

Ha

zard

s

to go wrong

NPTWOW

……

……

……

……

……

Copyright of Shell UK Limited

Shell

FOUR HIGH EXPOSURE AREAS FOR THE FUTURE

October 2017 22

• Anchor handling

• Heavy Drilling BOPs

• Elimination of divers

• Wellhead Severance

• Necessity to understand stakeholders interests.

• Need to challenge industry norms and review the benefits vs the risks.

• Understand our wells.

• High costs vs minimal risk reduction.

• What role does new technology play?

Copyright of Shell UK Limited

Shell October 2017 23Copyright of Shell UK Limited

Copyright of Shell UK Limited