Shell Begins Ursa/Princess Waterflood Operations in Gulf of Mexico

7 July 2008

Shell has begun waterflood operations in the Ursa/Princess fields in the Gulf of Mexico. First injection of water in the Ursa/Princess Waterflood project occurred on 3 July, and is planned to continue for the next 30 years. With a listed volume enhancement capacity of 30,000 barrels of oil equivalent per day, the waterflood is expected to extend production by 10 years.

Waterflood is a method of secondary recovery in which water is injected into the reservoir formation to displace additional oil. The water from injection wells re-pressurizes the formation and physically sweeps the displaced oil to adjacent production wells.

The Ursa/Princess Waterflood topsides injection system injects filtered and treated sea water via two separate flowlines to three subsea sites—one to an existing well site northwest of the Ursa Tension Leg Platform (TLP), one to an existing well site southeast of the Ursa TLP and one to a new well site northeast of the Ursa TLP. Producing wells will include three Princess subsea wells and as many as six Ursa TLP wells.

Ursa is located in 3,800 feet of water and encompasses Mississippi Canyon Blocks 808, 809, 810, 852, 853 and 854. Princess is located in Mississippi Canyon Blocks 765 and 766, in approximately 3,650 feet of water.

The Ursa/Princess Waterflood is one of the largest construction projects on an existing platform in the Gulf of Mexico. The platform is 100 miles offshore.

Shell is operator of this project with 45.39%; BP Exploration & Production Inc. has 22.69%; Exxon Mobil Corporation and ConocoPhillips Company each have 15.96%.