1. Copyright February 2001 - Shell International E & P All Rights Reserved ASME/API Gas-Lift Workshop Sheraton - North Houston Houston, TX February 6 and 7, 2001 Gas-Lift from Shell's Perspective - a World of Challenge

2. Copyright February 2001 - Shell International E & P All Rights Reserved Arthur Hale Shell International Exploration & Production Wells Cluster Well Productivity

3. Copyright February 2001 - Shell International E & P All Rights Reserved The Supply Side The Demand Side Where Shell’s Gas Lift Business is Today Opportunities for Improvement Path Forward

4. Copyright February 2001 - Shell International E & P All Rights Reserved 85% Rod Pump (561,000 wells) 9% Gas Lift (59,400 wells) 3% Electric Submersible Pump (19,800 wells) 3% Hydraulic Pump and Other Methods (19,800 wells) –Per World Oil Worldwide Artificial Lift Share

5. Copyright February 2001 - Shell International E & P All Rights Reserved Market Share - 1998 Total - $80.5 million

6. Copyright February 2001 - Shell International E & P All Rights Reserved The Supply Side Strength in current business environment Two major suppliers Two smaller suppliers Market size - 60,000 wells worldwide Market value - $85 million

7. Copyright February 2001 - Shell International E & P All Rights Reserved GL 25% BP 8% ESP 5% Other 1% Natural 61% Art. Lift 39% Shell Group Oil Production

8. Copyright February 2001 - Shell International E & P All Rights Reserved Gas-Lift is a Global Business for Shell

9. Copyright February 2001 - Shell International E & P All Rights Reserved A Gas-Lift “Triangle” Vision for Gas-Lift Simulate, Create, Operate Hardware Mandrels, Valves, Servicing Implementation Training, Surveillance, Automation, Supplier relationship

10. Copyright February 2001 - Shell International E & P All Rights Reserved Vision for Gas Lift Status Development Planning is better than in the past Incorporate artificial lift into depletion plans Capital projects support artificial lift Room for Improvement Select the right Artificial Lift Method: Fully integrate artificial lift methods into reservoir simulation tools Stick with the field development plan (don’t change horses in mid-stream)

11. Copyright February 2001 - Shell International E & P All Rights Reserved Hardware Status Mandrels for retrievable valves are good Valves available in a range of operating types  injection, production, differential, orifice, venturi Servicing Methods are variations on a theme  slickline, coiled tubing, tractor, pump-down Room for Improvement Provide funding for R&D of Gas Lift Equipment:  Improve reliability of valves-reduce service frequency.  Support suppliers willing to make better equipment. Establish clear equipment selection guidelines

12. Copyright February 2001 - Shell International E & P All Rights Reserved Implementation Status Training - available, accessible, affordable Surveillance - process is complex, low risk, often low priority Automation - System configuration and methods are maturing Supplier Relationships - commodity, service, Operator-managed Room for Improvement: Training - A process, not an Event Surveillance- Calibrate models with real data-Champion is required Automation is the catalyst that drives the process:  Enables “Field Optimization” not just “Well Operation” Establish cooperative Supplier / Consumer relationships  Shared risks and rewards

13. Copyright February 2001 - Shell International E & P All Rights Reserved Challenge for 2005 Information from, and control of gas-lift wells in Sub-Sea and Deepwater fields Extend the range of gas lift further down the depletion curve Strengthen business relationships between suppliers and operators

14. Copyright February 2001 - Shell International E & P All Rights Reserved Where Do We Go? Include Gas-Lift experts in the planning stages of new fields Strengthen our understanding of current technology Make improvements where warranted Reach for a Step-Change in Gas-Lift materials and methods Take the holistic approach Gas Lift is a process that permeates every facet of a field’s operation.

15. Copyright February 2001 - Shell International E & P All Rights Reserved Summary Gas Lift is regarded as a commodity Industry needs a Step-Change in engineering and operation to meet the challenges that we face

16. Copyright February 2001 - Shell International E & P All Rights Reserved On the Supply Side