Upstream

Shell has a 35 per cent share of oil production from two offshore Xijiang oil fields, located 150 km south of Hong Kong in the South China Sea. Shell’s partners in the fields are CNOOC and ConocoPhillips, which jointly operate the fields. These two fields in 2008 produced an average of 46,300 barrels/day

Shell is the operator of Changbei natural gas field under a Production Sharing Contract with PetroChina, signed in 2005.
 
The field started commercial production on 1st March 2007 and reached the annual production target in 2008, two years ahead of schedule. It delivers at a rate equivalent to 3BCM/year of natural gas to markets in Beijing, Shandong, Hebei and Tianjin.

Thanks to Changbei’s operational excellence and outstanding safety record. The top management of PetroChina says: “Our upstream business should learn from Changbei.”

Shell (55%) is developing the North Shilou CBM block under a Product Sharing Contract (PSC) with China United Coalbed Methane Company (40%) and Verona (5%).  The project is now in exploration phase.

Shell is the largest IOC LNG supplier to China in terms of contract volume following the two Sales and Purchase Agreements with Chinese partners in 2008, which will deliver 5 mtpa of LNG per year in the next decade in addition to other supplies of 1 mtpa per year to Guangdong and Shanghai via our joint venture projects in Australia and Malaysia.

Shell is a partner of the Hangzhou city ring joint venture that develops, operates and manages a high-pressure natural gas pipeline system in Hangzhou. Currently, the venture supplies 300 million cubic metres of gas per day to 370,000 families and some industrial and commercial users in Hangzhou.