Production Begins at Na Kika in Gulf of Mexico.

Energy Editors/Business Editors

HOUSTON--(BUSINESS WIRE)--Dec. 8, 2003

Shell Exploration & Production Company and BP America Inc. today announced another key milestone in the development of the giant Na Kika project in the deepwater Gulf of Mexico with the achievement of first production. BP and Shell each hold 50 percent of the project.

Na Kika consists of five independent fields - Kepler, Ariel, Fourier, Herschel and East Anstey - each of which would be uneconomic to develop on its own. Shell and BP have developed the fields with the installation of a centrally located, permanently moored semi-submersible floating production facility - the first time a hub-type system has been used to develop a group of fields, all of which are of small to medium size.

The Na Kika semi-submersible production facility is moored in water some 6,300 feet deep, the deepest for any installation of its type in the world. The individual wells are in water depths that range from 5,800 to 7,000 feet.

The Kepler, Ariel and Herschel fields are primarily oil, while the Fourier and East Anstey fields are primarily gas.

A sixth field, Coulomb, which is 100 percent owned by Shell and located in 7,600 feet of water, will be tied back to the Na Kika host facility as production capacity becomes available.

At peak production, Na Kika is expected to produce some 110,000 barrels of oil per day and 425 million cubic feet per day of natural gas. Ultimate recovery from Na Kika is estimated at about 300 million barrels of oil equivalent.

BP and Shell also announced the startup of the 75-mile Na Kika segment of the Okeanos Gas Gathering System from Na Kika to Main Pass 260, where the gas will be transported to various onshore markets via the BP/Shell Destin pipeline system. Okeanos will transport gas from deepwater discoveries in Mississippi Canyon and the eastern Gulf of Mexico. The Na Kika segment of the Okeanos pipeline system was built by Shell, but is operated by BP.

"We are very excited about Na Kika startup. The facility adds significant production to our deepwater portfolio and is purpose-built for further subsea tie-backs from future discoveries in the area," said Kenny Lang, vice president of BP's Deepwater Production Business Unit. "We believe the deepwater Gulf of Mexico offers tremendous opportunities for BP."

Gaurdie Banister, regional technical director of Shell EP Americas, said today, "Shell designed an innovative concept to develop Na Kika, drawing upon our global deepwater experience and expertise. We have used groundbreaking technology to deliver this project, which is our sixth stand-alone hub in the Gulf of Mexico. I would like to pay tribute to the Shell team that has used this global experience to reach today's milestone at Na Kika."

Shell is the operator for the development phase of the Na Kika project, responsible for the design, fabrication and installation of the floating host facility and subsea production system, as well as the drilling and completion of the 10 development wells.

BP is the production operator for the project, responsible for the operation of the host facility and the satellite subsea fields.

Initial production from the first well in the development is projected to exceed 100 million cubic feet per day. Production will continue to increase over the next several months as additional new wells come online.

Na Kika is located at Mississippi Canyon Block 474, approximately 140 miles southeast of New Orleans.