Shell Offshore, a wholly owned subsidiary of Royal Dutch Shell, announced this Monday it has taken its Final Investment Decision (FID) on the Whale development of the Gulf of Mexico. However, the actual amount of investment Shell will make was not disclosed.
Firstly, Whale is a deep-water development in the U.S. Gulf of Mexico; it features a 99% replicated hull and an 80% replication of the topsides from Shell’s Vito project. The development locates in the Alaminos Canyon Block 773; adjacent to the Shell-operated Silvertip field, approximately 10 miles from the Shell-operated Perdido platform; approximately 200 miles southwest of Houston.
Secondly, Shell discovered the field back in 2017; and it will feature a semi-submersible production host in more than 8,600 feet of water with 15 oil producing wells. It will be Shell’s second deep-water development in the Gulf of Mexico to employ a simplified, cost-efficient host design.
Thirdly, with such development approach, the company expects an internal rate of return estimated to be greater than 25%. In fact, the project will feature energy-efficient gas turbines and compression systems. Such technologies will position the Whale project among the lowest greenhouse gas intensity in the world for producing oil.
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Shell implementing its Powering Progress strategy
Moreover, the project will reach peak production of approximately 100,000 barrels of oil equivalent per day (boe/d) and currently has an estimated, recoverable resource volume of 490 million boe. Shell Offshore owns the project in 60%, and stands as its operator; while Chevron U.S.A. owns 40% of the project.
In addition, Whale will be Shell’s 12th deep-water host in the Gulf of Mexico and is currently scheduled to begin production in 2024. The FID for whale and the particular approach for its production, comes after Shell’s Powering Progress strategy, which intends to thrive through the energy transition by increasing investment in lower carbon energy solutions, while continuing to pursue the most energy-efficient and highest-return Upstream investments.
On the other hand, Wael Sawan, Shell Upstream Director, said about the project. “Whale is the latest demonstration of our focus on simplification; replication and capital projects with shorter cycle times to drive greater value from our advantaged positions.”
Finally, he also remarked. “We are building on more than 40 years of deep-water expertise to deliver competitive projects that yield high-margin barrels; so that we are able to meet the energy demands of today while generating the cash required to help fund the development of the energy of the future.”
