Shell Wading into Deepwater Again
Shell Exploration and Production (SEPCo) said it is ready to
roll on development of a major new deep-water Gulf of Mexico
project, good for an estimated 300 million boe, at the same time it
announced another deep water discovery with potential reserves
greater than 200 million boe.
The Na Kika project, which has development costs of about $1.3
billion, is expected to begin production in mid-2003. It will
ultimately consist of six subsea production systems servicing
satellite fields tied back to a centrally located floating
production facility, an industry first for the deep-water Gulf of
Mexico. The host facility will be permanently anchored in the
Mississippi Canyon Area about 140 miles southeast of New Orleans,
The Na Kika project initially will produce hydrocarbons from
five fields: Ariel, Fourier, East Anstey, Kepler and Herschel.
SEPCo will attach the sixth field, Coulomb, which it owns solely,
back to the host facility as capacity becomes available. All six
fields are located in water depths ranging from 5,800 to 7,600
feet. Shell expects peak daily production rates to reach 325 MMcf/d
of gas and 100,000 b/d of oil.
"Developing the Na Kika project in these record-setting water
depths is one of the most substantial steps forward in application
of deepwater development technology since SEPCo's Auger tension leg
platform was installed in 1993," said Walter van de Vijver, SEPCo's
BP and SEPCo share rights to Na Kika, and BP's project sanction
is still pending. Shell will act as the pre-production operator,
responsible for installation of the host facilities and subsea
systems, as well as drilling and completion of the 10 development
wells. BP will take over as post-production operator, which
includes operation of the host facilities and surveillance of the
Shell also is heavily involved in the new Princess discovery, a
sizeable sub-salt discovery just three miles north of the giant
Ursa field, in Mississippi Canyon Block 765 in the Gulf of Mexico.
The discovery will be operated by Shell with a 45% interest, and
is located in about 3,600 feet of water, about 130 miles southeast
of New Orleans, LA. Other interest holders include BP with 23%, and
Conoco and Exxon Mobil each with 16%.
A discovery well, and three other penetrations drilled on the
discovery have encountered hydrocarbons in several areas totaling
about 300 net feet of pay. Shell believes the reservoir thickness
and quality of sands are very similar to the Ursa field, where
production has reached 100,00 b/d of oil and 140 MMcf/d of natural
gas from four wells. Potential oil and gas reserves in the new
Princess field could exceed 200 million barrels of oil equivalent.
"Princess is a significant addition to Shell's growing deepwater
inventory," said Vijver. "Common ownership of the neighboring
infrastructure at Shell's Ursa field just three miles south of
Princess allows us to consider some very cost-effective development
options for this discovery."
In addition to these projects, Shell recently announced two
other Gulf of Mexico deep-water subsea endeavors. Projects Serano,
and Oregano are scheduled to begin production in late 2001. Teamed
with the start-up of the company's Brutus tension leg platform
during the third quarter of 2001, Shell's Gulf of Mexico deep water
production is expected to break 500,000 boe/d during early 2002.