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Shell to Make More Waves with Deep-Water Drilling

Shell to Make More Waves with Deep-Water Drilling

Shell Exploration & Production Co. (SEPCo) plans to move forward with its 17th deepwater project while at the same time rededicating itself to a cost cutting program for its deep-water activity.

SEPCo plans to develop the Brutus oil and gas discovery by building a tension leg platform (TLP) to drill beneath 2,985 feet of water. Production from the asset is expected to begin in 2001. The Brutus project is located 165 miles southwest of New Orleans on Green Canyon block 158. Total project cost is around $900 million, including pipeline cost but excluding leasing cost. At peak rates, Shell expects the site to produce 100,000 Boe/d and 150 MMcf/d. The TLP will be Shell's fifth in the GOM and will serve as a hub for future subsea projects in the area.

Although cost cutting is planned, Shell said it plans to continue developing strategic deepwater assets in 1999, specifically the Angus and Macaroni projects. Like the Brutus project, the $200 million Angus facility is located in the Green Canyon area of the GOM. The water depth is 2000 feet, and ultimate recovery is estimated at 64 million Boe. Production is expected in the second quarter of 1999. Shell owns 80% of the project, and operates the drilling. Marathon Oil owns the other 20%

The Macaroni project is located 225 miles southwest of New Orleans in the Garden Banks area of the Gulf. It also has a TLP platform that drills into depths of 3,700 feet. The $270 million project is 100% owned by Shell. Ultimate recovery is estimated at 78 million Boe, with production scheduled to begin in mid-1999.

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