Shell Exploration & Production Co. (SEPCo) plans to moveforward with its 17th deepwater project while at the same timerededicating itself to a cost cutting program for its deep-wateractivity.

SEPCo plans to develop the Brutus oil and gas discovery bybuilding a tension leg platform (TLP) to drill beneath 2,985 feetof water. Production from the asset is expected to begin in 2001.The Brutus project is located 165 miles southwest of New Orleans onGreen 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. TheTLP will be Shell’s fifth in the GOM and will serve as a hub forfuture subsea projects in the area.

Although cost cutting is planned, Shell said it plans tocontinue developing strategic deepwater assets in 1999,specifically the Angus and Macaroni projects. Like the Brutusproject, the $200 million Angus facility is located in the GreenCanyon area of the GOM. The water depth is 2000 feet, and ultimaterecovery is estimated at 64 million Boe. Production is expected inthe second quarter of 1999. Shell owns 80% of the project, andoperates the drilling. Marathon Oil owns the other 20%

The Macaroni project is located 225 miles southwest of NewOrleans in the Garden Banks area of the Gulf. It also has a TLPplatform that drills into depths of 3,700 feet. The $270 millionproject is 100% owned by Shell. Ultimate recovery is estimated at78 million Boe, with production scheduled to begin in mid-1999.

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