Two separate mega projects to develop oil and natural gas resources in the Walker Ridge blocks of the ultra-deepwater Gulf of Mexico (GOM) have been launched by Royal Dutch Shell plc and partners ExxonMobil Corp. and Statoil ASA.

Stones, in 9,500 feet of water, is to host the deepest production facility in the world, Shell said Wednesday. The project, 200 miles southwest of New Orleans, contains an estimated 2 billion boe-plus.

Stones was discovered by BP plc in 2005 in the Lower Tertiary Trend (see Daily GPI, Dec. 15, 2005). As envisioned by Shell, the mega project would encompass eight federal Outer Continental Shelf lease blocks in an area where Shell now operates the Perdido natural gas development.

The first phase of development is expected to produce an annual peak of 50,000 boe/d from more than 250 million boe of recoverable resources.

“This important investment demonstrates our ongoing commitment to usher in the next generation of deepwater developments, which will deliver more production growth in the Americas,” said Shell Executive Vice President John Hollowell, who runs the Deepwater, Shell Upstream Americas business.

The final investment decision “sets in motion the construction and fabrication of a floating production, storage, and offloading (FPSO) vessel and subsea infrastructure.” Development of the 100% Shell-owned and -operated field is to begin with two subsea production wells tied back to the FPSO vessel, followed later by six additional production wells. The FPSO design would address “the relative lack of infrastructure, seabed complexity, and unique reservoir properties,” according to Shell. With an FPSO, tankers would be able to transport oil to U.S. refineries, while natural gas could be handled by pipeline.

According to Shell, a turret with a disconnectable buoy would allow the FPSO vessel to “weathervane in normal conditions and to disconnect from the well system and sail to safe areas in the event of adverse weather conditions.” A “lazy wave riser” configuration is planned, consisting of a steel catenary riser with added buoyancy, and an arch bend that could decouple the FPSO dynamic motions and subsequently increase riser performance. Multiphase seafloor pumping is to be used in a later phase of completion to pump oil and gas from the seabed to the FPSO to increase recoverable volumes and production rates, Shell said.

Late Tuesday, joint partners ExxonMobil Corp. and Norway’s Statoil ASA also pulled the trigger on the long-planned Julia field, also in Walker Ridge blocks (see Daily GPI, Jan. 10, 2012). The project is estimated to run more than $4 billion. Julia, discovered in 2007, is about 265 miles southwest of New Orleans, and it holds an estimated 6 billion boe of resources.

Julia initially is projected to produce 34,000 b/d of oil from six wells, with subsea tie-backs to the Jack/St. Malo production facility about 15 miles away. The Jack/St. Malo facility, which is co-owned by Statoil, is operated by Chevron Corp.

“Julia is one of the first large oil discoveries in the ultra-deepwater frontier of the Gulf of Mexico,” said ExxonMobil Development Co. President Neil Duffin. “This resource is located more than 30,000 feet below the ocean’s surface. Enhanced technologies will be deployed to ensure the safe and environmentally responsible development of this important energy resource.” He said Julia would be a contributor “for years to come.”

Project front end engineering design for Julia has been completed and the engineering, procurement and construction contracts have been placed. The field comprises five leases in Walker Ridge blocks 584, 627, 628 540 and 583. Drilling operations are to begin in 2014, with production ramp-up set for 2016. The lifetime of the Julia field is estimated to be up to 40 years.

Statoil’s Jason Nye, U.S. Offshore senior vice president, called Julia “a strong addition to our growing portfolio in the Gulf of Mexico. Julia has a substantial long-term production potential which is expected to be fully realized through the application of technology to unlock its full potential.”

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