Shell-Chevron JV targets deep-water development in the U.S. Gulf of Mexico

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Shell Offshore announced the final investment decision (FID) for Whale, a deep-water development in the U.S. Gulf of Mexico that features a 99 percent replicated hull and an 80 percent replication of the topsides from its Vito project.

Wael Sawan, Shell Upstream Director, said: “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 fund the development of the energy of the future.”

Whale will be the second Shell-operated deep-water development in the Gulf of Mexico to employ a simplified, cost-efficient host design. Shell anticipates an internal rate of return estimated to be greater than 25 percent.

Shell said Whale development will feature energy-efficient gas turbines and compression systems. This development will be the latest addition to its Gulf of Mexico portfolio where the production is among the lowest greenhouse gas (GHG) intensity in the world for producing oil.

The Whale development, owned by Shell Offshore Inc. (60 percent operator) and Chevron U.S.A. Inc. (40 percent), is expected to 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. Whale will be Shell’s 12th deep-water host in the Gulf of Mexico and is currently scheduled to begin production in 2024.