Shell’s ultra-deepwater oil and gas project will be located about 200 miles southwest of New Orleans in the Stones field, which is estimated to contain more than 2 billion barrels of oil equivalent. The company says it expects the first phase of its project to have an annual peak production of 50,000 barrels of oil equivalent per day from more than 250 million barrels of oil equivalent of recoverable resources.
Now that the final investment decision has been made, Shell will begin constructing a floating production, storage, and offloading (FPSO) vessel and subsea infrastructure. The development will start with two subsea production wells tied back to the FPSO vessel, followed later by six additional production wells.
Shell says it selected an FPSO design to develop and produce this ultra-deepwater project because of the Stones field’s relative lack of infrastructure, seabed complexity and unique reservoir properties. With an FPSO, tankers will transport oil from the Stones project to US refineries, and gas will be transported by pipeline.
In September last year, Shell halted its Arctic drilling program for 2012 after a containment dome to cap potential spills was damaged. The time needed to repair the dome meant that Shell didn’t have enough time to deep-drill off Alaska in 2012.
On New Year’s Eve, Shell’s drilling rig the Kulluk ran aground in the Gulf of Alaska, while being towed to Seattle for maintenance. In light of these and other issues, the Interior Department is now reviewing the company’s Arctic drilling efforts.
Shell has invested $4.5 billion in offshore leases and equipment and fought at least 50 lawsuits from environmental groups opposing the first Arctic wells in about 20 years, according to the San Francisco Chronicle.