Shell and Mitsui Oil Exploration have taken the final investment decision for phase one of the Kaikias deepwater project in the US Gulf of Mexico, in hopes of starting production in 2019.
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Illustration of Kaikias, from Shell. |
Kaikias is a near-field opportunity with a competitive go-forward breakeven price below US$40/bbl, according to Shell. It is expected to produce oil and gas through a subsea tie-back to the nearby Shell-operated Ursa production hub.
Located in the prolific Mars-Ursa basin approximately 210km (130mi) from the Louisiana coast, Kaikias is estimated to contain more than 100 MMboe of recoverable resources.
The project will be developed in two phases, with phase one expected to start production in 2019. The first phase of development includes three wells, which are designed to produce up to 40,000 boe/d at peak rates.
"Kaikias is an example of a competitive and capital efficient deepwater project using infrastructure already in place," said Andy Brown, upstream director of Royal Dutch Shell. "The team has done a great job to reduce the total cost by around 50% by simplifying the design and using lessons learned from previous subsea developments."
Shell first discovered Kaikias in August 2014, with appraisal drilling revealing more than 300ft of net oil pay in August 2015.
Months later in November 2015, Shell announced that the Kaikias discovery could exceed 100 MMboe of recoverable resources.
Late last year, Mitsui acquired its 20% interest in Kaikias, in addition to Circius.
Shell, through subsidiary Shell Offshore, is the operator and has an 80% working interest. Mitsui owns the remaining 20% working interest through its subsidiary MOEX North America.
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