Shell to buy Turritella FPSO

Jul 11, 2017

Shell is buying the deepest floating production unit in the world, the Turritella floating production storage and offloading (FPSO) unit in a US$1 billion cash deal that will allow the supermajor to assume operatorship of the entire Stones development in the deepwater Gulf of Mexico.

Turritella. Image from Shell.

Shell E&P Offshore Services is exercising its right to buy the FPSO from the SBM Offshore-led joint venture (55%) consisting of Mitsubishi Corp. (30%) and Nippon Yusen Kabushiki Kaisha (NYK Line, 15%).

According to SBM, the purchase allows the Shell affiliate to assume operatorship of the Stones development in its entirety, creating additional efficiencies through integration of subsea to surface operations and allowing leverage of its optimized Gulf of Mexico organization and infrastructure.

The deal is expected to close in early 2018, which provides for a transition window to ensure a safe and controlled handover of operations.

Shell’s Stones is about 320km (200 mi) off Louisiana in the Walker Ridge area at 2896m (9500ft) water depth. Turritella is the deepest FPSO development in the world and has a turret with a disconnectable buoy allowing it to weathervane in normal conditions and disconnect from the FPSO upon the approach of a hurricane.

The Turritella FPSO has been on hire since 2 September 2016 and forms an early phase in Shell's Stones development in the Gulf of Mexico, says SBM. Shell brought Stones online on 6 September.

The supermajor expects production at Stones to reach 50,000 boe/d at peak production.

Development of the Stones field began with two subsea production wells tied back to Turritella. Six further production wells will be added later, as well as a multi-phase system to pump oil and gas from the seabed to the FPSO, increasing recoverable volumes and production rates. All eight wells will be connected to Turritella. The reservoir depth is around 8077m (26,500ft) below sea level, and 5181m (17,000ft) below the mud line, according to Shell.

Shell is 100% owner and operator of Stones. The company said in its own statement that Shell has three additional Gulf of Mexico deepwater projects under construction – Appomattox, Kaikias, and Coulomb Phase 2 – as well as options for additional subsea tiebacks and Vito, a potential, new hub in the region.