Shell to advance Appomattox GOM project

July 1, 2015

Royal Dutch Shell made the final investment decision (FID) to advance the Appomattox deepwater development in the Norphlet formation in the Gulf of Mexico (GOM).

The project includes the construction and installation of Shell’s eighth and largest floating platform in the GOM. The Appomattox development will initially produce from the Appomattox and Vicksburg fields, with average peak production estimated to reach 175,000 boe/d. The platform and the Appomattox and Vicksburg fields are owned by Shell (79%) and Nexen Petroleum Offshore USA (21%), a wholly-owned subsidiary of CNOOC.

Shell discovered Appomattox in 2010 and Vicksburg in 2013. The Appomattox development host will consist of a semisubmersible, four-column production host platform, a subsea system featuring six drill centers, 15 producing wells, and five water injection wells. The project is 80mi offshore Louisiana in 7200ft of water. Shell’s GOM production averaged about 225,000 boe/d in 2014.

Shell is the only operator in the GOM with commercial deepwater discoveries in the Norphlet. The project will fund the development of the estimated 650 MMboe resources at Appomattox and Vicksburg, with production startup targeted for 2020. The development of Shell’s nearby discoveries at the Gettysburg and Rydberg prospects is under review, but, if deemed to be commercial, could be tied back to the Appomattox platform, which would bring the total estimated discovered to more than 800 MMboe.

In 2014, Shell started production from its nearby Mars B development via the Olympus tension leg platform (TLP). The Olympus was the company's largest TLP at that time, designed with 24 well slots to provide infrastructure to the West Boreus and South Deimos subsea developments. The Olympus extends the life of the Mars field to at least 2050, according to Shell.

During design work for Appomattox, Shell reduced the total project cost by 20% through supply chain savings, design improvements, and by reducing the number of wells required for the development. The design includes advancements from previous four-column hosts, such as the Olympus TLP, as well as ensuring a high degree of design maturity before construction. With these and other cost reductions, the go-forward project breakeven price is estimated to be around $55/bbl Brent equivalent.

Shell Pipeline Co. made its final investment decision to approve the Mattox Pipeline project, which will be a corridor pipeline built to transport crude oil from the Appomattox host to an existing offshore structure in the South Pass area and then connect onshore through an existing pipeline.

Image: Shell Olympus / Shell

Read more:

Appomattox potential grows

Shell hits Norphlet pay

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