Shell Upstream Americas News

Kinder Morgan Inc. will buy out Royal Dutch Shell PLC’s interest in their proposed Elba Liquefaction Co. (ELC ) joint venture in Georgia. Houston-based Kinder Morgan already owns 51% of the ELC joint venture. The firm said it would buy the 49 percent stake that it does not already own in the natural gas joint venture and it raised its dividend. ELC owns the Elba Liquefaction Project, which is proposed to be constructed and operated at the existing Elba Island LNG Terminal near Savannah, Georgia. Kinder Morgan expects to invest an additional $630 million in the joint venture as a result of the transaction, bringing its total investment to $2.1 billion. Construction is expected to begin in the fourth quarter, with initial production to begin in late 2017.

Royal Dutch Shell has given the green light for the development of its largest platform in the Gulf of Mexico after making steep cost cuts which made the deep water project economical despite low oil prices. The decision to pour billions of dollars into the Appomattox project comes as companies have scrapped around $200 billion of mega-projects in the wake of the sharp decline in oil prices over the past year. Shell has operated in the Gulf of Mexico for over 60 years. The region contributes about 17 percent of total U.S. crude oil production according to the Energy Information Administration and was the location in 2010 of the worst offshore oil spill in U.S. history, involving BP's Deepwater Horizon well.

Shell has begun production from the Mars B development through Olympus, the company’s seventh and largest floating deepwater platform in the Gulf of Mexico. It is the first deepwater project in the Gulf to expand an existing oil and gas field with significant new infrastructure, which should extend the life of the greater Mars basin to 2050 or beyond. Combined future production from Olympus and the original Mars platform is expected to deliver an estimated resource base of 1 billion barrels of oil equivalent (boe).

Shell and its partners have begun production from the second development phase of the Parque das Conchas (BC-10) project, located off Brazil’s south-east coast. The BC-10 project (Shell share 50%, Petrobras 35%, ONGC 15%) is comprised of several subsea fields which are tied back to a floating production, storage and offloading (FPSO) vessel, named the Espírito Santo. In 2009 the first phase of the project began production, when the Abalone and Ostra fields were connected, along with the Argonauta B-West reservoir.

Shell, and its partners, are expecting to boost production with two new deepwater projects at Parque das Conchas (BC-10) and the Bijupirá/Salema fields. "Offshore Brazil is a key part of our plans to grow our deepwater portfolio – a key component of our global strategy,” said John Hollowell, Executive Vice President for Deep Water, Shell Upstream Americas. For Parque das Conchas (BC-10), Shell and its partners Petrobras and ONGC, have decided to move forward with Phase 3 of the project, which will include the installation of subsea-infrastructure at the Massa and Argonauta O-South fields. These fields will be tied-back to the Espírito Santo – the floating, production, storage and offloading vessel (FPSO) – that is at the center of the Parque das Conchas development.

Nearly two decades after setting a world water-depth record for drilling and production, Shell’s Auger tension-leg platform is still playing a central and innovative role in the company’s deep water Gulf of Mexico portfolio – currently producing some 55,000 barrels oil equivalent (boe) per day (Shell share ~30,000 boe per day), and acting in the future as the host platform for the Cardamom subsea development. The Cardamom discovery well also set records three years ago, for subsurface length and depth. With the latest seismic and drilling technologies, the Cardamom development is expected to deliver new production from the deep waters of the Gulf of Mexico to existing infrastructure.

Shell announced a multi-billion dollar investment to develop its major Cardamom oil and gas field in the deep waters of the Gulf of Mexico (GoM). The Cardamom project is expected to produce 50,000 barrels of oil equivalent (boe) a day at peak production and more than 140 million boe over its lifetime.“Technological advances in seismic imaging and drilling have allowed us to both discover and access this new field,” said Marvin Odum, Shell Upstream Americas Director. “This is another sizeable deep-water investment by Shell that strengthens energy supplies to the USA. "Our exploration plan for Cardamom (Shell interest 100%) was the first to receive approval since the lifting of the US government moratorium on drilling in the GoM.

Shell announced investment to support phase II of the prolific Parque das Conchas (BC-10) project more than 100 kilometres (62 miles) off the coast of Brazil. This significant investment develops the fourth field in the BC-10 block and continues a successful wave of production growth in Shell’s Upstream Americas business. The full project delivers an energy resource of approximately 300 million barrels of oil equivalent, with production of some 100,000 barrels of oil equivalent per day. “This is another important milestone in our delivery of substantial growth in the Americas," said Marvin Odum, Upstream Americas Director. Shell began production from the first phase of Parque das Conchas in 2009 with production from nine wells in three fields – Abalone, Ostra, and Argonauta B-West.