Royal Dutch Shell division Shell Offshore has initiated deep-water production at the first phase of Kaikias subsea development in the US Gulf of Mexico.
With anticipated peak production of 40,000boed, Kaikias is situated in the prolific Mars-Ursa basin approximately 210km from the Louisiana coast.
Shell operates and owns 80% working interest in the this deep-water project, while the remaining 20% is held by Mitsui Oil Exploration’s wholly owned subsidiary MOEX North America.
The Kaikias development sends production from its four wells to the Ursa hub, which is also operated by Shell and co-owned by BP, Exxon Mobil and ConocoPhillips. The volumes from the hub subsequently flow into the Mars oil pipeline.
Shell noted that since last year it has minimised about 30% of costs at the Kaikias project, leading to lowered forward-looking, break-even prices of less than $30 per barrel of oil.
Royal Dutch Shell Upstream director Andy Brown said: “We believe Kaikias is the most competitive subsea development in the Gulf of Mexico and a prime example of the deep-water opportunities we’re able to advance with our technical expertise and capital discipline.
“In addition to accelerating production for Kaikias, we reduced costs with a simplified well design and the incorporation of existing subsea and processing equipment.”
Shell’s deep-water projects are said to have produced approximately 731,000boed globally in the first quarter of this year. The company decreased an average of 45% global deep-water unit development and operating costs over the last four years.
