Shell and Chevron Boost Oil and Gas Arsenal in U.S. Gulf of Mexico

Shell Offshore, a subsidiary of the UK-based Shell, and its partner, Chevron, a Texas-headquartered energy giant, have bolstered their oil and gas portfolio in the U.S. Gulf of Mexico with the commencement of production from a deepwater project more than seven years after the initial hydrocarbon discovery.

After a hydrocarbon find in 2017, Shell made a final investment decision in July 2021 for the Whale deepwater development in the Perdido Corridor. The construction of the Whale floating production unit (FPU) was entrusted to Seatrium (formerly Sembcorp Marine), which involved the fabrication and integration of the FPU topsides, living quarters, and hull. The Whale development is jointly owned by Shell Offshore (60%, operator) and Chevron (40%).

The completed FPU Whale, comprising a topside module and a four-column semi-submersible floating hull, was delivered by the Singapore-based company in October 2023. The integration of the FPU topside and hull in a single lift was made possible by the Goliath twin cranes with a combined 30,000-ton lifting capacity and a 100-meter hook height. Boskalis’ Boka Vanguard vessel transported the 25,000-ton FPU Whale to Ingleside, United States.

Both Shell and Chevron have confirmed the commencement of production at the FPU Whale, which replicates the simplified, cost-efficient host design of the Vito platform, inaugurated in early 2023. The Whale project, a part of the energy giants’ Gulf of Mexico assets, boasts a 99% replicated hull and an 80% replication of the topsides from the Vito project.

Environmental Impact and Production Figures

Zoë Yujnovich, Shell’s Integrated Gas and Upstream Director, stated: “Whale demonstrates our focus on driving more value with fewer emissions from our Upstream business as we deliver the energy people need today. It will make a significant contribution to our commitment to bring projects online, with a total peak production of more than 500,000 barrels of oil equivalent per day from 2023 through 2025.”

Whale, hailed as the most efficient of Shell’s oil and gas platforms in the Gulf of Mexico, has been added to the oil major’s producing deepwater assets in the U.S., expected to contribute to delivering the secure energy required in the present day. With an estimated peak production of 100,000 barrels of oil equivalent per day (boe/d), the FPU currently holds an estimated recoverable resource volume of 480 million boe.

Whale features energy-efficient gas turbines and compression systems, operating with approximately 30% lower greenhouse gas (GHG) intensity over its life cycle than Vito in the greater Mars Corridor. This enhances the firm’s Gulf of Mexico portfolio, where oil production’s GHG intensity is among the lowest globally. The project is anticipated to deliver lower emissions, reduced costs, and higher returns.

Project Details and Milestones

Situated in the Alaminos Canyon Block 773, approximately 200 miles southwest of Houston, the Whale field features a semi-submersible production host in over 8,600 feet of water with 15 wells to be tied back to the host via subsea infrastructure. The field is adjacent to the Shell-operated Silvertip field and around 10 miles from the company’s operated Perdido platform.

Bruce Niemeyer, President of Chevron Americas Exploration & Production, highlighted: “Production from Whale brings Chevron another step closer to reaching 300,000 net barrels of oil equivalent per day in the U.S. Gulf of Mexico by 2026. As a leading leaseholder in the Gulf, where we produce some of the lowest carbon intensity oil and natural gas in the world, Chevron is well positioned to continue growing affordable, reliable production in the U.S. while delivering higher returns and cash flow.”

Shell achieved first oil from Whale 7.5 years after discovery by leveraging the engineering and construction techniques used for Vito and its supply chain. This timeline includes a one-year delay to the final investment decision due to the firm’s cash preservation strategy during the Covid-19 pandemic.

Industry Outlook

The first oil production from Whale follows Chevron’s initial production from its high-pressure Anchor asset and water injection operations at two projects to enhance production at the company’s Jack/St. Malo and Tahiti facilities in the Gulf. Other projects in development in the Gulf of Mexico include one operated by LLOG Exploration, which is nearing the first oil production milestone thanks to FPU refurbishment progress.