Shell announced plans for the redevelopment of the Penguins oil and gas field, marking its biggest commitment to the UK North Sea in almost three decades.
Shell announced plans for the redevelopment of the Penguins oil and gas field, marking its biggest commitment to the UK North Sea in almost three decades.
Shell said the development, which includes the construction of a floating production, storage and offloading (FPSO) vessel, reaffirmed the Anglo-Dutch company’s commitment to the region after it sold around half of its assets there last year.
The FPSO will be the first new manned installation for Shell in the northern North Sea in almost 30 years, it said in a statement.
“Penguins demonstrates the importance of Shell’s North Sea assets to the company’s upstream portfolio,” said Andy Brown, Upstream Director. “It is another example of how we are unlocking development opportunities, with lower costs, in support of Shell’s transformation into a world class investment case.”
Shell will be able to produce competitively from the field even if oil price falls below $40 per barrel, it said, without disclosing the project cost. The FPSO is expected to have a peak production of circa 45,000 barrels of oil equivalent per day.
The Shell-operated Penguins redevelopment is the first major project Shell has announced since 2012, when it made a final investment decision for the Fram field in the central North Sea.
The Penguins field currently processes oil and gas using four existing drill centres tied back to the Brent Charlie platform. The redevelopment of the field, required when Brent Charlie ceases production will see an additional eight wells drilled, which will be tied back to the new FPSO vessel. Natural gas will be exported through the tie-in of existing subsea facilities and additional pipeline infrastructure. Oil will be transported via tanker to refineries and gas will be transported via the FLAGS pipeline to the St Fergus gas terminal in north-east Scotland.
“Having reshaped our portfolio over the last twelve months, we now plan to grow our North Sea production through our core production assets,” said Steve Phimister, Shell’s vice president for Upstream in the UK and Ireland.
The Penguins field is in 165 metres (541 feet) of water, approximately 150 miles north east of the Shetland Islands. Discovered in 1974, the field was first developed in 2002 and is a 50-50 joint venture between operator Shell and ExxonMobil.
Source: Pipeline ME
